India’s special RBI swap facility for FCNR(B) deposits has attracted more than $100 billion by its revised August 31 deadline, according to a Financial Times report, a figure the regulator itself hasn’t yet confirmed. What makes the story worth watching isn’t just the scale of inflows, but why RBI chose to shut the window a month early when the money was still pouring in.
Key Takeaways
- FCNR(B)-linked inflows reportedly crossed $100 billion by August 31; per Financial Times, RBI’s own last confirmed snapshot, dated August 21, put the total at $72.85 billion.
- RBI closed the window for fresh FCNR(B) mobilisation a month ahead of its original September 30 schedule, even as inflows kept accelerating.
- Banks can still swap already-contracted FCNR(B) deposits with RBI until September 11; the FCNR(B) deposit product itself hasn’t disappeared, only the special swap facility for new mobilisation has closed.
- ICICI Bank’s exchange filing shows it alone mobilised $17.88 billion via FCNR(B) and raised $3.55 billion in dollar bonds during July-August.
- Governor Sanjay Malhotra called the early closure “well-thought-out, calibrated, prudent, and data-driven,” pointing to diminishing returns on each extra dollar swapped versus rising sterilisation costs.
- ECB and OFCB windows remain open until December 31, 2026, raising the question of whether banks now shift their dollar-raising efforts there.
The Number That Surprised Everyone
RBI’s own data, current only through August 21, showed $72.85 billion mobilised across FCNR(B), ECBs, and OFCBs combined, with FCNR(B) deposits alone at $65.4 billion.
By the time the window closed on August 31, Financial Times reported the total had crossed $100 billion. That’s a jump the regulator hasn’t formally verified yet: it’s a media-reported final tally, not an RBI release.
The Expectation Gap
Ordinarily, a scheme pulling in dollars faster than projected would be a reason to keep it open longer, not close it. RBI had originally scheduled the FCNR(B) window to run until September 30.
Instead, as the pace of inflows accelerated well past its $80-billion estimate, RBI moved the deadline up by a full month. Strong demand, in this case, became the reason for an early exit rather than an extension, and that’s the part of the story worth sitting with.
Also Read: India Forex Reserves Rise $7.26 Billion to $674.19 Bn on FCA, Gold
How the Numbers Built Up
The jump from $65.4 billion on August 21 to more than $100 billion by August 31 points to exceptionally strong mobilisation in the final days of the window.
Bank-level filings help explain some of that acceleration: ICICI Bank alone reported mobilising $17.88 billion through FCNR(B) deposits, alongside a separate $3.55 billion in dollar-bond issuance across July and August.
What Is Actually Closing—and What Isn’t
It’s worth being precise here: FCNR(B) as a deposit product hasn’t gone away, NRIs can still hold FCNR(B) accounts as before.
What closed on August 31 is the special RBI swap facility that let banks offload fresh FCNR(B) dollar inflows to the central bank at a subsidised rate. Banks can still settle swaps on deposits contracted before that date, with RBI keeping that window open until September 11.
Why RBI Decided Enough Was Enough
Speaking to the Financial Times, Malhotra described the decision as “well-thought-out, calibrated, prudent and data-driven.”
His underlying logic: the benefit of swapping each additional dollar declines over time, while the cost of sterilising that liquidity rises the longer RBI has to hold it. Once inflows crossed a certain threshold, the economics of keeping the window open stopped favouring RBI.
Track daily FII-DII flow data on NiftyTrader →>https://www.niftytrader.in/fii-dii-data
The Forward-Looking Question: Where Does the Money Go Next?
With FCNR(B) mobilisation closed but ECB and OFCB windows open until December 31, 2026, the real question shifts to whether banks and state-run companies now lean harder into those two routes to keep dollar funding coming in.
That, in turn, tests whether RBI is actually open to another wave of inflows, or whether the early FCNR(B) closure signals it wants to slow the pace of dollar absorption altogether.
What This Means for India’s Balance of Payments
Per the FT report, the scale of these inflows is expected to meaningfully support India’s balance of payments this financial year, with the capital account surplus estimated to exceed $65 billion, a reversal from deficits in the prior two years.
This comes even as India’s forex reserves fell by roughly $8 billion in the April-June quarter. Both figures are FT-reported estimates, not RBI-confirmed data points.
Bottom Line
The headline figure, inflows crossing $100 billion against an $80 billion estimate, is the least interesting part of this story.
The more telling detail is that RBI’s own success with the scheme is what pushed it to close early: more dollars started costing more to manage than they were worth absorbing.
Whether that logic extends to the ECB and OFCB windows before their December 31 deadline is the next thing worth tracking.
Read Next: NSE IPO: Why These Two Stocks Are Moving Before the Deal
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Figures attributed to RBI are drawn from official data releases; figures attributed to media reports (including the $100-billion total, capital account surplus estimate, and forex reserve figures) have not been independently confirmed by the regulator as of publication. Readers should consult a registered financial advisor before making investment decisions.
