The Reserve Bank of India (RBI) on Monday issued concessional swap details for all authorised dealer banks for fresh FCNR(B) deposits and also external commercial borrowings.

After announcing these measures in the June 5 monetary policy Friday last, these measures are viewed as steps which will enable banks to raise, expectedly, billions of dollars into India, boost forex reserves and stabilise the rupee.

The rupee has been one of the worst performing currencies against the dollar in the past year, hurt by rising demand for dollars amid a surge in crude oil prices and sustained foreign fund outflows. 

Economists have estimated that the combined offerings could raise between $35-$60 billion in foreign inflows.

The RBI, in a press statement said the FCNR(B) deposits are to be mobilised for a 3 to 5-year tenor.

“Under the swap arrangement, a bank can sell US dollars in multiples of $1 million to RBI and simultaneously agree to buy the same amount of dollars at the end of the swap period,” the press statement says.

In the first leg of the transaction, the bank will sell dollars to RBI at FBIL reference rate. The settlement of the first leg of the swap will take place on spot basis from the date of transaction. The second leg of the swap will take place at the same rate as the first leg. The swap will be undertaken at par, the central bank said.

“The underlying deposits will have a lock-in period of one year. The banks may at their discretion allow premature withdrawal of such deposits after one year, as per their internal policy. However, swaps undertaken with RBI cannot be cancelled,” the release says.

The swap facility comes into effect immediately and will remain open up to October 16, 2026 for deposits mobilized between the date of this circular and September 30, 2026.

ECB guidelines

For External Commercial Borrowings (ECBs), the average maturity must be three years or more, drawn between June 8, 2026, and December 31, 2026.

The swap facility will be available to the PSU ECB borrowers through their authorised dealer category-I banks for eligible ECBs and eligible OFCBs raised by the banks, raised in any currency. However, the swap facility with RBI will be available in US dollars only.

Under the swap arrangement, a bank can sell dollars to RBI and simultaneously agree to buy the same amount of dollars at the end of the swap period, in multiples of 1 million dollars. The swap will be undertaken at a fixed rate of 1.5% per annum compounded semi-annually. In the first leg of the transaction, the bank will sell dollars to RBI at the FBIL Reference Rate, the press release from the central bank said.

The swap facility comes into effect from June 8, 2026 and will remain open up to January 15, 2027 for eligible ECB drawdowns made and OFCB flows received up to December 31, 2026.