RBI FCNR(B) scheme: $85 billion total collection likely, dollar target met, SBI report says
Synopsis
India's FCNR(B) dollar mobilisation drive has quietly hit its target — $57 billion already in, another $25–30 billion expected before August ends, and a projected $85 billion total. SBI Research's analysis suggests the RBI's surprise early closure wasn't about swap costs — it was simply mission accomplished, with a $50 billion BoP surplus now on the horizon.
Key Takeaways
SBI Research projects total FCNR(B) collections at around $85 billion , with inflows already at $57 billion as of 17 August 2026 .
An additional $25–30 billion is expected to flow in during the remaining days of August 2026 .
The RBI closed the scheme one month early, ahead of the scheduled 30 September 2026 deadline.
India's balance of payments is projected to post a surplus of around $50 billion , with CAD at 1 per cent of GDP .
Cumulative swap cost is estimated at $10.5 billion — just 1.45 per cent of current $700 billion reserves, which SBI Research calls 'minimal'.
SBI Research recommends the RBI use this opportunity to increase gold holdings for greater reserve diversification.
India's dollar mobilisation target under the Reserve Bank of India's (RBI) FCNR(B) deposit scheme has already been achieved, with inflows reaching $57 billion — and total collections are projected to touch $85 billion as an additional $25–30 billion could flow in during the remaining days of August 2026, according to an SBI Research report released on Monday, 17 August. The findings offer the most credible explanation yet for why the RBI chose to shut the scheme a full month ahead of its scheduled 30 September 2026 closure.
Why the Scheme Was Closed Early
The early closure caught market participants off guard, particularly because the RBI Governor had explicitly stated — in a recent media interaction — that there was no intention to wind down the scheme ahead of schedule. According to the SBI Research report, the most probable driver is straightforward: the mobilisation target has been met. With inflows already at $57 billion and the remaining August window capable of delivering another $25–30 billion, the rationale for keeping the window open appears to have lapsed.
Swap Costs: Sizeable in Absolute Terms, Minimal in Context
The report also addressed speculation that the cost of currency swaps may have prompted the early exit. SBI Research pushed back on that theory, estimating that the cumulative swap cost over five years would amount to roughly 15 per cent of the corpus — or approximately $10.5 billion. While that figure appears large in isolation, the report argued it must be weighed against India's total foreign-exchange reserves, which currently stand at around $700 billion. Against that base, the hedging cost works out to just 1.45 per cent of current reserves and approximately 1.27 per cent of projected reserve stock — 'minimal' by the report's assessment. 'We don't believe that the cost of swap could have been a constraining factor,' the report stated.
Balance of Payments and Rupee Impact
On the broader macroeconomic picture, the report projected that India's balance of payments (BoP) would record a surplus of around $50 billion, with the Current Account Deficit (CAD) contained at 1 per cent of GDP. Notably, the report observed that the rupee's reaction to the FCNR(B) announcement had been 'surprisingly minimal' — a signal that markets had either anticipated the move or assessed the underlying fundamentals as sound.
SBI's Recommendation: Diversify into Gold
SBI Research used the occasion to advocate a strategic shift in how RBI manages its reserve portfolio. The report recommended that the central bank use this opportunity to increase its gold holdings as a means of bringing greater resilience and diversification to India's foreign-exchange reserves. This comes amid a broader global trend of central banks accumulating gold to reduce dollar concentration risk.
What Comes Next
With the FCNR(B) scheme now effectively closed, attention will shift to how the RBI deploys the mobilised dollar inflows and whether the projected $85 billion total materialises by month-end. The BoP surplus projection of $50 billion — if realised — would provide significant cushion for the rupee and India's external sector heading into the second half of the fiscal year.
Point of View
And the report confirms it. What the episode reveals is that the RBI is comfortable moving faster than its own forward guidance when operationally convenient — a pattern that, over time, can erode the predictability that markets price in. The gold diversification nudge is the more strategically interesting subplot: if acted upon, it would mark a meaningful shift in how India manages reserve concentration risk.
NationPress
17 Aug 2026
Frequently Asked Questions
Why did the RBI close the FCNR(B) scheme one month early?
According to an SBI Research report, the most likely reason is that the dollar mobilisation target has already been met, with inflows reaching $57 billion and a further $25–30 billion expected before August ends. The early closure came as a surprise because the RBI Governor had recently indicated no such plan was in place.
What is the projected total collection under the FCNR(B) scheme?
SBI Research projects total FCNR(B) collections at around $85 billion — $57 billion already received as of 17 August 2026, with an additional $25–30 billion anticipated in the remaining days of August.
Were swap costs a reason for the early closure of the FCNR(B) scheme?
SBI Research does not believe swap costs were a constraining factor. The estimated five-year cumulative hedging cost of $10.5 billion amounts to just 1.45 per cent of India's current $700 billion foreign-exchange reserves, which the report describes as minimal.
What is the outlook for India's balance of payments after the FCNR(B) scheme?
SBI Research projects India's balance of payments will record a surplus of around $50 billion, with the Current Account Deficit contained at 1 per cent of GDP — a comfortable external position for the near term.
What has SBI Research recommended for India's foreign-exchange reserves?
SBI Research has recommended that the RBI use this opportunity to increase its gold holdings, arguing that greater gold exposure would bring more portfolio resilience and reduce concentration risk in India's foreign-exchange reserve base.
