FCNR(B) Swap Window Closed Early by RBI: How It Worked
Why in the news
The scheme was wound up ahead of time, shortly after the Governor ruled out such a step.
FCNR(B) deposit
- Foreign Currency Non-Resident (Bank) deposit: a term deposit in foreign currency by an NRI with an Indian bank.
- Principal and interest come in the same currency, so there is no rupee conversion risk for the depositor.
How the swap worked
- The bank collects dollars from NRIs.
- It sells them to RBI for rupees.
- At maturity the deal reverses at the same rate.
RBI absorbs the hedging cost, which lets banks pay attractive rates to depositors.
Exam angle
- Cost bearer: RBI.
- Launch: 8 June 2026.