1 week ago
Banks Rush Overseas as RBI Forex Swap Window Nears Closure
The Reserve Bank of India created a special program to help banks bring dollars into India.
Banks could borrow dollars overseas and exchange them for rupees at a cheaper rate.
Later, they could exchange the rupees back into dollars.
The RBI also agreed to pay the cost of protecting against currency changes.
This made raising money overseas less expensive for banks.
Banks raised almost $73 billion in just 11 weeks.
The FCNR (B) part of the program became so popular that it will close early on August 31.
Banks are now trying to use other overseas borrowing routes before the remaining deadline.
The RBI launched a concessional foreign-exchange swap facility on June 8, 2026.
Nearly $73 billion was raised in 11 weeks through FCNR (B) deposits, OFCBs and ECBs.
FCNR (B) deposits accounted for about $65.4 billion, compared with $4.9 billion through OFCBs and $2.59 billion through ECBs.
The FCNR (B) window will close early on August 31 instead of September 30.
Banks are using overseas funds to support foreign operations, lend to importers and ease pressure from slower domestic deposit growth.
- Who
- The Reserve Bank of India and banks raising funds through FCNR (B) deposits, overseas foreign currency borrowings and external commercial borrowings.
- What
- Banks are rapidly raising overseas dollars to use the RBI’s special foreign-exchange swap facility.
- Where
- Funds are being raised in overseas markets and swapped with the RBI for rupees.
- When
- The facility was announced on June 8, 2026; the FCNR (B) window closes August 31, while the OFCB and ECB windows remain open until December 31, 2026.
- Why
- The facility lowers overseas funding and hedging costs, supports foreign operations and importers, and helps banks address strong credit demand while domestic deposit growth lags.
Key facts
- Total funds raised
- Nearly $73 billion in 11 weeks
- FCNR (B) deposits
- About $65.4 billion raised as of August 22
- Overseas foreign currency borrowings
- About $4.9 billion raised
- External commercial borrowings
- About $2.59 billion raised
- FCNR (B) closing date
- August 31, 2026, moved forward from September 30
- Other window closing date
- The OFCB and ECB windows remain open until December 31, 2026
- Previous comparable mobilization
- A similar 2013 window raised $26 billion









