0 months ago
RBI Rules Out Premature End to FCNR (B) Incentive Scheme
The Reserve Bank of India is the country's main bank, and it helps look after India's money.
Some people from India live and work in other countries; they are called non-resident Indians.
The RBI started a special savings plan called FCNR (B), which lets those people save money in banks in India in foreign currency.
Banks were allowed to offer higher interest on these deposits to attract more money from overseas.
This plan brought in a lot of money, about $36.7 billion so far.
That extra money helps keep the value of India's rupee steady compared to the US dollar.
The head of the RBI, Sanjay Malhotra, said the bank is not planning to end this special plan early.
Because of all this money, India's foreign exchange reserves are expected to grow past $700 billion very soon.
The special rules will keep running until September 30, 2026.
RBI Governor Sanjay Malhotra said there is no proposal to prematurely close the FCNR (B) deposit incentive scheme.
Indian banks mobilised $36.7 billion through FCNR (B) deposits as of July 31, 2026, helping steady the rupee amid rising global oil prices.
India's foreign exchange reserves are expected to cross the $700 billion milestone in the coming weeks.
The RBI's zero-cost swap facility and relaxed interest rate rules remain in force through September 30, 2026.
State Bank of India and ICICI Bank together captured over half of all FCNR (B) special dollar-mobilisation inflows.
- Who
- RBI Governor Sanjay Malhotra, with major banks including State Bank of India and ICICI Bank
- What
- Confirmed there is no proposal to prematurely end the FCNR (B) deposit incentive scheme, which has mobilised $36.7 billion in deposits and supported the rupee
- Where
- Mumbai
- When
- Wednesday, announced at a press conference following that day's monetary policy review; deposit figures as of July 31, 2026
- Why
- To continue attracting overseas funds, steady the rupee amid rising global oil prices, and bolster India's foreign exchange reserves
Key facts
- RBI Governor
- Sanjay Malhotra
- FCNR (B) deposits mobilised
- $36.7 billion (as of July 31, 2026)
- Forex reserves outlook
- Expected to cross $700 billion
- Zero-cost swap facility deadline
- September 30, 2026
- Relaxed interest rate rules valid until
- September 30, 2026
- Interest ceiling removed
- Fresh FCNR (B) deposits with maturities over 3 years up to 5 years
- NRE interest restriction removed
- Fresh NRE deposits of 3 years and above
- Banks with over half of inflows
- State Bank of India and ICICI Bank
Quotes
Sanjay Malhotra
Governor of the Reserve Bank of India
“"Even before these measures came in, we had a very strong and comfortable external position. This further fortifies our external position."”
thehansindia.com
“"We only intervene in case there is an excessive volatility or there are speculative pressures that are getting built in."”
thehansindia.com
Sources
Related news
RBI Rules Out Early End to Forex Swap Schemes
FCNR(B) Inflows Cross $100 Billion as RBI Closes Window
India Draws Record $127 Billion Through Special FCNR Window
RBI shortens FCNR(B) swap scheme as inflows hit $56.8 billion
India’s Foreign Currency Facility Draws $72.85 Billion
RBI Governor Defends Early Closure of FCNR(B) Swap Window
BRICS Leaders Eye Local-Currency Trade, Not Common Currency
Rupee Slips Against Dollar Amid Oil and Tension
Rupee Climbs to Two-Month High on RBI Intervention
Rupee Falls to 95.56 as Crude Prices and Dollar Rise
Rupee Gains as Oil Prices Fall, RBI Supports Currency