NEW DELHI, June 8 — The Reserve Bank of India (RBI) has announced two special U.S. dollar-rupee foreign exchange swap facilities aimed at attracting foreign currency inflows and supporting external financing.
The measures, which follow RBI Governor Sanjay Malhotra’s monetary policy announcement on June 5, include one facility for fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits and another for eligible External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs).
In a circular regarding FCNR(B) deposits, the RBI said it had decided to introduce a U.S. dollar-rupee forex swap facility for fresh FCNR(B) deposits mobilized for a minimum tenor of three years and a maximum tenor of five years.
Under the scheme, Authorized Dealer (AD) Category-I banks will be able to access the swap facility for fresh FCNR(B) deposits raised in any freely convertible currency. However, the swap transaction with the RBI will be conducted only in U.S. dollars. The tenor of the swap will match the tenor of the underlying deposit and range between three and five years.
“The swap will be undertaken at par,” the RBI said, allowing banks to sell U.S. dollars to the central bank and simultaneously agree to buy back the same amount at the end of the swap period.
The FCNR(B) swap facility took effect immediately and will remain available until Oct. 16, 2026, for deposits mobilized through Sept. 30, 2026.
In a separate circular, the RBI announced a forex swap facility for eligible ECBs raised by public sector undertakings and OFCBs raised by banks.
“It has been decided to introduce a U.S. dollar-rupee forex swap facility for (a) External Commercial Borrowings (ECBs) of average maturity of three years and above,” the RBI said, adding that the facility will also cover “(b) Overseas Foreign Currency Borrowings (OFCBs) raised by Authorized Dealer Category-I banks for a minimum maturity of three years.”
According to the central bank, the swap facility will be available for eligible ECBs and OFCBs raised in any currency, although the swap transaction with the RBI will be conducted exclusively in U.S. dollars.
The maximum swap tenor will align with the repayment schedule or maturity of the borrowing, subject to a cap of five years.
The RBI said the facility will operate daily on working days, allowing banks to swap an amount equivalent to eligible ECB or OFCB inflows received during the preceding week.
The swaps will be conducted at a fixed rate of 1.5% per annum, compounded semiannually.
The ECB/OFCB swap facility will remain open until Jan. 15, 2027, for eligible ECB drawdowns and OFCB inflows received through Dec. 31, 2026.
The RBI said the twin facilities are intended to encourage foreign currency inflows, improve hedging options for banks and borrowers, and strengthen India’s external sector buffers amid evolving global financial conditions.
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