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Swap Facility for FCNR (B) Deposits, ECBs and OFCBs

Reserve Bank of India (RBI) has introduced US Dollar-Rupee swap facility for Foreign Currency Non-Resident (Bank) [FCNR (B)] deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs).

Swap facility for FCNR (B) deposits Swap facility for ECBs and OFCBs
The swap facility has been introduced for fresh FCNR (B) deposits, including deposits that are renewed upon maturity, for a minimum tenor of 3 years and a maximum tenor of 5 years. The swap facility has been introduced for –
  • ECBs of average maturity of 3 years and above, drawn on after June 8, 2026 till December 31, 2026 by – (a) Public Sector Undertakings (PSUs) whose majority ownership is held by the central and / or state government (other than banks), or (b) PSUs which are incorporated, established or registered under a Central or State Act and controlled by the central / state government. The facility will also be available for the undrawn portion of any existing ECB but will not be available for borrowings with embedded options, or ECBs raised for refinancing / repayment of existing ECBs.
  • OFCBs raised by Authorised Dealer (AD) Category-I banks for a minimum tenor of 3 years.
The swap facility will be available to the AD Category-I banks for FCNR (B) deposits mobilized in any freely convertible currency. The swap facility will be available for –
  • Eligible ECBs raised in any currency by PSUs through their AD Category-I banks.
  • Eligible OFCBs raised in any currency by AD Category-I banks.
The swap facility with the RBI will be available in US Dollars only.
The tenor of the swap will be in alignment with the tenor of the underlying deposits. The tenor of the swap will be coterminous with the repayment schedule / maturity of the ECB / OFCB, subject to a maximum of 5 years.
During any week, the maximum amount of US Dollars that a bank would be eligible to swap with the RBI would be equal to all eligible FCNR (B) deposits mobilized in equivalent US Dollar terms during the preceding weeks. During any week, the maximum amount of US Dollars that a bank would be eligible to swap with the RBI would be equal to the eligible ECB / OFCB inflows raised in equivalent US Dollar terms during the preceding weeks.
Under the swap arrangement, a bank can sell US Dollars to the RBI in multiples of USD 1 million and simultaneously agree to buy the same amount of US Dollars at the end of the swap period.
In the first leg of the transaction, the bank will sell US Dollars to the RBI at Financial Benchmarks India Private Limited (FBIL) Reference Rate. The settlement of the first leg of the swap will take place on spot basis.
The swap will be undertaken at par.
The second leg of the swap will take place at the same rate as the first leg. 		The swap will be undertaken at a fixed rate of 1.5% per annum compounded semi-annually.
In the reverse leg of the swap transaction, Rupee funds will have to be returned to the RBI along with the swap premium to obtain the US Dollars back.
The underlying deposits will have a lock-in period of 1 year. The banks may, at their discretion, allow premature withdrawal of such deposits after 1 year. However, swaps undertaken with the RBI cannot be cancelled.

 
For FCNR (B) deposits mobilized in permissible foreign currencies other than US Dollars, banks may arrive at the equivalent US Dollar amount eligible to be swapped by converting the same at the prevailing market rates on the day of the swap deal.

 
The swap facility will remain open until October 16, 2026 for deposits mobilized between June 8, 2026 and September 30, 2026. The swap facility will remain open until January 15, 2027 for eligible ECB drawdowns made and OFCB flows received up to December 31, 2026.
The swap facility will be operationalised by the Financial Markets Operations Department of the RBI at Mumbai, which will announce a schedule for banks to avail the facility.
Banks are not required to enter into any International Swaps and Derivatives Association (ISDA) Agreement with the RBI.

What are the directions on net open positions involving Rupee (NOP-INR)?

  • ADs shall ensure that their NOP-INR positions in the onshore deliverable market are maintained within USD 100 million at the end of each business day. 
  • AD Category-I banks may exclude the swap positions arising out of FCNR (B) deposits, ECBs and OFCBs raised in terms of the above guidelines while ensuring compliance with NOP-INR position limits.


References

Reserve Bank of India. (2026, June 08). 'NOP-INR position of Authorised Dealer Category-I banks'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13470&Mode=0

Reserve Bank of India. (2026, March 27). 'NOP-INR position of Authorised Dealers'. Retrieved from https://rbi.org.in/Scripts/NotificationUser.aspx?Id=13344&Mode=0

Reserve Bank of India. (2026, June 08). 'Swap Facility for External Commercial Borrowings and Overseas Foreign Currency Borrowings'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13469&Mode=0

Reserve Bank of India. (2026, June 08). 'Swap Facility for FCNR (B) Deposits'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13468&Mode=0


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