FM asks banks to step up NRI outreach as RBI forex swap schemes gain pace | Economy & Policy News
 "Nirmala Sitharaman, Nirmala")
Finance Minister Nirmala Sitharaman | (Photo:PTI)
Finance Minister Nirmala Sitharaman on Monday asked banks to intensify outreach to non-resident Indians (NRIs) and introduce innovative deposit products as the Reserve Bank of India’s (RBI’s) foreign currency mobilisation schemes witnessed an encouraging initial response.
The direction came after Sitharaman reviewed the progress of the RBI’s swap facilities for Foreign Currency Non-Resident (Bank), or FCNR(B), deposits — foreign currency-denominated fixed deposits that NRIs can maintain with Indian banks — along with external commercial borrowings (ECBs), which are overseas loans raised by eligible Indian companies, and overseas foreign currency borrowings (OFCBs) by financial institutions.
According to the finance ministry, managing directors and chief executives of public sector banks (PSBs) and public financial institutions informed the finance minister that the schemes have generated strong interest among the Indian diaspora, with banks witnessing healthy demand for FCNR(B) deposits, ECBs and OFCBs. They said banks are offering attractive returns on FCNR(B) deposits, including five-year deposits, aided by the RBI’s decision to suspend the interest rate ceiling on fresh deposits mobilised under the scheme.
Banks reported significant interest from NRIs based in Singapore, Hong Kong, West Asia, the United Kingdom and the United States. Lenders said they have put in place customised digital outreach strategies to accelerate deposit mobilisation during the remaining tenure of the schemes.
Public sector banks also indicated that mobilisation through ECBs is expected to gather pace in the third quarter of 2026-27, while FCNR(B) deposit mobilisation has shown an accelerating trend. They added that International Banking Units (IBUs) operating from the International Financial Services Centre (IFSC) at GIFT City are being used to raise funds from multiple overseas jurisdictions.
During the meeting, Sitharaman urged banks to maximise the use of GIFT City’s financial infrastructure, expand engagement with the NRI community and sustain the momentum of foreign currency mobilisation. The RBI deputy governor assured banks of the central bank’s continued support and highlighted that a daily reporting framework is enabling real-time monitoring of the schemes’ progress.
The finance ministry said the broad-based participation of public and private sector banks and financial institutions would help mobilise foreign currency inflows, bolster India’s foreign exchange reserves and strengthen the country’s external sector at a time of global uncertainty.
The RBI had announced the special swap facilities in its June 5 monetary policy. The package includes a dollar-rupee foreign exchange swap facility at par for fresh FCNR(B) deposits and concessional swap facilities for eligible ECBs and OFCBs to encourage overseas capital inflows and support the balance of payments. The FCNR(B) window will remain open until September 30, 2026, while the ECB and OFCB facilities are available until December 31, 2026.
First Published: Jul 13 2026 | 7:03 PM IST
