The Reserve Bank of India’s twin forex swap facilities, announced to shore up reserves and stabilise the rupee, are set to inject meaningful relief into the banking sector’s deposit mobilisation and liquidity profile over the coming quarters.
Under the new window, operational between June 8 and September 30, 2026, banks can raise FCNR(B) deposits with tenors of 3-5 years and swap the proceeds into rupees at zero hedging cost, with these deposits also exempt from CRR and SLR requirements. This is a marked improvement over the 2013 scheme, where the RBI charged a 3.5% hedging fee. Banks have responded swiftly, raising FCNR(B) rates by 200-300 basis points to 6-7%, passing on the hedging benefit to depositors.
