Non-resident Indians (NRIs) deposited a record $127.2 billion into Indian banks through the foreign currency non-resident (FCNR) deposit scheme by August 31, the Reserve Bank of India (RBI) said. The dollar swap facility supporting these deposits reached a total of $136.4 billion, with FCNR-B deposits forming the majority, according to livemint.com.
The RBI announced the FCNR deposit incentive scheme on June 5 and launched it three days later. The scheme allowed NRIs to make leveraged deposits in foreign currency, running until the end of August. This initiative aimed to attract dollar inflows and bolster the Indian rupee amid global currency volatility, as detailed by livemint.com.
The $127.2 billion inflow under this scheme is nearly five times the amount recorded during a similar program in 2013. This substantial increase highlights the growing confidence of overseas Indians in the Indian banking system and the rupee. The RBI’s dollar swap facility, which supports these deposits, plays a key role in managing currency stability and liquidity in the market, according to livemint.com.
The RBI’s data shows that the FCNR window attracted the bulk of the $136.4 billion total dollar swap facility inflows by August 31. This record inflow underlines the success of the RBI’s strategy to draw foreign currency deposits and support the rupee’s stability during the period the scheme was active.