Banks have mobilised nearly $32 billion through FCNR(B) deposits in about 45 days, surpassing the previous 2013 record of $26 billion, RBI Governor Sanjay Malhotra said.
Along with over $7 billion in government securities inflows, SBI estimates total inflows could reach $80–85 billion across FCNR(B), ECB and OFCB routes by year-end.
Despite the record foreign capital inflows, the rupee remains near an all-time low as persistent dollar demand outweighs RBI's forex market interventions.
India's $32 Billion Capital Bonanza; RBI Governor Says FCNR Deposits Shatter Previous Record
RBI Governor Sanjay Malhotra says banks have mobilised nearly $32 billion in FCNR(B) deposits, surpassing the 2013 record in just 45 days, even as the rupee remains under pressure
Summary
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India has attracted $32bn in foreign capital, as a record-breaking pace in Foreign Currency Non-Resident (Bank) deposits drives the inflows. RBI Governor Sanjay Malhotra told The Hindu BusinessLine.
The current FCNR(B) collection has already eclipsed the 2013 benchmark of $26bn in approximately 45 days. This rapid accumulation marks one of the swiftest efforts to mobilise foreign currency in the country's economic history.
"Till date, banks have mobilised almost $32 billion," Malhotra told the publication. The previous record drive in 2013 mobilised $26bn over a much longer period, highlighting the unprecedented speed of the current capital influx.
Inflow Channels And Projections
The RBI policy announcements on June 5 included dedicated facilities offering concessional swaps designed to incentivise capital inflows, support the balance of payments, cushion the depreciating rupee and help contain imported inflation. Since then, government securities have registered inflows exceeding $7bn.
"Obviously, most of it is coming through FCNR(B) deposits. The figures related to ECBs and OFCBs are lumpy.
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In addition, we have got more than $7 billion in inflows into government securities since June 5, when the policy announcements with respect to government securities were made. At this pace, the total inflows are likely to be robust," Malhotra said.
The FCNR(B) window remains active until September 30. Meanwhile, the external commercial borrowing (ECB) and overseas foreign currency borrowing (OFCB) windows close on December 31.
State Bank of India estimates, as reported by Economic Times, suggest FCNR(B) collections could total $65bn to $70bn. Combined inflows across all three channels might hit $80bn to $85bn, the SBI report stated.
The report added that most existing FCNR deposits maturing in August-September 2026 should renew under the new scheme. Higher interest rates will drive these renewals, further boosting FCNR(B) inflows.
Addressing fears that older funds were being recycled to capture higher interest yields, the central bank chief dismissed the risk.
"We do not find any prima facie evidence of recirculation of the existing deposits, in whatever form, to be of any significance or concern," Malhotra said.
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Rupee Under Persistent Pressure
Despite the massive capital injection, the domestic currency remains weak. The rupee is currently trading near its historical low of around 96.15 against the dollar, which analysts attribute to persistently high dollar demand.
To support the currency, the RBI intervenes by selling an average of $14mn a day.
The SBI report stated that the RBI's intervention in the foreign exchange market has been sporadic and not full throttled since the disturbances in West Asia broke out.
However, the volatility coefficient is positive but remains statistically insignificant, suggesting this intervention scale has not effectively halted depreciation or reined in volatility. Persistent dollar demand continues to offset the incoming funds.