Archive · 21 Sep 2026
RBI Draws $133 Billion Through Special FCNR(B) Deposit Window
The Reserve Bank of India created a special program to bring more U.S. dollars into Indian banks.
People and companies placed nearly $133 billion into special foreign-currency bank deposits.
Other borrowing programs brought total inflows to about $143.5 billion.
The program was designed to attract dollars and help support the Indian rupee.
The deposits last for three to five years.
The RBI paid the cost of protecting the deposits from currency changes, allowing banks to offer attractive interest rates.
S&P Global Ratings said this could give banks more stable funding.
However, it also said banks’ balance sheets could grow substantially if customers borrow against these deposits.
The Reserve Bank of India mobilised $132.98 billion through its special FCNR(B) deposit window.
Including external commercial borrowings and overseas foreign-currency borrowings, total inflows reached $143.5 billion.
The RBI launched the USD-INR forex swap facility on June 8, 2026, to attract dollars and support the rupee.
FCNR(B) deposits accounted for nearly 4.5% of India’s banking-system deposits as of March 31, 2026.
S&P Global Ratings said the deposits could strengthen bank funding but potentially expand balance sheets by $190-$220 billion through leveraged lending.
- Who
- The Reserve Bank of India, Indian banks, depositors and borrowers; S&P Global Ratings assessed the scheme.
- What
- A special foreign-currency deposit and borrowing program mobilised $143.5 billion in total inflows, including $132.98 billion through FCNR(B) deposits.
- When
- The forex swap facility was announced on June 8, 2026; the FCNR(B) window closed on August 31, 2026, while the other windows remain open until December 31, 2026.
- Where
- India’s banking system, through foreign-currency deposits and borrowings.
- Why
- The RBI sought to attract dollar flows and support the falling rupee while improving banks’ funding stability.
Funding Benefits
Balance-Sheet Risks
Impact on banks
Funding Benefits
The Reserve Bank of India and S&P Global Ratings presented the deposits as a source of more stable funding that could help bridge asset-liability duration gaps.
Balance-Sheet Risks
S&P Global Ratings said banks’ balance sheets could expand by about $190-$220 billion if customers borrow against pledged FCNR(B) deposits.
Effect of RBI support
Funding Benefits
The RBI absorbed the hedging cost on three- to five-year FCNR(B) deposits, enabling banks to offer attractive interest rates and draw in dollar funds.
Balance-Sheet Risks
The scheme could encourage increased lending against the deposits, while low-spread loans and related offshore borrowings remain on bank balance sheets.
- FCNR(B) inflows
- $132.98 billion
- Total reported inflows
- $143.5 billion
- External commercial borrowings
- $5.2 billion
- Overseas foreign-currency borrowings
- $5.32 billion
- Deposit maturities
- Three to five years
- Share of banking deposits
- Nearly 4.5% as of March 31, 2026
- Projected balance-sheet increase
- Approximately $190-$220 billion if 50%-75% of deposits are leveraged