The strong inflows have been supported by attractive interest rates of 6-7.5 per cent and leverage of 9-19 times offered to NRIs
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Banks seem to be going all out to mobilise funds under Foreign Currency Non-Resident (Bank) deposits. Between June 8th and up to July 31st, they have mopped up $36.725 billion via these deposits under the RBI’s limited period facility that bears the full hedging cost.The robust inflows should be seen in the context of banks offering leverage (9 to 19 times) and higher interest rates (about 6-7.50 per cent) to Non-Resident Indians (NRIs).RBI measures drive foreign capital inflowsAs part of its measures to attract foreign capital and stabilise the RBI, in its monetary policy review, announced two key measures – provision of a facility for bearing the full hedging cost to banks to for raising fresh 3–5-year FCNR (B) deposits and a facility of concessional forex swap to incentivize ECBs by PSUs. Both these facilities are available till September 30, 2026.Overall, India has received robust forex inflows aggregating $40.816 billion since June 8th, including $36.725 billion via FCNR (B) deposits, $2.575 billion via overseas foreign currency borrowings and $1.516 billion via external commercial borrowings.Governor upbeat on inflows, banker sees upsideIn an interaction with businessline last Sunday, RBI Governor Sanjay Malhotra said: “At this pace, the total inflows are likely to be robust..... The external real economy in terms of current account and FDI is doing reasonably well given the circumstances where crude oil prices have gone up.“It is the expectations channel which needs to be anchored to the real fundamentals of the economy. I am confident that the structural as well as capital flow related measures that have been taken by the Government and RBI should, going forward, improve the sentiment.”V Rama Chandra Reddy, Head – Treasury, Karur Vysya Bank, said: “If the current pace of FCNR(B) inflows, as reflected in the RBI data, continues, we may well see three digit US Dollar billion mobilisation, significantly exceeding the initial estimates of USD 50–60 billion. The momentum so far has been pleasantly surprising.”Published on August 1, 2026
