- Finance Minister and RBI outline strategies to attract foreign capital and address concerns regarding FII holdings.
- RBI policy and global factors are currently influencing yields in the Indian sovereign debt market.
- Centre allows RBI to introduce concessional forex swap window, while tax relief encourages foreign portfolio investor inflows.
- RBI provides concessional swap facility to banks as part of efforts to boost capital inflows in India.
RBI Concessional Swap Window Drives Deposit Growth to 15-Year High
What happened
The Reserve Bank of India's concessional swap window for FCNR(B) deposits closed on the fortnight ending August 31, 2026. During this period, deposit growth reached a 15-year high of 17.8 per cent. This surge was driven by FCNR(B) inflows, which reached $127.2 billion by August 31. In absolute terms, deposits increased by nearly Rs 9.5 trillion, while credit growth in the banking system stood at 19.1 per cent.
Why it matters
The RBI's action successfully mobilized significant foreign funds into the Indian financial system. Banks responded to the influx by raising deposit rates and increasing fund mobilization efforts. This influx helped narrow the gap between credit growth and deposit growth.
The RBI provides concessional swap facilities to banks as part of efforts to boost capital inflows in India.
Who's involved
- Reserve Bank of IndiaCentral bank of India that manages the concessional swap facility.
- bankFinancial institution that accepts deposits and benefits from fund inflows.
Keep exploring
Part of
RBI provides concessional swap facility to banks as part of efforts to boost capital inflows in India.Also in this story
- RBI manages liquidity via foreign-exchange swaps.
- State Bank of India benefits from RBI's concessional swap window policy by issuing dollar-denominated bonds referencing US Treasuries.
The entities involved
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Reserve Bank of India
central bank of India
Related events
- RBI's swap facility closure is now affecting demand for FCNR(B) deposits.
- RBI closed its concessional swap window and implemented measures to bolster India's balance of payments.
- The Reserve Bank of India permits bank expansion in India in line with government objectives.
- IDFC First Bank stock traded on BSE at Rs. 84.95, while the bank utilized the RBI FCNR(B) swap window for deposit mobilization.
- The Reserve Bank of India rolled out new measures aimed at attracting foreign capital to bolster the nation's balance of payments.