The Reserve Bank of India’s (RBI) decision to prematurely close its special FCNR(B) deposit mobilisation window is unlikely to materially undermine the liquidity and funding benefits already generated for banks, with the scheme having mobilised substantially higher inflows than initially expected, according to a report by CareEdge Ratings.
The RBI has brought forward the deadline for banks to mobilise fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits to August 31, 2026, from September 30, amid strong foreign currency inflows. As of August 13, FCNR(B) deposits mobilised under the facility stood at $52.3 billion, while total inflows through the broader forex facilities were around $56.8 billion.
According to CareEdge, the scheme should primarily be seen as a measure aimed at strengthening banking-system liquidity and financial stability, rather than as a mechanism to drive a sharp appreciation in the rupee or significantly boost reported foreign exchange reserves. The ratings agency had earlier projected FCNR(B) mobilisation at $60-80 billion, noting that such inflows could provide banks with stable medium-term funding while easing pressure arising from credit growth outpacing deposit mobilisation.