Reserve Bank of India attracts nearly $10B in deposit drive, creating a potential buffer for rupee stability

India’s central bank just pulled off a financial maneuver that would make most central bankers jealous. The Reserve Bank of India’s foreign currency deposit drive has attracted nearly $10 billion in inflows, a significant chunk of what analysts expect could become a $30 to $40 billion flood of capital into the country.

How the RBI’s dollar vacuum works

On June 5, 2026, the RBI announced its Foreign Currency Non-Resident (Banks) swap facility, known in banker shorthand as FCNR(B). Indian banks can now collect foreign currency deposits from non-resident Indians, swap those deposits for rupees with the RBI, and the central bank picks up the tab on hedging costs.

The RBI also exempted these deposits from certain statutory liquidity requirements. Banks responded by cranking FCNR(B) rates to record levels above 7%, making these deposits significantly more attractive than comparable options in Gulf states and other regions where large NRI populations reside.

By early July 2026, banks had already booked nearly $5 billion in deposits under the new facility. Combined with broader deposit activity connected to the initiative, the total has approached the $10 billion mark.

The 2013 playbook, upgraded

Back in 2013, the central bank deployed a strikingly similar strategy that successfully mobilized between $27 billion and $34 billion in foreign currency deposits, helping stabilize the currency and rebuild reserves.

Analysts project that FCNR-specific inflows alone could reach $10 to $20 billion, with total inflows from all related measures potentially hitting the $30 to $40 billion range over the coming months.

Following the June 5 announcement, the rupee strengthened by 0.6% to 95.24 against the dollar. The RBI also included extensions for export proceeds realization, giving exporters more time to bring dollars home, as part of a coordinated effort to shore up India’s external position against elevated oil prices and persistent capital outflows.

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