Mumbai: The Reserve Bank of India's (RBI) concessional dollar swap facility has crossed $40 billion in total forex mobilisation, more than doubling in a fortnight to $40.8 billion as of July 31, according to the central bank as reported by Business Today.
Record fund mobilisation
Authorised dealer banks had mobilised $40.8 billion as of July 31, comprising $36.7 billion through Foreign Currency Non-Resident (Bank) deposits, $2.6 billion through overseas foreign currency borrowings (OFCBs) and $1.5 billion through external commercial borrowings (ECBs), RBI said.
The latest total compares with $17.4 billion raised in the first 42 days after the scheme was operationalised on June 8 — meaning total mobilisation more than doubled in about a fortnight. FCNR(B) deposits have already exceeded the roughly $26 billion mobilised under the 2013 special window, in just over seven weeks, making it one of the fastest foreign currency deposit drives by Indian banks, according to Business Today.
Scheme mechanics
RBI described the subsidised dollar swap facility as a way for banks to swap fresh FCNR(B), OFCB and ECB inflows at a preferential rate.
The facility encourages overseas fund mobilisation and boosts foreign exchange reserves.
| Component | Mobilisation as of July 31 ($ bn) |
|---|---|
| FCNR(B) deposits | 36.7 |
| Overseas foreign currency borrowings (OFCBs) | 2.6 |
| External commercial borrowings (ECBs) | 1.5 |
| Total | 40.8 |
Despite headwinds
The inflows have come despite elevated US Treasury yields, which have reduced the relative appeal of FCNR(B) deposits, and tax-related issues that have weighed on NRI investments, the report noted. The surge nevertheless surpassed the 2013 special-window performance, which had set a high-water mark for one-off dollar deposit mobilisation.
Business and treasury implications
For CFOs and treasury directors, the practical significance lies in the concessional pricing: banks can swap fresh FCNR(B), OFCB and ECB inflows at a preferential rate, which lowers the cost of offshore funding and supports forex reserve accumulation, RBI stated. The defined deadlines — September 30, 2026 for FCNR(B) deposits and December 31, 2026 for OFCBs and ECBs — set the planning horizon for any corporate looking to raise foreign currency funds through these instruments, RBI said.
The fact that mobilisation has already surpassed the 2013 special window, despite elevated US Treasury yields and tax-related headwinds for NRI investors, signals strong offshore demand for the window. This remains a live policy tool for managing dollar liquidity and reserve buffers, according to the report.
According to the RBI breakdown, FCNR(B) deposits account for the bulk at $36.7 billion, while OFCBs and ECBs together add $4.1 billion to the total. For companies with foreign currency borrowing needs, the ECB and OFCB windows are part of the facility, with the concession running until end-2026 for those instruments.
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