FM Nirmala Sitharaman Reviews RBI Swap Schemes; Urges Banks to Step Up NRI Outreach for Foreign Currency Mobilisation – Indian PSU

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on Monday reviewed the progress of the Reserve Bank of India’s special swap facility schemes aimed at attracting foreign currency inflows and called upon banks to intensify outreach to the Non-Resident Indian (NRI) diaspora to sustain the momentum of mobilisation.

The Finance Minister held an interaction with Managing Directors and Chief Executive Officers of Public Sector Banks (PSBs) and Public Financial Institutions (PFIs) on the implementation of the RBI’s Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs) swap initiatives in New Delhi.

The meeting was attended by the Secretaries of the Department of Financial Services, Department of Economic Affairs and Department of Revenue, the Chief Economic Advisor, the Deputy Governor of the Reserve Bank of India (RBI), and other senior officials.

Strong Response from NRIs

During the review, heads of PSBs and PFIs informed the Finance Minister that the RBI’s swap facility schemes have received an encouraging response from the Indian diaspora across key global markets.

Banks reported significant interest from NRIs based in Singapore, Hong Kong, West Asia, the United Kingdom, the United States, and several other overseas jurisdictions.

The lenders highlighted that attractive returns on FCNR(B) deposits—particularly five-year deposits—combined with the RBI’s suspension of the interest rate ceiling on fresh FCNR(B) deposits, have boosted investor interest.

ECB Mobilisation Expected to Accelerate

Bank executives expressed confidence that mobilisation under External Commercial Borrowings (ECBs) would gather stronger momentum during the third quarter of FY 2026-27 (October–December 2026).

They also informed the Finance Minister that customised outreach campaigns, digital engagement strategies and targeted marketing initiatives have been launched to strengthen engagement with the global NRI community and enhance foreign currency deposit mobilisation.

According to the banks, FCNR(B) deposits are witnessing a clear acceleration as awareness of the scheme increases.

GIFT City to Play a Bigger Role

The banks also informed the Finance Minister that International Banking Units (IBUs) operating from the International Financial Services Centre (IFSC), GIFT City, are playing an increasingly important role in mobilising funds from multiple global jurisdictions, including the United States, the United Kingdom, West Asia, Hong Kong, Singapore and Southeast Asia.

Sitharaman urged banks to maximise the use of the financial ecosystem and institutional infrastructure available at GIFT City to further strengthen overseas fund mobilisation.

RBI Assures Full Support

The RBI Deputy Governor assured participants that the central bank is actively supporting banks and financial institutions in mobilising deposits and facilitating eligible borrowings under the schemes.

The meeting also noted that the RBI’s robust daily reporting framework has enabled transparent and real-time monitoring of the progress made by participating institutions.

Finance Minister Calls for Sustained Momentum

Appreciating the encouraging initial response, Sitharaman urged banks to further strengthen their engagement with NRIs, introduce innovative deposit products and maintain the momentum throughout the remaining validity period of the schemes.

She emphasised that sustained participation by public sector banks, private sector banks and public financial institutions would help attract greater foreign currency inflows, reinforce India’s foreign exchange reserves and strengthen the country’s external sector resilience amid global economic uncertainties.

The RBI had announced the special swap facilities in its Monetary Policy Statement of June 5, 2026. The package includes a US Dollar-Rupee forex swap facility at par for fresh FCNR(B) deposits and concessional swap facilities for eligible ECBs and OFCBs to encourage foreign capital inflows and strengthen India’s balance of payments.

Under the current framework, FCNR(B) deposits remain eligible until September 30, 2026, while ECBs and OFCBs are eligible until December 31, 2026.