RBI Raises FCNR(B) Deposit Inflows to $133 Billion by August End

The Reserve Bank of India (RBI) has increased the recorded inflows under its special Foreign Currency Non-Resident (Bank) or FCNR(B) deposit scheme to a total of $133 billion as of August 31, 2026. This figure marks an upward revision from earlier data and comes after the RBI advanced the scheme's closing date by one month in light of the strong response from the Indian overseas community.

Initial provisional data released on September 2 had shown mobilizations of $127.226 billion through FCNR(B) deposits by banks. However, the updated numbers reflect a further influx of foreign currency deposits, signaling continued trust and enthusiasm among Non-Resident Indians (NRIs) for this investment avenue.

The FCNR(B) deposit scheme allows NRIs to hold foreign currency deposits in Indian banks, offering protection against exchange rate risks. The scheme is particularly attractive as it enables deposits in major currencies such as the US dollar, British pound, euro, yen, and others, with the principal and interest payable in foreign currency.

This initiative by the RBI is part of a broader strategy to augment foreign exchange reserves and deepen the forex market. The revised deadline for the FCNR(B) deposit mobilization was set to August 31, 2026, after the RBI noticed a robust uptake since the program's inception. By closing the window early, the central bank aimed to manage inflows effectively while supporting the rupee's stability.

Launched on June 8, 2026, the special USD-INR forex swap facility accompanied the FCNR(B) scheme. This facility also caters to Overseas Foreign Currency Borrowings (OFCB) and External Commercial Borrowings (ECBs). The swap arrangement provides Indian banks with foreign currency liquidity by exchanging dollars for rupees with the RBI, thereby facilitating smoother management of foreign currency liabilities.

India's foreign currency deposit market plays a significant role in the country's external financing. The FCNR(B) deposits are one of several instruments through which the diaspora can invest in India without exposing themselves to currency depreciation risks. The RBI’s revised data highlights the confidence of the Indian diaspora in the country’s economic fundamentals and in the central bank’s measures to maintain forex stability.

In recent years, India has seen a steady increase in remittances and foreign currency deposits, underscoring the importance of NRIs in the economy. These inflows contribute to the country's external sector strength, providing the government and RBI with more options to manage exchange rates and external debt obligations.

As India continues to integrate with the global economy, such schemes serve as crucial tools for attracting foreign currency deposits while offering attractive terms and protections to investors outside the country. The FCNR(B) deposit scheme, backed by the RBI's policy initiatives, remains a key channel for tapping into the Indian diaspora's substantial financial resources.

Looking forward, the RBI may consider future iterations or extensions of these schemes depending on the evolving economic environment and forex market conditions. For now, the upward revision to $133 billion in FCNR(B) collections reflects a successful engagement with Non-Resident Indians willing to invest in India through stable, foreign currency-linked deposits.