Banks attract $72.8 billion in forex inflows under RBI swap scheme

Authorised dealer banks raised $72.848 billion in foreign currency inflows under the Reserve Bank of India’s special dollar-rupee swap facility by August 21, the central bank said on Saturday.

FCNR(B) deposits accounted for $65.397 billion of the total, while External Commercial Borrowings and Overseas Foreign Currency Borrowings contributed another $7.451 billion.

The RBI introduced the special USD-INR swap facility for FCNR(B) deposits, ECBs and OFCBs on 8 June 2026, to encourage dollar inflows amid pressure on the rupee.

The facility will remain open for FCNR(B) deposits until August 31, while ECB and OFCB inflows will be accepted until 31st December, the RBI said.

The central bank had initially kept the FCNR(B) window open until 30th September but advanced the deadline by a month following what it described as an “encouraging response” to the scheme. Indian banks have since stepped-up efforts to attract such deposits by offering higher interest rates.

An SBI Research report released earlier this week suggested that the RBI may have shortened the window because its dollar-mobilisation target had already been met. Inflows stood at about $57 billion when the report was prepared.

The report estimated that another $25 billion to $30 billion could be mobilised during the remaining days of August, potentially taking the overall collection to nearly $85 billion.

“We don’t believe that the cost of swap could have been a constraining factor,” SBI Research said.

“Our estimates show that the cumulative cost would amount to around 15 per cent of the corpus, or $10.5 billion. While this appears sizeable in absolute terms, it needs to be viewed against the scale of India’s foreign-exchange reserves rather than the FCNR(B) corpus alone,” it added.

Meanwhile, India’s foreign exchange reserves increased by $9.905 billion to $716.90 billion during the week ended 14th August, according to RBI data released on Friday.

This followed a $14.1-billion rise in the previous week, when the reserves reached $707 billion—their highest level in the current financial year. The latest increase was supported by inflows mobilised through the FCNR(B) deposit scheme.

With IANS inputs