India's foreign exchange position has received a significant boost after the Reserve Bank of India’s special USD-INR forex swap facility mobilised $72.85 billion in foreign currency inflows as of August 21, 2026. The RBI's latest data shows that Foreign Currency Non-Resident (Bank), or FCNR(B), deposits accounted for the overwhelming majority of the funds raised under the facility.
The special facility, launched by the RBI on June 8, was designed to encourage foreign-currency inflows through FCNR(B) deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs). The initiative was aimed at strengthening foreign exchange availability in India's financial system and supporting the country's external position.
FCNR(B) Deposits Cross $65 Billion
According to the latest RBI data, authorised dealer banks reported $65.397 billion in inflows through FCNR(B) deposits under the facility. This represents roughly 90% of the total $72.85 billion mobilised.
ECBs contributed approximately $2.591 billion, while OFCBs accounted for around $4.86 billion. Together, the latter two sources contributed about $7.45 billion to the total inflows.
The strong response from banks and overseas depositors indicates significant demand for the RBI-backed foreign-exchange mechanism, particularly from the Indian diaspora and institutions raising funds overseas.
Why Did RBI Launch the Forex Swap Facility?
The RBI introduced the special USD-INR swap mechanism to improve foreign-currency liquidity and encourage banks to bring more overseas funds into India. The facility offered banks a mechanism to manage the currency risks associated with raising foreign-currency deposits and borrowings.
The large inflows have also supported India's overall foreign-exchange position. India's forex reserves climbed to $716.90 billion as of August 14, an increase of almost $9.9 billion in a week, according to RBI data.
The surge in reserves has strengthened India's external financial position at a time when global markets remain sensitive to oil prices, geopolitical developments and currency movements.
FCNR(B) Window Ends August 31
The RBI's special facility does not have the same deadline for all components. The FCNR(B) deposit window is scheduled to remain open until August 31, while the facilities covering ECBs and OFCBs will continue until December 31, according to the central bank's framework.
The RBI had earlier brought forward the closure of the FCNR(B) facility after inflows exceeded expectations. Reuters reported that the programme had already attracted more than $50 billion from non-resident deposits by mid-August, contributing to a sharp improvement in India's balance-of-payments outlook.
What Does the $72.85 Billion Inflow Mean for India?
The massive mobilisation provides India with an additional foreign-currency cushion and can help strengthen the country's external liquidity. A stronger reserve position can also improve confidence in India's ability to meet external payment obligations and manage periods of volatility in global financial markets.
However, these inflows should not be interpreted as a permanent increase in India's wealth. FCNR(B) deposits and overseas borrowings represent foreign-currency liabilities for the banking system, meaning they have to be repaid according to their respective maturities.
The RBI therefore needs to balance the benefits of stronger reserves and liquidity against issues such as future repayment obligations, currency risk and domestic liquidity management.
For now, the numbers demonstrate the strong response to the central bank's temporary forex initiative. With $72.85 billion mobilised and FCNR(B) deposits crossing $65 billion, the programme has become an important contributor to India's improved foreign-exchange position in 2026.
