Union Finance Minister Nirmala Sitharaman conducted a review meeting with Managing Directors and CEOs of Public Sector Banks and Public Financial Institutions regarding the progress under RBI's swap facility schemes for Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs).
Banks reported an encouraging response from the Indian diaspora abroad with healthy interest across all three swap schemes. The suspension of the interest rate ceiling on fresh FCNR(B) deposits has enabled banks to offer attractive returns, including on five-year deposits, supporting accelerated deposit mobilization. Significant interest has been noted from NRIs residing in Singapore, Hong Kong, West Asia, United Kingdom, United States, and other overseas jurisdictions.
Public Sector Banks outlined their plans to capitalize on the positive sentiment and accelerate deposit mobilization during the remainder of the scheme period. They expressed confidence that ECB mobilizations would gather stronger traction during the third quarter of the current fiscal year (October-December 2026). Banks have implemented customized outreach strategies, including digital channels, to engage with the NRI diaspora and enhance deposit mobilization.
The International Banking Units (IBUs) at the International Financial Services Centre (IFSC), GIFT City, Gujarat, are being utilized to leverage fund mobilization from multiple jurisdictions including the United Kingdom, United States, West Asia, Hong Kong, Singapore, and Southeast Asia. The RBI Deputy Governor assured active support to banks and financial institutions in mobilizing deposits and facilitating eligible borrowings, noting that a robust daily reporting framework enables transparent, real-time monitoring of progress across participating institutions.
The swap schemes were announced by the RBI Governor in the Monetary Policy Statement of June 5, 2026, comprising a US Dollar-Rupee forex swap facility at par for fresh FCNR(B) deposits and a concessional swap facility for eligible ECBs and OFCBs. These initiatives aim to attract foreign capital, strengthen the balance of payments, and incentivize capital inflows. FCNR(B) deposits are eligible under the scheme until September 30, 2026, while ECBs and OFCBs are eligible until December 31, 2026.
The broad-based participation of public and private sector banks and financial institutions underscores the effectiveness of these swap facilities in mobilizing foreign currency inflows, reinforcing India's foreign exchange reserves, and strengthening the resilience of the external sector amid global uncertainty.