Parliament Question: Foreign Currency Non-Resident Bank (FCNR-B) Deposits

GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS LOK SABHA UNSTARRED QUESTION No. 2489 ANSWERED ON MONDAY, AUGUST 3, 2026/SHRAVANA 12, 1948 (SAKA) FOREIGN CURRENCY NON-RESIDENT BANK (FCNR-B) DEPOSITS 2489. SHRI MANISH TEWARI: SHRI LAVU SRI KRISHNA DEVARAYALU: SHRI DAGGUMALLA PRASADA RAO: Will the Minister of FINANCE be pleased to state: (a) whether the Government has taken note of the Reserve Bank of India's recent decision to introduce a US Dollar-Rupee forex swap facility for fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits to encourage foreign currency inflows; (b) if so, the objectives of the scheme, including its expected impact on foreign exchange reserves, external sector stability, banking sector liquidity and the value of the Indian Rupee; (c) the details of the subsequent measures taken by the Government to increase Foreign Currency Non-Resident Bank (FCNR-B) deposits, including the easing of regulatory norms and other incentives offered; (d) the total amount of foreign currency deposits and capital inflows mobilised through FCNR (B) deposits pursuant to such relaxed norms, classified bank-wise, along with the corresponding growth in deposits; (e) whether the Government has examined the compliance requirements for NRIs under foreign tax regulatory jurisdictions while undertaking FCNR(B) deposits; if so, the details of the issues examined and the measures taken to address them; (f) whether the Government has estimated the cost of concessional hedging or swap support provided to facilitate FCNR(B) deposits; (g) if so, the details thereof, including the estimated fiscal or financial implications; and (h) the measures taken to mitigate currency and exchange rate risks arising from FCNR(B) deposits, including the risk management framework and safeguards adopted to protect India'sexternal sector stability including the safeguards put in place to ensure that the scheme remains temporary, does not create undue contingent liabilities and effectively contributes to strengthening India's external financing position? ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY) *** (a) Yes. On June 05, 2026, the Reserve Bank of India (RBI) announced a US Dollar-Rupee Forex Swap Facility for fresh FCNR (B) deposits, mobilised for a minimum tenor of three years and maximum tenor of five years. The facility came into effect on June 8, 2026 and will remain available until October 16, 2026 for deposits mobilized between June 8, 2026 and September 30, 2026. The relevant RBI notification may be accessed at the official RBI Website. (b) The measure is intended to attract stable foreign currency inflows, strengthen India’s balance of payments and help ease recent pressures on the Indian Rupee. As the fresh FCNR(B) deposits mobilized by banks will be swapped with the RBI, it is expected to increase the foreign exchange reserves as well as the banking system liquidity after the first leg of the transaction and the same will be reversed on maturity i.e. the second leg of the transaction. The increase in foreign exchange reserves and banking system liquidity will depend on the total amount of foreign currency mobilized under the forex swap facility during the period. (c) RBI, vide notification no. RBI/2026-27/99 dated June 8, 2026, has advised the banks that fresh FCNR(B) deposits of minimum tenor of three years and maximum tenor of five years mobilized (including deposits that are renewed upon maturity) by them between from June 8, 2026 to September 30, 2026 are exempt from maintenance of Cash Retention Ratio (CRR) and Statutory Liquidity Ratio (SLR). (d) FCNR(B) Deposits have grown from USD 32558.5 million as on 05.06.2026 to USD 60548.7 million as on 30.07.2026. Amount of FCNR(B) Deposit Balances of AD Category-1 Banks (under new swap facility) as on 05.06.2026 and 30.07.2026 are tabulated below:S.No. Authorised Dealer Banks FCNR(B) FCNR(B) Outstanding as Outstanding as on 05.06.2026 on 30.07.2026 (USD million) (USD million) 1. Bank of Baroda 2828.58 3873.93 2. Bank of India 778.97 986.43 3. Bank of Maharashtra 32.61 42.89 4. Canara Bank 970.99 1904.46 5. Central Bank of India 287.54 396.00 6. Indian Bank 509.54 1345.41 7. Indian Overseas Bank 343.70 712.97 8. Punjab & Sind Bank 26.66 27.44 9. Punjab National Bank 430.87 1400.50 10. State Bank of India 9698.00 13822.00 11. UCO Bank 18.17 125.58 12. Union Bank of India 823.23 951.41 (A) Public Sector Banks 16748.87 25589.01 13. Axis Bank Limited 3080.74 4666.82 14. Bandhan Bank Limited 11.23 15.11 15. Citibank N.A 0.00 0.00 16. City Union Bank Limited 77.58 74.44 17. Csb Bank Limited 66.93 100.61 18. Dcb Bank Limited 155.28 172.85 19. Dhanlaxmi Bank Limited 23.70 30.71 20. Federal Bank Ltd 777.44 910.03 21. Hdfc Bank Ltd. 4015.16 5423.41 22. Icici Bank Limited 2366.02 6064.02 23. Idfc First Bank Limited 297.71 427.62 24. Indusind Bank Ltd 1507.27 1862.78 25. Jammu & Kashmir Bank Ltd 14.90 14.62 26. Karnataka Bank Ltd 79.52 85.81 27. Karur Vysya Bank Ltd 129.97 141.60 28. Kotak Mahindra Bank Ltd. 684.67 2344.12 29. Rbl Bank Ltd 256.88 813.56 30. South Indian Bank Ltd 419.86 470.55 31. Yes Bank Ltd. 689.66 1500.05 32. Idbi Bank Limited 202.41 465.73 33. Tamil Nadu Mercantile Bank Ltd 89.28 92.09 (B) Private Sector Banks 14946.22 25676.52 34. Bank Of Bahrain & Kuwait B.S.C. 0.00 42.22 35. Bank Of Ceylon 1.60 1.65 36. Barclays Bank Plc 8.73 0.00S.No. Authorised Dealer Banks FCNR(B) FCNR(B) Outstanding as Outstanding as on 05.06.2026 on 30.07.2026 (USD million) (USD million) 37. Bassein Catholic Co-Op.Bank Ltd. 1.76 0.00 38. Dbs Bank India Limited 282.67 613.55 39. Deutsche Bank Ag 12.89 10.57 40. Doha Bank Q.P.S.C. 32.29 27.96 41. Emirates Nbd Bank (P.J.S.C.) 1.19 0.51 42. Jpmorgan 0.00 20.00 43. Mufg Bank, Ltd. 0.29 0.00 44. Sbm Bank (India) Limited 141.34 137.21 45. Standard Chartered Bank 0.00 1857.80 46. HSBC 120.26 6261.00 (C ) Foreign Banks 603.02 8972.46 (D) Small Finance Banks 232.01 281.61 (E) Co-Operative Banks 28.40 29.10 Grand Total (A+B) 32558.50 60548.72 Source: RBI (e) to (h): For strengthening the Balance of Payments and to attract foreign capital, the Reserve Bank of India (RBI), introduced the US Dollar-Rupee Forex Swap Facility for FCNR(B) deposits, External Commercial Borrowings and Overseas Foreign Currency Borrowings. To ensure its effectiveness various factors such as prevailing market conditions, interest rate differentials, expected returns for investors, hedging costs, compliance requirements, etc. were considered. The potential cost of providing the swap facility would depend on the quantum of foreign exchange mobilised, the maturity of the swaps and exchange rate as well as the forward premia at the time of the swap. Further, RBI has well defined risk identification and mitigation measures in place for managing the country's foreign exchange reserves.