RBI’s Forex Swap Facility Attracts $72.85 Bn: What It Means For Indian Banks

The Reserve Bank of India’s (RBI) special US dollar-Indian rupee (USD-INR) forex swap facility has received $72.85 billion in forex inflows till August 21, 2026. The inflows include foreign currency deposits and overseas borrowing by Indian entities, according to data reported by Authorised Dealer Banks as cited by CNBC-TV18.

Of the total inflows, Foreign Currency Non-Resident (Bank) or FCNR(B) deposits accounted for $65.40 billion, while Overseas Foreign Currency Borrowings (OFCBs) brought in $4.86 billion and External Commercial Borrowings (ECBs) contributed $2.59 billion.

The RBI introduced the special USD-INR forex swap facility on June 8, covering FCNR(B) deposits, ECBs and OFCB inflows. The facility is open for FCNR(B) deposits until August 31, while the window for ECBs and OFCBs will remain available until December 31, 2026.

Indian Banks Step Up Dollar Fundraising

The RBI’s special swap facility comes as Indian banks are increasingly raising funds from overseas markets. The facility offers banks and state-run companies a fixed annual swap rate of 1.5% for an average maturity of at least three years, helping reduce their dollar funding costs.

HDFC Bank recently raised $1.75 billion through a dollar bond issue, its biggest overseas fundraise since the 2008 global financial crisis. The issue was carried out through its GIFT City branch and included $500 million of three-year bonds and $1.25 billion of five-year bonds.

The three-year bonds carry a 5.159% coupon, while the five-year bonds carry a 5.401% coupon. Both are scheduled to settle on August 26, with the bonds maturing in 2029 and 2031, respectively.

More Banks Tap Overseas Debt Markets

HDFC Bank’s fundraising is part of a wider push by Indian lenders to raise dollars overseas. IDFC First Bank raised $500 million, while Kotak Mahindra Bank raised around $650 million through its debut five-year dollar bond issue.

ICICI Bank and State Bank of India (SBI) have also raised funds through overseas debt markets as lenders look to benefit from the current borrowing environment and the RBI’s swap facility.

The bonds issued by HDFC Bank will be listed on India INX and the National Stock Exchange (NSE). Moody’s has assigned them a Baa3 rating, while S&P Global Ratings has rated them BBB.