The Reserve Bank of India's concessional swap facility could attract $80-85 billion in foreign currency inflows, led by strong Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, according to an SBI research report released on Monday.
Inflows Breakdown and Progress
The SBI Ecowrap report noted that the RBI's swap scheme has already brought in nearly $20 billion in inflows by July 17, 2026, providing a "positive reprieve" for India's external sector. Of this total, FCNR(B) deposits accounted for $17.406 billion, while Overseas Foreign Currency Borrowings (OFCBs) contributed $1.97 billion and External Commercial Borrowings (ECBs) stood at $1.342 billion. Public sector banks have emerged as the key contributors to mobilising FCNR(B) deposits under the scheme.
| Deposit Type | Amount Inflows till July 17 (USD billion) |
|---|---|
| FCNR(B) Deposits | 17.406 |
| Overseas Foreign Currency Borrowings (OFCBs) | 1.97 |
| External Commercial Borrowings (ECBs) | 1.342 |
The report expects the bulk of the inflows to come through FCNR(B) deposits. It stated: "Overall, we believe FCNR(B) deposits in the range of USD 65-70 billion should be received overall in scheme, and including OFCB and ECB at USD 80-USD 85 billion."
Mechanism and Timeline
The RBI announced the concessional swap facility on June 5, 2026, as part of a series of measures to strengthen India's balance of payments and encourage foreign currency inflows. The scheme became operational on June 8, 2026. The facility will remain open until September 30, 2026 for FCNR(B) deposits, while OFCBs and ECBs will be eligible until December 31, 2026.
Rupee and Market Reaction
The SBI report said the rupee initially strengthened after the RBI's announcement, but the gains proved short-lived. It attributed the reversal to fading hopes of a diplomatic resolution between the US and Iran, volatile energy prices, and cautious foreign portfolio investors (FPIs), despite steady debt inflows and improving equity flows during June.
Balance of Payments Outlook
The report estimates that the RBI's measures could add $75-85 billion to India's capital account in FY27, while inward remittances are expected to exceed $150 billion. It also projects foreign direct investment (FDI) inflows of $15-18 billion during FY27, along with stronger foreign institutional investor (FII) inflows in the second half of the financial year. The report further expects India's current account deficit to remain contained at 1-1.2% of GDP in FY27.
"Thus, the overall balance of payment would be in surplus of more than USD 50 billion for FY27. This is way above our previous estimate of USD 65-70 billion deficit," the report said. This turnaround implies a significant strengthening of India's external finances, directly benefiting trade finance conditions and reducing the cost of hedging currency exposure forimporters and exporters.
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