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With just six days left for the FCNR(B) window closure, banks are rushing to mobilise funds in the final stretch.
Japanese financial services group Nomura estimates that FCNR(B) inflows may reach close to $80 billion as it had already touched inflows of $65.40 billion in less than 11 weeks since the launch.
FCNR(B) deposits are foreign currency-denominated deposits held by non-resident Indians with banks in India.
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Banks raised $13.1 billion through FCNR(B) deposits in just one week. According to Nomura, the pace was significantly faster than the previous fortnight. Between July 31 and August 13, banks had mobilised $15.6 billion.
Nomura said the acceleration reflects banks’ rush to mobilise deposits before the August 31 cutoff, after the RBI unexpectedly announced the early closure of the FCNR(B) swap window on August 14.
Total forex inflows as of Aug 21$72.8 bnFCNR(B) inflows$65.4 bnExpected FCNR(B) total~$80 bnPotential total forex mobilisation$90-100 bnFCNR(B) deadlineAugust 31, 2026ECB/OFCB facilities open untilDecember 31, 2026
RBI forex inflows to touch $80 billion
According to government data, the Reserve Bank of India’s (RBI) special USD-INR forex swap facility has already mobilised $73 billion in foreign exchange inflows as of August 21 and Nomura expects inflows to reach close to $80 billion when it closes.
“This stands out as the largest and fastest foreign-currency mobilisation exercises undertaken by India, comfortably surpassing the scale and pace of the RBI’s 2013 FCNR(B) swap scheme, which had raised about $ 26 billion over roughly three months,” a release by the Ministry of Finance noted.
Total forex mobilisation may touch $100 billion
The overall mobilisation could be even higher, according to Nomura, when other facilities are included. The brokerage firm expects total forex inflows through the swap facilities to potentially reach $90-100 billion.
This estimate includes External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs), which remain open until December 31.
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Nomura said the strong inflow momentum means total mobilisation is unlikely to fall short of earlier optimistic estimates, despite the early closure of the FCNR(B) window.
FCNR(B) scheme impact
The strong response to the scheme provides a significant boost to India’s external-sector resilience. With FCNR(B) deposits accounting for most of the inflows, the mobilisation also highlights the continued confidence of NRIs in India’s financial system. The scale of the inflows, achieved well ahead of the original deadline, has allowed the RBI to meet its objective sooner than expected.
“The response has been strong enough for the RBI to advance the closure of the FCNR(B) window itself, from September 30 to August 31, having already achieved its objective ahead of schedule,” the Ministry of Finance said.
TOPICSNomuraRBIReserve Bank of IndiaThis article was first uploaded on August twenty-five, twenty twenty-six, at thirty-six minutes past four in the afternoon. © IE Online Media Services (P) Ltd