Reserve Bank of India sets August 31 mobilization deadline for deposit swap facility
What happened
The Reserve Bank of India announced that its special foreign exchange swap facility for Foreign Currency Non-Resident (Bank) deposits will apply only to funds mobilized through August 31, 2026. Authorized dealer banks reported $56.85 billion in total forex inflows under the facility introduced on June 8, 2026, including $52.30 billion in FCNR(B) deposits, $2.81 billion in Overseas Foreign Currency Borrowings, and $1.74 billion in External Commercial Borrowings. Banks have until September 11, 2026, to execute the FCNR(B) swaps with the central bank.
Why it matters
The decision to wind down the deposit swap window follows a strong response, as FCNR(B) deposits accounted for the vast majority of foreign exchange brought in under the facility. While deposit mobilization ends in August, commercial entities and financial institutions retain access to foreign exchange swaps for External Commercial Borrowings and Overseas Foreign Currency Borrowings through year-end.
Bigger picture
The step demonstrates how central banks adjust temporary foreign exchange liquidity operations based on reported capital inflows across different financial channels. By concluding the deposit swap program early while keeping corporate borrowing facilities active, the RBI modulates short-term capital accumulation while maintaining support for medium-term debt funding.
Watch next
Watch for banks to execute remaining FCNR(B) swaps by September 11, 2026, and track inflow levels under the ECB and OFCB swap facilities ahead of their December 31, 2026 closure.