India Eyes $85 Billion Forex Windfall via FCNR Scheme
SBI Research projects up to $85 billion in foreign exchange inflows under the RBI's concessional swap facility, surpassing 2013's mobilisation pace
Synopsis
India's Foreign Currency Non-Resident deposit scheme could attract overall inflows of $80-85 billion, of which the FCNR(B) deposits alone would account for $65-70 billion, according to an SBI Research report. The mobilisation drive is already surpassing the previous one in 2013, with the main impetus from the public sector banks, after 45 days.
AdvertisementThe Numbers
Foreign Currency Non-Resident (Bank) deposits in India could reach USD 65-70 billion by the end of the scheme, and USD 80-85 billion overall, by the end of the scheme, the SBI Research report said, adding that the total amount mobilised so far in 45 days has surpassed the total mobilised in 2013 over a three-month period.
Who Is Driving It
The report said the banks in the public sector were the key enablers of such mobilisation as seen from data released by the Reserve Bank of India (RBI) indicating that the FCNR(B) deposits worth USD 17.41 billion have been mobilised till July 17, 2026, while total deposits amounting to USD 20.72 billion have been received, with USD 1.97 billion as Overseas Foreign Currency Borrowings and USD 1.34 billion as External Commercial Borrowings.
AdvertisementWhy the estimate was raised?
The total FCNR forecast has been raised to USD 65-70 billion from the previous USD 40-45 billion, with a large proportion of the current FCNR deposits likely to be renewed under the new scheme due to the interest rates.
The facility was put in place on 8th June 2026 and is extended till 30th September 2026 for FCNR(B) deposits and till 31st December 2026 for overseas/external commercial borrowings.
A Cautious Note
The report also pointed out that the rupee reacted positively to the RBI policy action, but that confidence wilted as prospects of a US-Iran deal became dimmer, energy prices remained choppy and foreign portfolio investors became cautious.
Despite this, current fiscal year will see the capital account receiving an additional $75-85 billion, and inflow of remittances is likely to exceed $150 billion, says the report.
AdvertisementWhy It Matters
The scheme is one of the pillars of the RBI's effort to provide support to the rupee and augment the foreign exchange reserves amid the global uncertainty, similar to the FCNR swap window it had launched in 2013 to support the rupee after the taper-tantrum episode that year.
The quick and bigger mobilisation this time reflects more confidence in the Indian banking rates by the NRIs, but analysts warn that external pressures such as Gulf tensions to fluctuations in oil prices could prove to be a test of how resilient these inflows will turn out to be.
