RBI’s Forex Swap Bet Hits $20.72 Billion, Still Trailing Its $70 Billion Goal

India’s central bank has raised $20.72 billion through a special swap window since June, and four of every five dollars came from one source: NRI bank deposits. The Reserve Bank of India (RBI) said Monday that Foreign Currency Non-Resident, or FCNR(B), deposits brought in $17.406 billion as of July 17, 2026, compared with $1.97 billion from overseas bank borrowings and $1.342 billion from corporate foreign loans.

When the scheme launched, brokerages floated numbers as high as $70 billion. Doubts about reaching that figure are now public. The wager increasingly rests on a rush of NRI money before the deposit window shuts on September 30, and on borrowers who have barely shown up so far.

Deposits Carry the Load While Two Channels Lag

The RBI’s Monday statement covered three separate pipes into the same pool of money. Data from authorised dealer banks show FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCB) and External Commercial Borrowings (ECB) all draw on the same concessional swap, but they are not behaving alike.

FCNR(B) is a retail and private-banking product. A bank can market it, price it and book it within days. OFCB and ECB require a borrower, usually a public-sector company, to negotiate terms with an overseas lender first. That difference shows up starkly in the numbers.

Thirty nine days had passed since the June 8 start when the RBI published this data, out of 114 days on the FCNR(B) clock. That is roughly a third of the calendar gone against about 30% of the most ambitious $70 billion target collected. It is a workmanlike pace, not a stalled one, and it explains why bankers are not yet panicking in public.

The Bet Banks Are Still Making

Public sector bank chiefs told Finance Minister Nirmala Sitharaman last week that NRIs were responding strongly to the higher rates on offer, according to a wire report on the RBI’s data release. Punjab National Bank’s own chief executive has projected the banking sector could still raise $35 billion to $40 billion in total, with PNB alone targeting $2.5 billion to $3 billion through marketing pushes in diaspora markets.

Citi Research and Jefferies had earlier put the scheme’s realistic range at $25 billion to $70 billion, a spread wide enough to cover almost any outcome. SBI Research went further, arguing the window could beat 2013’s haul entirely. Several factors feed that confidence heading into the final stretch before September 30:

• 2013 precedent shows deposit schemes like this one tend to arrive late, not steadily.
• GIFT City branches, India’s Gujarat-based international financial centre, are now offering their own FCNR(B) rates as high as 5.75% on four-year dollar deposits, widening distribution beyond ordinary bank branches.
• Differential pricing lets banks set higher rates for larger or longer deposits, a lever unavailable in earlier NRI deposit drives.
• Fiscal year-end habits among public sector borrowers typically push ECB drawdowns later in the calendar, well past July.

That does not guarantee the top end of the range. It does explain why bankers keep repeating the same message: wait for September.

A Rate Gap That Isn’t What It Was in 2013

The arithmetic behind that bet has changed since Raghuram Rajan first ran this playbook. Back then, a US bank certificate of deposit paid around 0.25% while FCNR(B) offered roughly 5.5%, a spread near 5.25 percentage points that made the trade an easy sell to any NRI comparing accounts.

Today, a comparable US deposit pays close to 4.5% against FCNR(B)’s best available 7%, a spread of about 2.5 percentage points. That gap has been the subject of its own scrutiny on this site, in a piece detailing how the rate spread has narrowed by more than half since the original 2013 window. A narrower spread does not stop the money from coming. It just means each dollar has to work harder to look attractive against dollar-denominated alternatives NRIs can get without moving funds to India at all.

What 2013’s Slow Start Actually Looked Like

The comparison year matters because 2013 did not open strong either. Seventeen days after then-governor Rajan announced the original twin swap window on September 4, 2013, the RBI had collected just $1.4 billion combined. The facility eventually closed having mopped up $34 billion, roughly $26 billion of it through the FCNR(B) route alone, with most of the money arriving in the final two months before the scheme was tapered off.

Rajan later called it the “least bad” option available to him at the time, adding that the eventual $26 billion take was “more than anticipated” given the RBI had originally expected closer to $10 billion. That is the precedent bankers are leaning on now: a slow first month followed by a late surge.

Not every academic view agrees the comparison flatters the current scheme. A review by Ananth Narayan, a finance professor, found that only a fraction of the 2013 total was true NRI money, with much of it actually overseas bank funds routed through NRI accounts to capture the arbitrage. If that pattern repeats in 2026, the headline number could again overstate how much of it is genuine diaspora saving rather than bank balance-sheet engineering.

Where Is the Corporate Money?

If FCNR(B) is running close to pace, OFCB and ECB are not. Barclays estimated in June that the ECB leg alone could see $10 billion to $15 billion in uptake, drawing on the fact that public sector undertakings typically raise $10 billion to $12 billion a year through external commercial borrowing routes regulated under FEMA. Six weeks in, ECB inflows under the swap sit at $1.342 billion, a fraction of even the cautious estimate.

This may see an uptake of around $10-15 billion over the next few months, but demand will still be constrained by the fact that global rates are still elevated.

Barclays made that call in a research note published shortly after the scheme’s launch. The bank’s own hedge, built into the estimate, was that elevated global borrowing costs would slow public sector enterprises down even with a concessional swap on offer.

Where forecasters split is instructive on its own.

• SBI Research believes FCNR(B) alone could exceed the entire $34 billion mobilised in 2013.
• Barclays sees the ECB leg constrained by elevated global interest rates regardless of the concession on offer.
• Ananth Narayan has questioned whether reviving an “unconventional and expensive” 2013-era tool was necessary at all this time around.

PSU borrowers have longer to prove Barclays wrong. Their window, unlike the FCNR(B) deposit window, does not close until December 31, with the swap facility itself administratively open into mid-January 2027.

September 30 and December 31 Carry Different Odds

The two deadlines now carry different probabilities baked in. FCNR(B) has ten weeks left and a historical pattern of late surges working in its favour. OFCB and ECB have close to six months left but a much larger gap to close against even conservative expectations.

The backdrop has not gotten easier. India’s forex reserves had slipped from a February peak near $728 billion to around $682 billion, while the rupee’s own struggles have continued even as the swap scheme brought in fresh dollars, a dynamic covered in detail after the rupee slipped past 96 to the dollar. NRI deposit inflows outside this scheme had already collapsed from around $7 billion in FY25 to under $1 billion in FY26, which is precisely the gap the RBI built this facility to plug.

None of the money raised so far can walk back out the door early. Every swap the RBI signs with a bank runs to full maturity once locked in. By January 15, 2027, when the last administrative window on this scheme closes, India will know whether the September rush bankers keep promising actually showed up, or whether $20.72 billion turns out to be closer to the ceiling than the floor.

Frequently Asked Questions

What Is an FCNR(B) Deposit?

FCNR(B) stands for Foreign Currency Non-Resident (Bank) deposit, a term deposit NRIs hold in foreign currency, including US dollars, pounds, euros, Australian and Canadian dollars, at an Indian bank. Both principal and interest stay in the foreign currency, so the depositor carries no direct rupee depreciation risk, and the interest earned is tax free in India.

How Long Must NRIs Keep Their Money Locked In?

Deposits under the swap scheme need a minimum tenure of three to five years and carry a one-year lock-in from the date the account opens. The bank’s own swap agreement with the RBI runs to full maturity regardless of what the depositor later decides to do.

Can Banks Lend Against These Swapped Deposits?

Yes. An RBI clarification issued June 23, 2026 allows authorised dealer banks to extend loans or issue standby letters of credit against eligible FCNR(B) deposits and to place a lien on them, making the deposits more useful as collateral rather than money sitting idle.

Who Bears the Risk If the Rupee Falls Further?

The RBI does, not the depositor. Once a bank swaps deposit dollars into rupees with the central bank, that contract cannot be cancelled. Analysts have estimated the RBI’s total swap liability could run as high as $50 billion to $70 billion if deposit mobilisation approaches the upper end of original projections, exposure the central bank absorbs so banks and NRIs do not have to.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice; deposit rates, swap terms and figures cited are accurate as of publication and NRIs considering FCNR(B) deposits should confirm current terms directly with their bank or the RBI.