Reserve Bank of India pulls in $127B from diaspora in record foreign currency drive

The Reserve Bank of India’s special concessional foreign currency swap facility, launched in early June 2026 to attract deposits from overseas Indians, has mobilized $127.23 billion in Foreign Currency Non-Resident (Bank) deposits, known as FCNR(B). The initial expectation was somewhere in the range of $50B to $60B. How the swap facility worked The RBI rolled out the program between June 5 and June 8, offering to absorb the complete hedging costs for 3- to 5-year FCNR(B) deposits mobilized through authorized banks. The window was originally set to close on August 31, 2026, but the response was strong enough that the central bank wrapped things up ahead of schedule. By covering hedging costs, the RBI essentially removed the currency risk that typically eats into returns on foreign currency deposits held in Indian banks. That freed up banks to offer tax-free interest rates in the range of 6% to 7.5%, and in some cases even higher. For high-net-worth clients, some banks reportedly offered leverage capabilities reaching up to 9x against these deposits. The deposits flowed in from NRIs based in the US, UK, Singapore, Hong Kong, and West Asia. Public sector banks reported robust particip...