RBI ends FCNR(B) swap facility early after $40.8 billion forex inflow
Synopsis
The RBI is shutting its FCNR(B) swap window ahead of schedule after pulling in $40.8 billion in forex inflows — and analysts say total mobilisation could hit $80–85 billion by September. It is a rare instance of the central bank ending a major liquidity scheme early because demand exceeded expectations.
Key Takeaways
The RBI announced on 14 August 2026 that its concessional FCNR(B) swap facility will close early, accepting only deposits mobilised by 31 August 2026 .
Swaps under the facility can be availed with the RBI until 11 September 2026 .
Total forex inflows under the scheme reached $40.816 billion as of 31 July 2026 , led by FCNR(B) deposits at $36.725 billion .
India's forex reserves crossed $707 billion during the week ended 7 August 2026 , rising by $14.136 billion .
Overall inflows could reach $80–85 billion by the scheme's original close date of 30 September 2026 , according to reports.
The Reserve Bank of India (RBI) on 14 August 2026 announced it would prematurely close its concessional swap facility for Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, citing an encouraging response and substantial forex inflows since the scheme's launch. The facility will now be available exclusively for deposits mobilised on or before 31 August 2026.
Key Developments
In an official statement, the central bank said: 'Based on the encouraging response to the Swap Facility for FCNR(B) deposits and the resultant forex inflows, it has been decided that the Swap facility for FCNR(B) deposits will be available only for deposits mobilized till August 31, 2026. The Swaps under this facility i.e. FCNR(B) deposits may be availed with RBI till September 11, 2026.'
The original scheme was set to run through 30 September 2026, making this a notable early closure driven by faster-than-anticipated uptake.
Inflows by the Numbers
Total inflows under the facility stood at $40.816 billion as of 31 July 2026, according to data received from authorised dealer banks. FCNR(B) deposits contributed the lion's share at $36.725 billion. Overseas Foreign Currency Borrowings (OFCBs) accounted for $2.575 billion, while External Commercial Borrowings (ECBs) brought in a further $1.516 billion.
The swap facility has attracted steady forex inflows since its launch on 8 June 2026, according to the RBI.
What Analysts Expect Next
According to recent reports, India could receive FCNR(B) deposits in the range of $65–70 billion by the scheme's close on 30 September 2026, with overall inflows potentially reaching $80–85 billion. This would represent one of the largest single-scheme forex mobilisation drives in recent memory.
Impact on Forex Reserves
India's foreign exchange reserves rose sharply by $14.136 billion during the week ended 7 August 2026, crossing the $707 billion mark. The increase was led by foreign currency assets (FCAs), which climbed $9.946 billion to $574.625 billion — the largest component of India's total forex reserves.
With the swap window now set to close ahead of schedule, the RBI's move signals confidence in the quantum of inflows already secured, and attention will now shift to how these reserves are deployed to stabilise the rupee and manage external account pressures in the months ahead.
Point of View
But also a calibration exercise — the central bank is managing the quantum of future liabilities even as it books the headline win of $40-plus billion in inflows. The more important number to watch is not what came in, but the maturity profile of these deposits: a concentrated redemption cycle two to three years from now could reverse a significant portion of the reserve build-up. India has navigated FCNR(B) redemption pressure before — most notably in 2016 — and the RBI will need a clear rollover strategy well before that window opens.
NationPress
14 Aug 2026
Frequently Asked Questions
Why did the RBI end the FCNR(B) swap facility early?
The RBI closed the facility ahead of its original 30 September 2026 deadline because it had already attracted an 'encouraging' $40.816 billion in forex inflows since the scheme launched on 8 June 2026. The central bank cited strong uptake as the basis for the early closure.
What is the new deadline for the FCNR(B) swap facility?
FCNR(B) deposits must be mobilised on or before 31 August 2026 to be eligible under the swap facility. Banks can avail the actual swaps with the RBI until 11 September 2026.
How much did India's forex reserves rise due to this scheme?
India's foreign exchange reserves rose by $14.136 billion in the week ended 7 August 2026, crossing the $707 billion mark. Foreign currency assets led the increase, climbing $9.946 billion to $574.625 billion.
What are the expected total inflows under the RBI swap scheme?
According to recent reports, India could receive FCNR(B) deposits worth $65–70 billion by 30 September 2026, with overall inflows across all instruments potentially reaching $80–85 billion.
What is an FCNR(B) deposit and how does the swap facility work?
Foreign Currency Non-Resident (Bank) deposits are term deposits held in India by non-resident Indians in foreign currencies. The RBI's concessional swap facility allowed banks to convert these foreign currency deposits into rupees at a fixed rate, reducing the hedging cost for banks and encouraging higher inflows from the diaspora.
