The Reserve Bank of India’s (RBI) special scheme to increase foreign exchange reserves and accelerate dollar inflows into the country is proving to be a resounding success. Under this facility, which began in June 2026, foreign exchange worth $4,081.6 million has already entered the country in just two months, i.e., by July 31. FCNR (B) deposits by Non-Resident Indians (NRIs) have contributed the most to this remarkable achievement. This move is not only strengthening India’s foreign exchange reserves, but also providing a strong cushion to the Indian rupee and the overall economy amid global uncertainties.
Where did most of the foreign currency come from?
According to RBI data, foreign exchange has been raised under this special scheme mainly from three major financial sources:
- FCNR (B) deposits: The largest contributor to the scheme is the “Foreign Currency Non-Resident (Bank)” deposits, which alone have raised $367.25 million .
- OFCB (Overseas Foreign Currency Borrowings): Through this, $257.5 million has been brought into the country by banks.
- ECB (External Commercial Borrowings): Investment of $151.6 million has been received through external commercial borrowings .
Combining these three major sources, a total of $408.16 crore of foreign exchange has come into India’s financial system, which reflects the strong economic position of the country.
When did the scheme start and how long will the facility last?
The Reserve Bank of India announced this scheme on June 5, 2026 , and it was implemented with effect from June 8, 2026. The main objective of this initiative was to encourage commercial banks in the country to attract and mobilize more foreign exchange from abroad.
- Deadline: This concessional swap facility on new FCNR(B) deposits with banks will remain open until September 30, 2026. For OFCBs and ECBs, this special exemption will continue until December 31, 2026 .
What impact will this have on the common people and the economy?
A strong foreign exchange reserve in the country provides several direct and indirect benefits to the economy:
- The Indian Rupee enjoys better stability and strength in the international currency market.
- It facilitates payment for imports, especially crude oil and other essential energy resources.
- The Indian economy feels more secure amid global geopolitical and economic turmoil.
- Global investors’ confidence in India’s financial markets increases and the country’s financial stability is strengthened.
What is FCNR(B) account and what are its rules?
The key rules related to FCNR(B) account, which plays a vital role in raising foreign exchange, are as follows:
- Who can open one? Foreign Currency Non-Resident (Bank) Account can be opened only by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs).
- What currency are transactions conducted in? This account does not accept Indian Rupees; it only accepts foreign currencies (such as the US Dollar, British Pound, Euro, etc.).
- What are the tax rules? The principal amount and interest earned in an FCNR(B) account are not subject to any income tax in India.
- Facility to transfer money abroad: The entire amount deposited in this account (including principal and interest) can be easily transferred back abroad in foreign currency.