New Delhi, June 12: The Reserve Bank of India’s recent measures to boost foreign currency inflows are expected to strengthen the country’s foreign exchange reserves, improve banking system liquidity and support the rupee, with total inflows estimated at $40–50 billion in FY27, according to a report citing an analysis by Motilal Oswal Financial Services Ltd (MOFSL).
MOFSL’s analysis says banks could see borrowing costs fall by about 200–250 basis points via the external commercial borrowing (ECB) route under the RBI’s concessional swap framework. Lower funding costs are likely to support credit growth, bolster lending activity and improve funding efficiency across the banking sector.
The report notes the initiative mirrors a 2013 RBI programme that drew nearly $27 billion in FCNR(B) deposits and roughly $34 billion in total NRI deposits, which helped build forex reserves and stabilise the currency market at the time.
FCNR(B) deposits now make up only about 1.2% of the banking system’s total deposits, suggesting significant headroom for expansion. Banks have already begun raising FCNR(B) deposit rates across key maturities to make these products more attractive to non-resident Indian customers.
MOFSL said banks with strong customer franchises and established overseas networks are best positioned to capture a larger share of expected inflows, and that the current framework offers benefits to both depositors and banks, encouraging wider participation.
Stronger foreign currency inflows, improved liquidity and higher reserve buffers could underpin currency stability and boost investor confidence. MOFSL estimated the rupee could strengthen towards the 93–94 range against the US dollar in the near term as inflows pick up.
FCNR(B)-linked funding also gives banks a spread advantage of about 60–65 basis points over traditional wholesale deposits because these funds are exempt from Cash Reserve Ratio and Statutory Liquidity Ratio requirements. The central bank has recently introduced special facilities for FCNR(B) deposits and ECBs to allow banks to raise overseas funds at lower costs. IANS.
Original Source: https://theshillongtimes.com/2026/06/12/india-may-see-up-to-50-billion-forex-inflows-in-fy27-under-rbis-latest-measures-report/
Category: Economy,NATIONAL,News Alert
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Publish Date: 2026-06-12 14:53:00
