India’s central bank just pulled off a financial maneuver that would make most central bankers jealous. The Reserve Bank of India’s foreign currency deposit drive has attracted nearly $10 billion in inflows, a significant chunk of what analysts expect could become a $30 to $40 billion flood of capital into the country.
How the RBI’s dollar vacuum works
On June 5, 2026, the RBI announced its Foreign Currency Non-Resident (Banks) swap facility, known in banker shorthand as FCNR(B). Indian banks can now collect foreign currency deposits from non-resident Indians, swap those deposits for rupees with the RBI, and the central bank picks up the tab on hedging costs.
The RBI also exempted these deposits from certain statutory liquidity requirements. Banks responded by cranking FCNR(B) rates to record levels above 7%, making these deposits significantly more attractive than comparable options in Gulf states and other regions where large NRI populations reside.
By early July 2026, banks had already booked nearly $5 billion in deposits under the new facility. Combined with broader deposit activity connected to the initiative, the total has approached the $10 billion mark.
