FCNR(B) deposit inflows reach $36.725 billion between June 8 and July 31: RBI

Robust inflows are driven by appealing interest rates ranging from 6% to 7.5% and leverage options of 9 to 19 times extended to NRIs | Photo Credit:
iStockphoto

Financial institutions are aggressively pursuing funds through Foreign Currency Non‑Resident (Bank) deposits. From June 8 through July 31, they attracted $36.725 billion under the RBI’s temporary scheme that covers the entire hedging expense.

Key Takeaways

• FCNR(B) deposit inflows reached $36.725 billion between June 8 and July 31, 2026, per RBI data.
• Banks offered leverage of 9-19 times and interest rates of 6-7.5% to attract NRI depositors.
• RBI introduced two initiatives: a full hedging-cost absorption scheme and a concessional forex swap for 3-5 year deposits.
• The measures aim to draw foreign capital and stabilise the rupee.

These strong inflows reflect the banks’ provision of leverage ranging from 9‑to‑19 times and interest rates around 6‑7.5 % to NRIs.

RBI Initiatives Spur Foreign Capital Inflows

In its latest monetary‑policy review, the RBI introduced two initiatives to draw foreign capital and steady the rupee: (1) a scheme that absorbs the full hedging cost for banks raising new 3‑ to 5‑year FCNR (B) deposits, and (2) a concessional foreign‑exchange swap facility to encourage PSU‑linked external commercial borrowings. Both programmes remain open until 30 September 2026.

Since June 8, India’s total foreign‑exchange inflows have reached $40.816 billion, comprising $36.725 billion from FCNR (B) deposits, $2.575 billion from overseas foreign‑currency borrowings, and $1.516 billion from external commercial borrowings.

Governor Optimistic About Inflows; Banker Anticipates Further Gains

Speaking to BusinessLine last Sunday, RBI Governor Sanjay Malhotra remarked: “If this momentum continues, total inflows will remain strong. The external sector, including the current account and FDI, is holding up fairly well despite rising crude‑oil prices.”

He added that anchoring expectations to real economic fundamentals is crucial, and he is confident that the structural and capital‑flow measures introduced by the government and the RBI will bolster market confidence moving forward.

V Rama Chandra Reddy, Treasury Head at Karur Vysya Bank, noted: “Should the present FCNR(B) inflow trend persist, we could mobilise over three‑digit USD billion, far surpassing the earlier projection of $50–60 billion. The momentum to date has been unexpectedly strong.”

Published on August 1, 2026