India is projected to attract FCNR (B) deposits totaling $65-70 billion by the end of the RBI scheme on September 30, with an overall estimate of $80-$85 billion, as per a report by SBI Research. The RBI has already seen inflows of $20 billion until July 17, a positive development, especially with a substantial FCNR (B) corpus of $17.4 billion.
Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI, highlighted that the FCNR (B) deposits have surpassed the 2013 level of $26 billion in just 45 days. Public Sector Banks (PSBs) are playing a significant role in driving this mobilization, as indicated by RBI data showing $17.4 billion in FCNR (B) deposits mobilized until July 17, 2026.
The report anticipates a considerable portion of existing FCNR deposits maturing in August/September 2026 to be renewed under the new scheme due to higher interest rates, potentially boosting FCNR (B) inflows. It is estimated that around $10 billion, in addition to baseline projections, will be mobilized, particularly from economies offering tax concessions.
Despite these positive trends, there are concerns in the market regarding the correlation of these inflows with the first FCA position and the continued weakening of the exchange rate. Public Sector Banks, led by larger institutions, are spearheading this drive by leveraging both deposits and client trust across various geographies.
The RBI’s intervention in the foreign exchange market has been sporadic since disturbances in West Asia emerged. The report emphasizes the need to maintain the rupee’s resilience to external shocks without compromising competitiveness, especially amidst trade frictions, geopolitical risks, and imbalanced capital flows.
