The Reserve Bank of India’s (RBI) concessional swap facility has attracted more than $20.7 billion ( ₹2 lakh crore) in foreign exchange inflows till July 17, reflecting strong investor appetite for the central bank’s initiatives which are aimed at strengthening the country’s balance of payments.
In a press release issued on Monday, the RBI said the swap facility, introduced in June to encourage foreign currency inflows, “has seen avid interest and attracted steady forex inflows since June 8, 2026.”
RBI had announced a series of measures including a facility for offering concessional swaps for fresh , OFCB and ECB inflows, on June 5, 2026. This facility was operationalized on June 8, 2026.
Break-up of forex inflows under RBI’s swap facility
According to RBI data, the total forex inflows mobilised under the concessional swap facility stood at $20.718 billion as of July 17. Here’s a breakdown:
- FCNR(B) deposits contributed the largest share at $17.406 billion
- Overseas Foreign Currency Borrowings contributed $1.97 billion
- External Commercial Borrowings brought in $1.342 billion
The RBI said the figures are “based on the data received from Authorised Dealer Banks” and reflect inflows mobilised under the special swap facility till July 17.
The apex bank said the concessional swap facility for FCNR(B) deposits will remain available until September 30, 2026, while the facility for OFCBs and ECBs will continue until December 31, 2026.
The measures were announced by the RBI to support India’s external sector by encouraging overseas foreign currency inflows into the country.
Why is the swap facility significant
The RBI’s concessional swap facility lowers the cost of raising foreign currency funds for banks. Normally, banks that mobilise dollar deposits incur hedging costs when converting those funds for domestic use, which can reduce the interest rates they offer depositors.
Under the scheme, the absorbs much of the currency risk through the swap facility, making it cheaper for banks to raise foreign currency and encouraging larger inflows, particularly through FCNR(B) deposits.
These initiatives including the attractive foreign currency deposits are part of the country’s wider efforts to attract foreign capital and support the rupee. The currency has been trading near record lows despite repeated interventions, with elevated weighing on the country’s balance of payments.
Initial FCNR-B inflows fall short of banks’ expectations
The latest RBI data comes as banks said initial inflows under the special swap facility are falling below expectations. Lenders, however, remain optimistic of a sharp pick-up in foreign currency non-resident (FCNR-B) deposits before the RBI’s September 30 deadline, PTI reported on Monday.
Bank executives told the news agency that they are forging partnerships with foreign entities to help execute the flows, noting that actual activity on the scheme only began at the end of June, after the apex bank published FAQs clarifying all the necessary points.
They have also pointed out some issues, including tax treatments in certain jurisdictions that make such investments infeasible, and noted that tapping non-resident Indians in the Middle East, Singapore, and Hong Kong is best suited to the scheme’s success, the news agency reported.