Overview
- The RBI issued a time‑bound US dollar–rupee swap for fresh FCNR(B) deposits on June 8, covering deposits mobilised June 8–Sept. 30 and keeping the swap window open until Oct. 16; eligible deposits carry a one‑year lock‑in and swaps cannot be cancelled.
- Under the scheme the RBI will fully bear exchange‑rate (hedging) risk, allow at‑par swaps and exempt eligible deposits from CRR and SLR to lower banks’ costs and encourage higher dollar deposit rates.
- Banks have begun lifting FCNR(B) offers, with some quoting around 7%, but analysts say large inflows depend on banks matching overseas dollar yields and on whether leverage routes are used by depositors.
- The RBI also set a concessional swap for certain ECB/OFCB borrowings limited to PSUs at a fixed 1.5% premium and provided balance‑sheet relief by excluding these swap positions from net open position limits.
- Observers compare the move to the 2013 FCNR(B) drive that raised about $26–34 billion; analysts now forecast $50–70 billion in possible inflows but warn the outcome hinges on bank pricing, leverage and global yield conditions.