India has mobilised $65.397 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits as overseas Indians and banks respond to a special Reserve Bank of India (RBI) scheme aimed at drawing foreign currency into the country, according to the latest central bank data released on Saturday.
The figure, recorded as of August 21, accounts for the overwhelming majority of the $72.85 billion raised through three foreign-currency channels covered by the RBI's special USD-INR swap facility. With the FCNR(B) window set to close on August 31, the latest numbers show a strong mobilisation of dollar deposits ahead of the deadline.
The RBI said authorised dealer banks had reported $65.397 billion in FCNR(B) inflows as of August 21.
Overseas foreign currency borrowings (OFCBs) contributed another $4.86 billion, while external commercial borrowings (ECBs) accounted for $2.591 billion.
Together, the three channels brought total foreign currency mobilisation under the facility to $72.85 billion.
FCNR(B) deposits therefore accounted for nearly 90 per cent of the total inflows, making them by far the largest contributor to the RBI's foreign currency mobilisation programme.
The scale of the inflows is particularly significant given that the FCNR(B) component has only a short period remaining before its August 31 deadline.
The RBI introduced the special USD-INR forex swap facility in June to encourage foreign currency inflows through FCNR(B) deposits, ECBs and OFCBs.
The facility was designed to improve the availability of foreign exchange within India's financial system at a time when the rupee was under pressure.
Under the arrangement, the FCNR(B) window will remain open until August 31, while the facilities covering ECBs and OFCBs will continue until December 31.
The latest RBI figures offer the clearest picture yet of how banks and overseas depositors have responded to the scheme.
RBI Governor Sanjay Malhotra said earlier this week that he expects the central bank's recent measures to attract at least $80 billion in foreign currency inflows.
His comments came shortly after the RBI brought forward the closure of the FCNR swap window by one month to August 31.
Malhotra defended the decision, describing it as a data-driven “calibration” rather than a reversal of policy.
The announcement may have appeared sudden, but the time given is sufficient for banks to make necessary arrangements, he said, adding there was a “diminishing marginal utility” of every dollar swapped.