The Reserve Bank of India (RBI) has introduced a special US Dollar-Rupee swap facility for fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, aiming to attract foreign currency inflows and strengthen external sector resilience.
The Reserve Bank of India has announced a new swap facility for banks mobilising fresh FCNR(B) deposits, allowing them to swap eligible foreign currency deposits with the central bank through a dedicated US Dollar-Rupee arrangement.
The facility, announced on June 8, follows RBI Governor Sanjay Malhotra’s statement on June 5 and is available for fresh FCNR(B) deposits mobilised for a minimum tenure of three years and a maximum of five years. The scheme will remain open until October 16, 2026, for deposits raised up to September 30, 2026.
Under the framework, Authorised Dealer Category-I banks can avail the facility for deposits mobilised in any freely convertible currency. However, transactions with the RBI will be conducted only in US dollars. Deposits collected in other eligible foreign currencies may be converted into equivalent US dollar amounts before availing the swap facility.
The RBI said the tenor of the swap will match the tenure of the underlying FCNR(B) deposits. Banks will continue to have the freedom to determine deposit pricing according to their internal policies, subject to existing regulatory guidelines.
The swap facility will operate on all working days at the RBI’s Mumbai office, excluding Saturdays and holidays. Banks may access the facility once a week, with settlement of the first leg occurring on a spot basis. The swap will be executed at par, with banks selling US dollars to the RBI and agreeing to buy them back at maturity.
To ensure transparency, participating banks will be required to maintain separate records of deposits covered under the scheme and submit declarations confirming compliance with RBI guidelines.
The central bank noted that the initiative is intended to facilitate mobilisation of longer-term foreign currency deposits while providing banks with a mechanism to manage currency risks associated with such inflows.
Source: This article is based on an official statement published by the Reserve Bank of India.
Notifications – Reserve Bank of India
