FM Sitharaman meets PSB chiefs; RBI's FCNR(B), ECB swap schemes see strong NRI response
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Finance Minister Nirmala Sitharaman on Monday reviewed the progress of the Reserve Bank of India's (RBI) foreign currency swap initiatives with the managing directors and chief executive officers of public sector banks (PSBs) and public financial institutions (PFIs), with lenders reporting a strong response from the Indian diaspora and growing momentum in foreign currency deposit mobilisation.
The bank chiefs briefed the minister on the implementation of the RBI's swap facilities for Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs).
According to the banks, the schemes have received an encouraging response from non-resident Indians (NRIs), with healthy interest across FCNR(B) deposits, ECBs, and OFCBs. Lenders said they are offering attractive returns on FCNR(B) deposits, including five-year tenures, aided by the RBI's decision to suspend the interest rate ceiling on fresh FCNR(B) deposits under the scheme.
The lenders said demand has been particularly strong from NRIs based in Singapore, Hong Kong, West Asia, the UK, the US, and other overseas markets.
Bank executives also outlined plans to build on the positive momentum and accelerate deposit mobilisation during the remaining tenure of the schemes. They expressed confidence that ECB mobilisation would gather stronger traction in the third quarter of FY27 (October-December 2026).
PSBs informed the finance minister that they have rolled out customised outreach programmes, including digital engagement initiatives, to connect with the NRI diaspora and boost deposit mobilisation. They noted that FCNR(B) deposits have been witnessing a clear acceleration, supported by competitive returns.
The banks further said they are leveraging International Banking Units (IBUs) at the International Financial Services Centre (IFSC) in GIFT City, Gujarat, to mobilise funds from multiple global markets, including the UK, the US, West Asia, Hong Kong, Singapore and Southeast Asia. Sitharaman urged lenders to maximise the use of GIFT City's financial ecosystem and institutional infrastructure.
During the meeting, the RBI Deputy Governor assured banks and financial institutions of the central bank's continued support in mobilising deposits and facilitating eligible borrowings. The RBI also highlighted that its daily reporting framework is enabling transparent, real-time monitoring of progress across participating institutions.
Appreciating the encouraging initial response, Sitharaman asked banks to intensify outreach efforts among the NRI community, introduce innovative deposit products and sustain the mobilisation drive during the remaining period of the schemes.
The finance ministry said the participation of public sector banks, private sector banks and public financial institutions reflects the effectiveness of the swap facilities in attracting foreign currency inflows, strengthening India's foreign exchange reserves and enhancing the resilience of the country's external sector amid global uncertainties.
The RBI had announced the US dollar-rupee forex swap facility at par for fresh FCNR(B) deposits, along with a concessional swap facility for eligible ECBs and OFCBs, in the Monetary Policy Statement on June 5, 2026. The measures are aimed at attracting foreign capital, strengthening the balance of payments and incentivising capital inflows. Under the scheme, fresh FCNR(B) deposits are eligible until September 30, 2026, while ECBs and OFCBs can avail the facility until December 31, 2026.
The meeting was also attended by the Secretaries of the Departments of Financial Services, Economic Affairs and Revenue, the Chief Economic Adviser, the RBI Deputy Governor, and other senior government officials.