Indian government recruits overseas Indians to bolster rupee stability

When your currency is under pressure and oil prices are surging, you call in reinforcements. India’s reinforcements just happen to be scattered across 150-plus countries. The Reserve Bank of India launched a targeted campaign in June 2026 to attract foreign-currency deposits from the Indian diaspora, estimated at 35 to 37 million people worldwide. The centerpiece: a temporary facility that effectively eliminates hedging costs on Foreign Currency Non-Resident (Bank) deposits, known as FCNR(B) accounts. By early September 2026, the effort had pulled in a record $127 billion in these deposits, far exceeding initial expectations and providing a critical buffer for India’s foreign exchange reserves. How the scheme works FCNR(B) deposits allow non-resident Indians to park foreign currency in Indian banks without taking on exchange rate risk. The money stays denominated in dollars, euros, or other major currencies, and the depositor earns interest in that same currency. The RBI’s new facility, launched on June 5, 2026, removed what had long been the biggest friction point: hedging costs. When Indian banks accept dollar deposits, they typically need to hedge their own currency exposure, an...