India's banking system has attracted $136.38 billion in foreign currency inflows through the Reserve Bank of India (RBI)'s special dollar-rupee swap facility, with FCNR(B) deposits accounting for the dominant share of mobilisation, according to provisional RBI data released on Wednesday, 2 September 2025. The scale of the response has far exceeded expectations and significantly reinforced India's external financial buffers.

Breakdown of Inflows

Of the total $136.38 billion mobilised by 31 August, foreign currency non-resident — FCNR(B) — deposits contributed the largest share at $127.23 billion. Overseas foreign currency borrowings (OFCBs) added $5.26 billion, while external commercial borrowings (ECBs) brought in $3.89 billion. The RBI has noted that all figures remain provisional and are subject to final reporting, accounting, and reconciliation.

Pace of Mobilisation Surged in August

The inflow trajectory accelerated sharply through the month. As of 21 August, banks had mobilised $65.4 billion through FCNR(B) deposits alone, with combined inflows across all three routes standing at approximately $73 billion. The subsequent surge in the final ten days of August effectively doubled the total, pushing it to $136.38 billion by month-end. The sharp uptick in longer-tenure FCNR(B) deposits signals that banks moved aggressively to tap overseas dollar funding, aided by the RBI's swap mechanism, which reduced the cost and risk of managing foreign currency exposure.

Window Closed Early; Swap Access Continues

Given the exceptionally strong response, the RBI advanced the closure of the FCNR(B) deposit mobilisation window to 31 August, pulling it forward from the original deadline of 30 September. However, the swap facility for eligible FCNR(B) deposits already mobilised will remain accessible until 11 September. The schemes for ECBs and OFCBs will continue to accept applications until 31 December 2026, giving banks and eligible borrowers additional time to access the facility through those routes.

Impact on Domestic Liquidity

The large-scale foreign currency mobilisation has had a measurable effect on domestic banking-system liquidity. System liquidity rose to ₹6.65 lakh crore on 31 August, the highest level recorded since May 2022. Concurrently, the weighted average call rate declined to 4.98%, moving well below the prevailing repo rate — a signal of easing monetary conditions in the short-term interbank market.

Dwarfs the 2013 FCNR(B) Exercise

The current mobilisation has comprehensively outpaced the RBI's earlier FCNR(B) swap scheme launched in 2013, during which banks raised approximately $26 billion. The latest exercise is more than five times that scale, underscoring the heightened appetite among non-resident depositors and overseas lenders for India-linked instruments under a structured swap arrangement. This comes amid broader efforts by the Centre to shore up the rupee and manage the current account, and reflects the improved credibility of India's external sector management since the 2013 taper tantrum episode. With ECB and OFCB windows open through December, total inflows could edge higher in the months ahead.