Overview
- The Reserve Bank of India introduced a special swap facility this week for fresh FCNR(B) deposits of three to five years and said it will absorb the full hedging cost while the window runs until September 30, 2026.
- The RBI also temporarily removed interest‑rate ceilings on three‑to‑five year FCNR(B) and relaxed CRR and SLR treatment for incremental deposits mobilised in the window, effective immediately.
- Public and private lenders quickly moved to capture funds by lifting dollar deposit offers to roughly 6 percent for many banks and up to about 7.1 percent at some private lenders, with named schemes from SBI, Bank of Baroda, Canara Bank, Indian Overseas Bank and others.
- Several private banks are discussing offshore tie‑ups and credit structures that use liens or standby letters of credit to magnify FCNR(B) placements, plans that could broaden dollar mobilisation if counterparties and clients agree to those deals.
- Analysts estimate roughly $40–60 billion could flow through the measures, which would bolster reserves, support the rupee and ease domestic deposit stress, but actual impact will depend on NRI participation and how quickly the proposed financing structures scale.