Nirmala Sitharaman Reviews Foreign Currency Deposit Drive with Banks

The RBI Deputy Governor assured participants that the central bank continues to support banks and financial institutions in mobilising deposits and facilitating eligible borrowings.

Union Finance Minister Nirmala Sitharaman has reviewed the progress of the Reserve Bank of India's foreign currency mobilisation initiatives, with public sector banks and financial institutions reporting encouraging participation from non-resident Indians (NRIs) and overseas investors.

At a meeting in New Delhi, the Finance Minister interacted with Managing Directors and Chief Executive Officers of Public Sector Banks (PSBs) and Public Financial Institutions (PFIs) to assess the implementation of the RBI's swap facilities covering Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs).

Senior officials from the Department of Financial Services, Department of Economic Affairs, Department of Revenue, the Reserve Bank of India and the Chief Economic Advisor also participated in the discussions. Bank executives informed the Minister that the schemes have generated a positive response, particularly from the Indian diaspora, with growing interest across all three funding channels.

Strong NRI interest drives momentum across overseas markets

According to the participating banks, FCNR(B) deposits have gained traction as institutions offer competitive returns, including on five-year deposits, following the RBI's decision to suspend the interest rate ceiling on fresh deposits under the scheme. Banks reported strong interest from NRIs living in Singapore, Hong Kong, West Asia, the United Kingdom, the United States, and several other international markets. They also said deposit mobilisation has accelerated steadily as awareness of the scheme has increased.

To build on the momentum, banks have introduced customised outreach campaigns using digital platforms and targeted engagement with overseas Indian communities. Executives expressed confidence that External Commercial Borrowings would gather stronger momentum during the third quarter of the 2026-27 financial year, between October and December.

The meeting also highlighted the growing role of International Banking Units (IBUs) at GIFT City in Gujarat. Banks said these units are helping mobilise funds from multiple international financial centres, including the UK, US, West Asia, Hong Kong, Singapore and Southeast Asia.

Government urges banks to sustain mobilisation efforts

Finance Minister Sitharaman welcomed the encouraging initial response and urged banks to further strengthen engagement with the NRI community by introducing innovative deposit products and maintaining the pace of mobilisation during the remaining period of the schemes. She also encouraged banks to make greater use of the financial infrastructure available at GIFT City, describing it as an important platform for expanding India's international financial services ecosystem.

The RBI Deputy Governor assured participants that the central bank continues to support banks and financial institutions in mobilising deposits and facilitating eligible borrowings. Officials also noted that the RBI's daily reporting framework is enabling real-time monitoring of progress across participating institutions.

The foreign currency swap facilities, announced by the RBI Governor in the Monetary Policy Statement on 5 June 2026, are designed to attract overseas capital, strengthen India's balance of payments and reinforce foreign exchange reserves amid global economic uncertainty. Under the current framework, FCNR(B) deposits remain eligible until 30 September 2026, while ECBs and OFCBs are covered until 31 December 2026.