RBI Advances FCNR(B) Swap Facility Cut-Off to August 31 After Strong Inflows: What Banks Need to Track

What has changed

The Reserve Bank of India has brought forward the cut-off for banks to access its foreign-exchange swap facility linked to fresh FCNR(B) deposits, moving the eligible mobilisation date to 31 August 2026 from the earlier 30 September timeline. The change follows what RBI described as an encouraging response to the facility and the resulting foreign-exchange inflows.

The measure matters for bank treasury teams because the facility was designed to reduce hedging cost on eligible foreign-currency resources raised from overseas. With the FCNR(B) leg closing earlier, banks that planned to mobilise non-resident foreign-currency deposits under the scheme have a shorter execution window.

What the RBI facility covers

RBI's official FAQ describes the arrangement as a plain buy/sell foreign-exchange swap from the central bank's side covering the principal amount of eligible deposits, not the interest component. The broader package announced in June covered FCNR(B) deposits as well as specified external commercial borrowings and overseas foreign-currency borrowings.

For FCNR(B) deposits, the facility is tied to eligible fresh deposits mobilised by banks under the scheme conditions. Banks seeking to use the facility are required to make prescribed declarations confirming that the deposits have been mobilised in conformity with RBI's guidelines, and the facility is operationalised through RBI's Financial Markets Operations Department in Mumbai.

Why the August 31 date is important

RBI's decision does not simply change an administrative filing date. It effectively shortens the period during which banks can raise eligible FCNR(B) resources and access the concessional swap window attached to those funds. Treasury, ALM and international banking teams therefore need to align deposit mobilisation, documentation, internal approvals and swap scheduling before the revised cut-off.

Reuters reported that RBI had received more than $50 billion through the FCNR(B) channel by mid-August, with the central bank citing the strong response when announcing the earlier closure. The same report noted that the windows for specified external commercial borrowings and overseas foreign-currency borrowings were not being closed on the same August 31 date and would continue on their existing schedules.

Operational points for banks and finance teams

- Re-check which foreign-currency deposits qualify under RBI's FCNR(B) swap scheme and whether their mobilisation date falls within the revised eligibility window.

- Coordinate deposit mobilisation with treasury so the hedge can be scheduled within RBI's operational process.

- Maintain the prescribed declarations and supporting records showing that the deposits satisfy the scheme conditions.

- Separate the FCNR(B) deadline from the timelines applicable to the other overseas borrowing facilities covered by RBI's June package.

- Review liquidity, funding-cost and maturity assumptions that were built on the earlier September 30 FCNR(B) cut-off.

What it means for NRI deposit mobilisation

The underlying FCNR(B) product remains a foreign-currency deposit product for eligible non-residents, but the swap facility changes the economics for participating banks by providing a central-bank hedge on the principal under the prescribed terms. An earlier closure can therefore influence how aggressively banks seek such deposits in the remaining days of August and how they price or plan their overseas funding mix.

For chartered accountants working with banks, financial institutions or treasury functions, the main compliance point is to distinguish the deposit product itself from the temporary RBI swap support. The immediate deadline is attached to eligibility for the central-bank swap facility, not a blanket closure of FCNR(B) accounts.

With the revised cut-off now set at 31 August 2026, institutions using the facility should work from RBI's official circular and FAQ rather than older internal timelines that may still show 30 September. Any final transaction decision should be checked against the latest RBI operational communication and eligibility conditions.

Useful official links

View the official RBI swap facility FAQs

Key takeaway

The revised August 31 cut-off remains live and directly affects bank treasury planning, NRI deposit mobilisation and foreign-exchange hedging decisions.