Strong FCNR(B) Deposits May Drive Forex Inflows To USD 85 Bn: SBI Research

New Delhi, Jul 27 (KNN) India could receive Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits in the range of USD 65–70 billion by the end of the current scheme, with overall inflows estimated at USD 80–85 billion, according to an SBI Research report.

“Given the current trend we believe that total amount mobilized so far in 45 days has easily crossed the total amount mobilized in 2013 in 3 months! Overall, we believe, India may now receive FCNR (B) deposits in the range of USD 65-70 billion by the end of the scheme and overall USD 80-USD 85 bn,” the report noted, as cited by ANI.

Public Sector Banks Lead Mobilisation

Citing data from the Reserve Bank of India (RBI), the report said FCNR(B) deposits worth USD 17.41 billion were mobilised till July 17, 2026. Total inflows during the period stood at USD 20.72 billion, including USD 1.97 billion from Overseas Foreign Currency Borrowings (OFCBs) and USD 1.34 billion from External Commercial Borrowings (ECBs).

Public sector banks were identified as the primary drivers of the mobilisation.

Upward Revision in Estimates

SBI Research has revised its projection for total FCNR(B) deposits to USD 65–70 billion, up from an earlier estimate of USD 40–45 billion. The report added that inflows could have reached USD 26–28 billion by July 23 alone.

“We also believe that significant majority of existing FCNR deposits which are going to mature in Aug/ Sep'26 will be renewed under the new scheme (gravitated by higher interest rates) and will boost the FCNR (B) inflows,” the report noted.

Additional Inflows and Reserve Impact

The report estimated that an additional USD 10 billion could be mobilised, particularly from regions offering tax concessions. Foreign Currency Assets (FCA) increased by USD 7.6 billion between June 8 and July 17.

FCNR(B) flows accounted for about 44 per cent of the total deposit mobilisation during this period, suggesting a gradual conversion process by banks at the RBI.

Looking ahead, FCA inflows for the second half of July (July 17–31) are expected to reach USD 10–12 billion, potentially taking overall FCA growth to USD 17–20 billion by month-end, largely driven by FCNR(B) deposits.

(KNN Bureau)