Indian banks are experiencing unprecedented momentum in overseas fundraising, with $16 billion mobilised between August 13-21 through FCNR-B deposits and other permitted foreign-currency routes, as reported by Jefferies on August 24. This brings total inflows since June 8, 2026 to $73 billion, significantly exceeding earlier projections. The brokerage now expects total mobilisation to reach $90-100 billion by August 31, substantially above its earlier estimate of $70-80 billion. The strong response comes as the RBI's special USD-INR forex swap facility for FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCB) and External Commercial Borrowings (ECB) has mobilised $73 billion as of August 21, 2026, reflecting strong backing from Non-Resident Indians. As per The Economic Times, analysts now expect inflows to reach $90-100 billion by August 31, up from earlier estimates, with the new estimate also higher than the $80 billion that RBI governor Sanjay Malhotra estimated in an interview last week. The finance ministry confirmed that this mobilisation has comfortably surpassed the scale and pace of the RBI's 2013 FCNR(B) swap scheme, which had raised about $26 billion over roughly three months.
Foreign Currency Non Resident (Bank) deposits continue to lead overseas fundraising with $65.4 billion raised under the special forex swap facility, accounting for nearly 90% of total inflows. These term deposits allow non-resident Indians to hold foreign currency with Indian banks rather than rupee-denominated deposits, providing protection from exchange-rate risk while offering banks access to foreign currency funding. The RBI has offered banks and state-run companies a concessional foreign exchange swap facility at a fixed annual rate of 1.5% for an average maturity of at least three years, making these deposits particularly attractive for NRIs. Non-Resident Indians are particularly drawn to these deposits due to the 6.00 to 7.50 per cent returns offered on 3-5 year duration deposits, with the latest data showing $65.397 billion parked in just 75 days from June 8, 2026 to August 21, 2026. However, experts note that the scheme is largely a stabilisation and liquidity-enhancement measure rather than a catalyst for rupee appreciation or a boost for foreign exchange reserves.
The latest data reveals accelerating momentum in foreign currency mobilisation, with banks mobilising $13.097 billion in the eight days ending August 21st against $15.575 billion in the preceding 13 days (between August 1 to August 13, 2026). The pace of mobilisation has increased almost every week, with inflows rising from $40.8 billion on July 31 to $56.9 billion on August 13 and $72.8 billion on August 21. Banks therefore added $32 billion in the three weeks to August 21, taking cumulative inflows to nearly 1.8 times the July-end level. FCNR(B) deposits rose from $36.7 billion on July 31 to $52.3 billion on August 13 and $65.4 billion on August 21, with the latest weekly increase of $13.1 billion following an increase of $15.6 billion in the preceding week. HSBC, SBI, ICICI Bank and HDFC Bank have emerged as the top mobilisers, with other large private-sector lenders also stepping up efforts to tap their NRI networks.
According to Jefferies analysis, of the $72.8 billion raised as of August 21, FCNR-B deposits accounted for $65.4 billion, while overseas foreign currency borrowings (OFCBs) contributed $4.9 billion and external commercial borrowings (ECBs) another $2.6 billion. The brokerage estimates that the potential $90-100 billion inflow would amount to around 13-15 per cent of India's foreign exchange reserves. It would also be equivalent to 3.3-3.6 per cent of bank deposits and 3.9-4.4 per cent of bank credit, highlighting the scale of the mobilisation. Notably, the finance ministry stated that the scheme has mobilised foreign exchange inflows of $73 billion as of August 21, 2026, with the mobilisation appearing to be largely genuine fresh money - data up to July 31 showed gross FCNR-B mobilisation of $37 billion, against a $28 billion increase in FCNR-B deposit balances, meaning about 76 per cent of the gross mobilisation represented a net increase in deposits. The ministry emphasised that by securing large-scale, long-term non-resident deposits and commercial institutional funding entirely on tap, the government has fortified its external buffers with maximum cost-efficiency.
The large foreign-currency mobilisation has helped improve liquidity conditions in the banking system, with Jefferies reporting system liquidity was in surplus by around ₹3.5 lakh crore as of August 20. The improved liquidity is expected to benefit non-banking financial companies (NBFCs) and small private-sector banks. Some large private banks have raised FCNR-B deposit rates by 15-25 basis points, particularly for larger deposits, amid higher US yields and increased borrowing costs. Foreign banks have emerged as significant beneficiaries, with their share of FCNR-B deposits increasing to 15 per cent as of July 30, from just 2 per cent on June 5. Among individual banks, HSBC recorded the largest incremental mobilisation at $6.14 billion between June 5 and July 30, followed by SBI with $4.12 billion and ICICI Bank adding $3.70 billion. However, the impact on the rupee has been limited, with the Indian currency broadly trading in the ₹95 to ₹96 per dollar range and showing no signs of a sharp rise. As per Yes Bank chief economist Indranil Pan, the rupee impact has been marginal because oil prices remain high, with Brent crude trading at around $93 per barrel.
