The Reserve Bank of India (RBI) has announced that its special concessional forex swap facility has attracted more than $40 billion in foreign currency inflows by the end of July 2026, reflecting a strong response from banks and overseas investors.
According to the central bank, total inflows under the scheme reached $40.82 billion as of July 31, 2026, with Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits accounting for the largest share.
FCNR(B) Deposits Drive Majority of Forex Inflows
Data submitted by authorised dealer banks showed that FCNR(B) deposits contributed $36.73 billion, making them the biggest source of inflows under the RBI’s swap programme.
The remaining inflows came through other foreign borrowing channels:
- Overseas Foreign Currency Borrowings (OFCBs): $2.58 billion
- External Commercial Borrowings (ECBs): $1.52 billion
The figures underline the growing participation of banks in the RBI’s initiative to strengthen India’s foreign exchange reserves and improve liquidity.
What Is the RBI’s Forex Swap Facility?
The RBI introduced the concessional forex swap facility on June 5, 2026, and made it operational from June 8 as part of a broader strategy to encourage foreign currency inflows and reinforce the country’s external sector.
The scheme allows banks to mobilise fresh FCNR(B) deposits and raise funds through overseas borrowings while accessing concessional swap arrangements with the central bank.
To make the facility more attractive, the RBI also agreed to bear the hedging cost, reducing the financial burden on participating banks.
Swap Window Remains Open Until Year-End
The central bank has set different deadlines for the various components of the scheme.
- The FCNR(B) deposit swap facility will remain available until September 30, 2026.
- The swap facility for Overseas Foreign Currency Borrowings (OFCBs) and External Commercial Borrowings (ECBs) will continue until December 31, 2026.
These timelines are intended to provide banks with sufficient flexibility to raise overseas funds under the concessional framework.
Part of RBI’s Broader Liquidity Strategy
The forex swap facility was unveiled as part of a wider package of measures announced after the RBI’s June 2026 monetary policy review.
The initiative aims to attract stable foreign currency inflows, enhance liquidity in the foreign exchange market, and strengthen India’s external financial position amid evolving global economic conditions.
With more than $40.8 billion already mobilised in less than two months, the scheme has emerged as a key tool in supporting the country’s forex liquidity while boosting confidence in India’s external sector.