India has raised approximately USD 10 billion from NRI’s under the Reserve Bank of India’s special deposit programme since it was launched in June 2026, two people familiar with the matter told Reuters on 14 July. The RBI did not respond to a request for comment.
The USD 10 billion figure represents only a fraction of what the programme is designed to attract. Economists and bankers have estimated total inflows could reach between USD 30 billion and USD 60 billion before the window closes on 30 September 2026. The comparison point is the 2013 version of the same programme, when India raised approximately USD 34 billion during the taper tantrum crisis to stem the rupee’s decline at that time.
The urgency behind the drive has intensified in recent days. The rupee weakened past 96 per dollar on 14 July, putting it within less than 1% of its all-time low of 96.96 per dollar. Rising hostilities between the US and Iran have pushed Brent crude more than 20% above its recent lows, reviving concerns about India’s external finances. The Federal Reserve is expected to raise interest rates later this year, adding further pressure on the currency.
Finance Minister Nirmala Sitharaman met heads of state-run banks on Monday, 13 July, urging them to step up engagement with NRIs through outreach programmes, digital channels and innovative deposit products. RBI Governor Sanjay Malhotra is meeting private and state-run bank CEOs on Tuesday, 14 July, to map out a plan to boost overseas deposit inflows and resolve operational issues limiting mobilisation.
What the RBI’s deposit drive involves
The programme was announced at the RBI’s monetary policy meeting on 5 June 2026. Its core mechanism is a zero-cost foreign exchange swap facility for deposits raised from NRIs. Under the swap, the RBI absorbs the hedging cost that Indian banks would normally have to pay when converting foreign currency deposits into rupees for domestic deployment. This allows banks to offer significantly higher returns to NRI depositors than would otherwise be possible.
The RBI simultaneously removed interest rate ceilings on fresh FCNR(B) deposits of three to five year tenors and on NRE deposits of three years and above, effective 17 June 2026 until 30 September 2026. Banks raising deposits under the window are also exempt from Cash Reserve Ratio and Statutory Liquidity Ratio requirements on incremental deposits, further reducing the cost of the programme for lenders.
The result: banks are offering rates as high as 7.5% on USD FCNR(B) deposits under the programme, compared to the 3-4% range that prevailed before the window opened. Major private banks including HDFC Bank, ICICI Bank and Axis Bank are offering 6% on three-to-five year USD FCNR deposits. AU Small Finance Bank has gone to 7.10%.
What is an FCNR(B) deposit?
What is an FCNR(B) deposit?
A Foreign Currency Non-Resident (Bank) deposit is a fixed deposit held by NRIs, OCIs and PIOs in foreign currency at an Indian bank. Unlike NRE and NRO deposits, which are held in Indian rupees, an FCNR(B) deposit is opened, held and repaid in the same foreign currency, eliminating any exchange rate risk for the depositor. Interest earned is fully exempt from Indian income tax and is freely repatriable without any cap. Minimum tenor is one year, maximum five years. Available in USD, GBP, EUR, AUD, CAD and JPY, varying by bank. Under the RBI’s current special window, deposits booked between June and 30 September 2026 carry a one-year lock-in.
Where the money is coming from
Bankers with knowledge of the programme said early inflows have been particularly strong from NRIs in Singapore and Hong Kong, where there are large concentrations of Indian professionals with significant accumulated savings.
The Middle East, which was initially expected to be among the biggest pools of capital for the programme given the approximately 8 million Indians living in the Gulf, has been slower than anticipated. Middle Eastern and Japanese banks have faced constraints on country-specific risk limits, limiting the volume of trade finance structures that would enable leveraged participation in the programme.
The Finance Minister’s Monday meeting with state bank heads included a directive to make greater use of banking infrastructure at GIFT City, India’s tax haven in Gujarat, to mobilise overseas funds. GIFT City’s international banking framework allows Indian banks to conduct foreign currency business without several of the domestic regulatory constraints, potentially making it a more efficient channel for the deposit drive.
The leverage angle and what it means for NRI depositors
A June 23 RBI clarification allowed banks to lend against FCNR(B) deposits and place a lien against them. This opened the door to leveraged deposit structures, where an NRI depositor uses borrowed funds alongside their own to make a larger deposit, amplifying the effective return.
Some brokerage estimates circulating in financial markets have suggested that leveraged FCNR structures could generate annual returns of up to 27% for NRI depositors. These figures are illustrative and conditional. They assume full availability of leverage at rates that make the arbitrage work, regulatory clarity on the specific instruments involved, and banks willing to extend leverage to individual NRI depositors at the required scale.
Banks are still awaiting full RBI clarity on the use of Standby Letters of Credit in these structures. Until that clarity arrives, the headline leverage return figures remain aspirational rather than available to most NRI depositors. The straightforward return of 6 to 7.5% on a standard FCNR(B) deposit is what most NRIs can access today.
The June 23 clarification has also had a side effect: it raised the cost of borrowing dollars for Indian banks by 25 to 40 basis points, as lenders priced in the regulatory and operational complexity of leveraged structures. Higher funding costs reduce the returns banks can pass on to depositors, creating a tension in the programme’s design.
The rupee and why the timing matters
The rupee, which had rallied to nearly 94 per US dollar after the RBI’s measures, weakened past 96 on Tuesday. At around 96.14 per dollar, the currency is now less than 1% away from its all-time low of 96.96 per dollar.
The deposit drive is designed to address the structural pressure on India’s external finances. India runs a current account deficit, meaning it imports more than it exports. That deficit needs to be financed by capital inflows, including foreign direct investment, portfolio flows and NRI deposits. When oil prices rise, the deficit widens. When the Fed raises rates, capital flows to the US rather than emerging markets. Both pressures are active simultaneously right now.
NRI deposits are one of India’s most reliable sources of foreign capital. They are stickier than portfolio flows, which can exit quickly in response to market moves, and they carry no equity dilution unlike FDI. A programme that raises USD 30 to 60 billion from the diaspora would meaningfully narrow India’s expected balance of payments deficit for the current financial year.
What this means for NRIs right now
For NRIs in Australia, the UK, the UAE, the US, Canada and New Zealand with savings in foreign currency, the current window represents the highest USD FCNR rates available in years. The programme closes 30 September 2026. Deposits booked before that date at elevated rates retain those rates for the full tenor, subject to the one-year lock-in.
The action items are straightforward. If you hold foreign currency savings and are considering an FCNR deposit, the window is open and the rates are at a decade-high. Contact your Indian bank directly to confirm current rates, the lock-in conditions and any leverage options they are formally offering. Do not rely on the illustrative leverage returns circulating in financial media without confirming with your bank what is actually available.
What NRIs with savings abroad need to know right now
Has India officially confirmed the $10 billion figure?
No. The figure comes from two people familiar with the matter who spoke to Reuters on condition of anonymity. The RBI has not issued an official statement on inflows under the programme. The figure is the best available market estimate as of 14 July 2026.
What is the actual rate I can get on an FCNR deposit today?
Major banks including HDFC Bank, ICICI Bank and Axis Bank are offering 6% on three-to-five year USD FCNR deposits under the special window. AU Small Finance Bank has offered 7.10%. Rates vary by bank, tenor and deposit size. Check your bank’s official rate page before acting, as rates can change within the window period.
Can I still open an FCNR deposit after 30 September 2026?
Yes. FCNR deposits are a permanent product. After 30 September, the special rate ceiling removal ends and rates will revert to the standard framework, likely in the 3-4% range for USD deposits. The current elevated rates are only available for deposits booked before 30 September.
What is the one-year lock-in and does it apply to all deposits?
Deposits booked under the special window carry a one-year lock-in, meaning early withdrawal before 12 months results in no interest being paid. After 12 months, normal premature withdrawal provisions apply. The lock-in applies specifically to deposits booked under the June-September 2026 special window.
Is the leveraged FCNR structure available to individual NRI depositors?
Some banks are offering leveraged deposit structures. Availability and terms vary significantly. Banks are still awaiting full RBI regulatory clarity on specific instruments. Confirm with your bank whether leverage is formally available, on what terms, and what the actual net return would be after borrowing costs. Do not rely on brokerage estimates of 27% returns without direct bank confirmation.
