Indian companies are projected to raise $75-80 billion through external commercial borrowings (ECB) in FY27, driven by a Reserve Bank of India (RBI) scheme designed to boost dollar inflows, according to Citibank's managing director and head of corporate banking for South Asia, Neeraj Kumar. The projection represents an upward revision from the bank's earlier estimate of up to $65 billion in FY27, from $50 billion in FY26. As reported by Mint, the projection was revised upward over the past two months after the RBI introduced measures in June allowing banks and public-sector companies to raise foreign-currency funds under a special window.
The central bank's special forex swap facility has already garnered a total of $72.85 billion, led primarily by $65 billion in FCNR(B) deposits, $4.86 billion in OFCBs and $2.59 billion in ECBs, according to the latest RBI data. According to Kumar, the RBI also set up a swap window for foreign currency non-resident bank—or FCNR(B)—deposits, allowing banks to gather dollar deposits at a lower effective cost. This swap window reduced dollar hedging costs for banks, allowing them to offer higher yield spreads to non-resident Indians while keeping their net funding costs manageable.
Banks have accelerated their fundraising plans following the RBI's decision to move up the pre-closure deadline for the FCNR(B) scheme by a month. While the separate window for ECBs and OFCBs remains open until 31 December, fresh FCNR(B) deposits under the swap window are now permitted only through 31 August instead of the original 30 September deadline. As reported by Citi, Indian banks have already raised over $4 billion through bond issuances and a comparable amount through loans, with expectations of $5-6 billion of additional bond and loan issuances through the rest of the year.
Beyond funding markets, Kumar said Citi is seeing a healthy pipeline of corporate activity, particularly in mergers and acquisitions, as stronger balance sheets improve companies' capacity to pursue acquisitions. He noted that corporate and financial-sector balance sheets are at their healthiest levels in the past 10-15 years, giving companies greater capacity to invest in new projects and pursue strategic acquisitions. According to Kumar, companies are now investing across semiconductors, data centers, renewable energy, electronics manufacturing, electric vehicles, metals and mining, infrastructure, and power sectors, with capital expenditure becoming significantly more broad-based than 18 months ago.
Since the announcement of the pre-closure, several major banks including HDFC Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank and IDFC FIRST Bank have accessed the international bond market, with Citi noting that more than $4 billion has been raised through these transactions. Kumar expects Indian banks and public-sector units to raise nearly $10 billion each through loans and bonds in FY27, with two or three more lenders likely to tap international markets soon. Citi's institutional asset book has crossed ₹1 trillion, with the bank's India asset book growing by ₹24,000 crore over the past 12 months.
