New Delhi: The Reserve Bank of India (RBI) on Friday said the swap facility for FCNR(B) deposits will be available only for deposits mobilised up to 31 August 2026, with banks allowed to execute the swaps with the central bank until 11 September 2026. The facility, launched to attract foreign currency deposits, has already brought in $56.85 billion, or roughly ₹5.42 lakh crore, into the economy as of 13 August 2026, the RBI reported.
What the change is and why it matters
The RBI said the FCNR(B) swap scheme received a “very good response” and produced a significant inflow of foreign currency, prompting an early closure of the swap window for new deposits. The swap arrangement allowed banks to convert eligible FCNR(B) deposits into rupee liquidity via the central bank, supporting domestic funding and liquidity conditions.
“The swap facility for FCNR(B) deposits has received a very good response and has led to a significant inflow of foreign currency into the country. Therefore, this facility will now be available only for FCNR(B) deposits mobilised up to August 31, 2026. Banks will be able to avail of the swap facility from the RBI for these deposits until September 11, 2026. However, the swap facility for ECB (External Commercial Borrowings) and OFCB (Overseas Foreign Currency Borrowings) will continue as before until December 31, 2026.”
The RBI’s move affects three main stakeholders:
- Banks, which must ensure swaps are executed for eligible FCNR(B) deposits mobilised by the end‑August cut-off and complete their transactions by 11 September.
- Non-resident Indians and overseas depositors, whose ability to participate in the swap via new FCNR(B) deposits will be curtailed after 31 August.
- Markets and policymakers, where the earlier-than-expected inflow of foreign currency may influence currency reserves, liquidity and interest-rate considerations.
Numbers at a glance
| Item | Detail |
|---|---|
| FCNR(B) deposits eligible for swap | Mobilised up to 31 August 2026 |
| Final date to execute swaps with RBI | 11 September 2026 |
| Inflow under facility (as of 13 Aug 2026) | $56.85 billion (~₹5.42 lakh crore) |
| ECB and OFCB swap facility | Continues as before until 31 December 2026 |
By specifying separate treatment for FCNR(B) deposits and continuing the swap facility for External Commercial Borrowings (ECB) and Overseas Foreign Currency Borrowings (OFCB) until 31 December 2026, the RBI appears to be managing the pace and composition of foreign-currency inflows.
Implications for markets and users
For banks, the shorter window places operational emphasis on identifying eligible deposits mobilised by the cut-off and completing swap transactions within the nine‑day execution period. The early closure may also influence banks' foreign currency hedging and treasury strategies.
For non-resident depositors, the announcement narrows the period during which fresh FCNR(B) deposits can be placed and swapped through the RBI window. Those considering dollar‑denominated deposits with a view to participating in the swap will need to act before the end‑August deadline.
From a macro perspective, the inflow of $56.85 billion into the country under the scheme to date strengthens foreign exchange reserves and provides additional external liquidity. That can ease near-term pressures on the rupee and reduce the need for other forms of external financing, but it also requires calibrated management to avoid sudden reversals when swap windows close.
The RBI’s statement underlines that the decision follows the scheme’s “very good response” and significant inflow of foreign currency. It did not, however, specify plans for any new or replacement instruments beyond the continued swap facility for ECB and OFCB until year‑end.
What it means for you: if you are a bank treasurer, non-resident depositor or corporate treasurer, assess whether eligible FCNR(B) deposits have been mobilised ahead of 31 August and ensure swap execution by 11 September 2026. Corporates and investors should also monitor any follow-up guidance from the RBI on liquidity management and foreign-exchange operations.
Further operational details and clarifications can be expected in RBI circulars and communications to banks as the deadlines approach.
