Foreign Currency Non-Resident (Bank), or FCNR(B), deposits mobilised under the Reserve Bank of India’s concessional swap facility have reportedly crossed the levels achieved during the 2013 scheme in just 45 days, according to SBI Research. The strong response has prompted the research agency to significantly revise its inflow projections.
SBI Research now estimates that FCNR(B) deposits could reach between $65 billion and $70 billion by the end of the scheme, compared with its earlier forecast of $40 billion to $45 billion. When combined with Overseas Foreign Currency Bonds (OFCBs) and External Commercial Borrowings (ECBs), total inflows are expected to touch $80 billion to $85 billion.
Reserve Bank of India Governor Sanjay Malhotra said the central bank’s recent initiatives to attract overseas capital have enabled banks to mobilise nearly $32 billion, primarily through FCNR(B) deposits. He also noted that foreign investors have invested more than $7 billion in government securities since the measures were introduced in June.
According to RBI data, concessional swap facilities had mobilised $20.72 billion by July 17. This included $17.41 billion through FCNR(B) deposits, while OFCBs and ECBs contributed $1.97 billion and $1.34 billion, respectively.
SBI Research further estimates that FCNR(B) deposits alone had risen to $26 billion to $28 billion by July 23, surpassing the level recorded under the 2013 scheme. The robust inflows are expected to strengthen India’s balance of payments and support overall currency stability amid uncertain global economic conditions.
