RBI's forex swap facility draws massive $127 billion through FCNR(B) deposits

Foreign exchange inflows through the Reserve Bank of India’s special USD-INR swap facility stood at $136.38 billion as of August 31. FCNR(B) deposits accounted for most of the inflows.

According to data released by the RBI on Wednesday, banks mobilised $127.23 billion through FCNR(B) deposits under the facility.

Inflows through Overseas Foreign Currency Borrowings (OFCBs) stood at $5.26 billion, while External Commercial Borrowings (ECBs) accounted for $3.89 billion.

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The RBI had introduced the special USD-INR forex swap facility on June 8, covering FCNR(B) deposits, ECBs, and OFCBs. The facility was aimed at boosting foreign exchange inflows into the country.

FCNR(B) deposits are foreign-currency deposits maintained by NRIs with Indian banks, while external commercial borrowings (ECBs) are loans raised by Indian companies and other eligible entities from overseas lenders.

Overseas foreign currency bonds (OFCBs) are bonds issued by Indian entities in foreign currency to raise funds from international investors.

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The FCNR(B) component of the scheme was available for deposits mobilised until August 31, while the facility for ECBs and OFCBs will remain open until December 31.

The latest figures are provisional and subject to final reporting, accounting, and reconciliation, the RBI said.