The Reserve Bank of India (RBI) has decided to prematurely close its special forex swap facility for FCNR(B) deposits after the scheme attracted $52.3 billion in foreign exchange inflows, citing an encouraging response to the facility.
The central bank said on Friday that the facility will now be available only for FCNR(B) deposits mobilised until August 31, while swaps against these deposits can be availed with the RBI until September 11.
The RBI had introduced the special USD-INR forex swap facility on June 8, covering FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs) to attract non-resident Indian deposits and encourage banks and state-run companies to tap cheaper dollar funding. The schemes had attracted nearly $41 billion in inflows by the end of July.
As of August 13, the three channels had together generated $56.846 billion in forex inflows, with FCNR(B) deposits accounting for the bulk of the inflows.
Also read: Banks continue to garner FCNR deposits at a brisk pace
