Indian banks have mobilised $36.73 billion through Foreign Currency Non-Resident (Bank) or FCNR(B) deposits under the Reserve Bank of India's concessional swap facility as of July 31. This amount represents nearly 90% of the total $40.82 billion foreign currency raised through the program, according to bfsi.economictimes.indiatimes.com.
The concessional swap facility was introduced by the RBI to encourage banks to raise foreign currency deposits from non-resident Indians. Under this program, banks can convert FCNR(B) deposits into Indian rupees at a concessional swap rate, providing a cost-effective way to mobilise foreign currency funds. The facility has been active for several months, with banks actively participating to secure these deposits.
This mobilization is significant for India's external liquidity and foreign exchange reserves, helping to stabilize the rupee and support economic growth. Comparable initiatives in the past have also aimed to attract foreign currency deposits to shore up reserves. The current $36.7 billion raised under this scheme underscores the demand and trust in the RBI's measures amid global currency volatility.
The RBI's concessional swap facility remains open, with the total foreign currency mobilization standing at $40.82 billion as of July 31. The next official update on the program's progress is expected in the RBI's upcoming monetary policy review scheduled for early August.