Bankers now expect India to draw $80-85 billion of foreign capital through the RBI's swap-backed push spanning FCNR(B) deposits, external commercial borrowings and overseas foreign currency bonds issued by banks, according to The Times of India. The early momentum is set to come from FCNR(B) deposits, which bankers said are already seeing traction among non-resident Indians, while public sector undertakings and banks are adopting a wait-and-watch approach on ECB and OFCB issuances given their longer windows. The FCNR(B) facility closes on September 30, whereas ECB and OFCB schemes remain open until December 31, with bankers indicating that borrowing activity may gather pace in the October-December quarter. Large inflows can provide crucial support to the rupee, which has been under pressure amid global turmoil.
Non-Resident Indians (NRIs) have the potential to bring USD 70-80 billion in foreign currency inflows into India through the ongoing FCNR initiative, according to a Singapore-based chartered accountant. As much as USD 10 billion has been raised so far under the FCNR initiative, which is open till September 30, 2026, as reported by The Hindu BusinessLine. The estimate was discussed during a global webinar organised by the Singapore Chapter of the Institute of Chartered Accountants of India (ICAI) in association with the ICAI's International Affairs Committee and its 25 overseas chapters on Wednesday. The webinar, held on July 15, drew nearly 1,800 participants, including chartered accountants, NRIs, accredited investors, business leaders, family offices and finance professionals from across the world. ICAI Singapore Chapter Chairman Sanjay Gattani said that considering the investment capacity of participants and the leverage available through FCNR deposits, the webinar alone had the potential to facilitate investment commitments of over USD 2 billion.
The rupee has weakened to 96.35 per dollar on Thursday, nine paise weaker from its previous close of 96.26, as consistent dollar demand continued to pressure the currency. The currency traded at an intraday low of 96.38 per dollar, a level at which further weakness was contained by RBI intervention, according to The Economic Times. After gaining 0.36 per cent in June on the back of RBI measures, including the special FCNR(B) deposit window, the currency came under pressure in July following international crude oil price spikes after the resumption of hostilities between the United States and Iran. The rupee underperformed most Asian currencies, which gained between 0.1 per cent and 0.4 per cent during the day, with the rupee remaining among the weakest performers. As per Business Standard, Dilip Parmar, senior research analyst at HDFC Securities, said the rupee lost ground as the RBI's recent support measures faded, compounded by tepid interest in FCNR schemes following a rise in global bond yields.
Finance Minister Nirmala Sitharaman on Monday reviewed the progress of the Reserve Bank of India's (RBI) foreign currency swap initiatives with the managing directors and chief executive officers of public sector banks. According to the finance ministry, Sitharaman made these remarks during the meeting, urging lenders to intensify outreach to non-resident Indians (NRIs) and introduce innovative foreign currency deposit products to attract higher foreign exchange inflows. The initiative aims to strengthen India's external sector through enhanced overseas deposit mobilisation. The direction came after Sitharaman reviewed the progress of the RBI's foreign currency mobilisation schemes, which have witnessed an encouraging initial response from the Indian diaspora. The schemes, announced by RBI Governor Sanjay Malhotra in the Monetary Policy Statement of June 5, 2026, comprise a US dollar-rupee forex swap facility at par with fresh FCNR(B) deposits and a concessional swap facility for eligible ECBs and OFCBs. These schemes are aimed at attracting foreign capital, strengthening the balance of payments and incentivising capital inflows. The government, along with the RBI, announced these measures as part of the strategy to bolster forex reserves and support the rupee amid the West Asia crisis.
FCNR inflows have reached only about $5-6 billion to date, according to a Barclays FX Insights India Report, compared with market expectations ranging from $40 billion to $70 billion. The report estimates that FCNR inflows have fallen well short of market expectations, with Barclays noting that the boost to sentiment emanating from the recent RBI measures appears to be fading, though it's still too early to suggest the measures will not be successful. Madan Sabnavis, chief economist at Bank of Baroda, said the pace of take-up so far has indeed been lower than the run rate that would be expected by the lofty market expectations of around $40-50 billion. Gaura Sen Gupta, chief economist at IDFC First Bank, said lenders were still finalising term sheets and arranging dollar funding for leveraged structures, which had delayed the pace of mobilisation. However, the latest expert estimates suggest the potential for significantly higher inflows of $70-80 billion, representing a substantial upward revision from previous projections.
During the meeting, a senior RBI official assured that the central bank is actively supporting banks and financial institutions in mobilising deposits and facilitating eligible borrowings. The RBI Deputy Governor highlighted that a daily reporting framework is enabling real-time monitoring of the schemes' progress, ensuring transparent oversight across participating institutions. Officials said the RBI is supporting mobilisation through a real-time monitoring framework, while the finance minister urged banks to intensify engagement with NRIs and sustain the momentum. The schemes are eligible until September 30, 2026, for FCNR(B) deposits, while ECBs and OFCBs are eligible until December 31, 2026. Despite weaker-than-expected FCNR inflows, Barclays remains optimistic that RBI measures will help improve India's balance of payments position, though the report warns that renewed geopolitical tensions in the Middle East, rising crude oil prices and strong importer demand for dollars are likely to keep the rupee under pressure, with the bank continuing to expect gradual depreciation in the currency. The Foreign Currency Non-Resident (FCNR) scheme allows NRIs and Persons of Indian Origin (PIOs) to safely deposit and grow their overseas earnings in major foreign currencies within Indian banks, with banks offering higher interest rates for a limited period as part of the strategy to bolster forex reserves.
