Indian banks have mobilized $20.7 billion under the RBI's special FCNR incentive scheme, with foreign currency deposits emerging as the biggest source of inflows. The strong response could strengthen external liquidity and support India's balance of payments in the coming months.

Highlights:

• FCNR(B) deposits contributed $17.4 billion, accounting for the largest share of total foreign currency inflows.
• The RBI's incentive window has encouraged banks to step up efforts to attract NRI deposits across key overseas markets.

The Reserve Bank of India introduced the special incentive window on June 5, 2026, and operationalized it on June 8. The facility remains open for FCNR(B) deposits until September 30 and for OFCBs and ECBs until December 31, 2026.

Along with $17.4 billion raised through FCNR(B) deposits, banks mobilized $2 billion through overseas foreign currency borrowings and $1.3 billion through external commercial borrowings.

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FCNR Deposits Drive Foreign Currency Inflows

FCNR(B) deposits emerged as the biggest contributor under the RBI's scheme. The facility has attracted strong interest from banks looking to expand their foreign currency deposit base.

Among public sector lenders, State Bank of India mobilized about $1.9 billion under the scheme. Bank of Baroda followed with $273 million, while Canara Bank and Punjab National Bank raised $80 million each.

Private and mid-sized lenders are also building momentum. RBL Bank raised $150 million, South Indian Bank mobilized $50 million, and Central Bank of India secured $8.4 million through FCNR(B) deposits.

What Could This Mean

The strong inflows suggest the RBI's incentive scheme is helping banks tap overseas savings, especially from non-resident Indians. Several private lenders believe the opportunity could grow further as partnerships and funding channels expand.

Banks including ICICI Bank, Axis Bank, Kotak Mahindra Bank, and Federal Bank said they are seeing encouraging interest from NRIs. Most lenders expect demand to remain strongest in the Middle East, followed by Singapore and Hong Kong.

If the momentum continues, the scheme could improve foreign currency liquidity for banks while supporting India's external financing position. The coming quarters will indicate whether banks can sustain inflows before the RBI's special window closes.