Strong demand for FCNR(B) deposits provides vital support for the balance of payments as central bank interventions shield the rupee against surging crude oil prices.
MUMBAI — The Reserve Bank of India (RBI) confirmed that its special concessional swap facility, introduced to incentivize capital inflows and strengthen the external balance sheet, attracted $20.718 billion (~₹1.73 lakh crore) in foreign exchange between June 8 and July 17.
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The facility, which was operationalized on June 8, has seen active participation from Authorised Dealer Banks, primarily driven by non-resident Indian (NRI) deposit accounts. The capital influx comes at a crucial moment as the central bank steps up interventions in offshore and spot markets to defend the rupee from crude oil-driven pressures.
1. Composition of Mobilized Foreign Capital
According to official data released by the central bank, Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits constituted over 84% of total collections under the swap scheme.
💵 Breakdown of Total Forex Inflows ($20.718 Billion):
🏦 FCNR(B) Deposits ➔ $17.406 Billion (84.0%)
🌐 Overseas Foreign Currency Borr. ➔ $1.970 Billion (9.5%)
🏭 External Commercial Borrowings ➔ $1.342 Billion (6.5%)
Why the Concessional Swap Works
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Under standard conditions, commercial banks converting dollar deposits to domestic currency incur hedging costs that can reduce the interest rates offered to non-resident depositors. By offering concessional swap rates, the RBI absorbs a significant portion of the currency risk, allowing lenders to market highly competitive yields on FCNR(B) accounts.
2. Rupee Defense & Global Commodity Pressures
Despite strong foreign currency mobilization, the Indian rupee continues to face external pressures:
| Market Metric | Current Level / Impact | Underlying Driver |
| Rupee Exchange Rate | 96.23–96.36 per USD | Hovering near record lows touched in late May. |
| Crude Oil (Brent) | Surged past $90/barrel | Up >20% over two weeks amid geopolitical tension. |
| RBI Market Action | Dollar sales across onshore & offshore NDFs | Targeted intervention to mitigate extreme volatility. |
Swap Facility Availability Timeline
Key deadlines for financial institutions participating in the RBI swap window:
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Bottom Line: The $20.72 billion mobilized in the first six weeks provides the central bank with significant firepower to absorb external shocks and smooth out foreign exchange volatility without exhausting core reserves.
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