India’s FCNR (B) Inflows May Reach USD 85 Billion: SBI Research

SBI Research has raised its projection for foreign currency inflows into India after a strong mobilisation of Foreign Currency Non-Resident (Bank), or FCNR(B), deposits during the initial phase of the scheme.

According to the report, FCNR(B) deposits could reach USD 65–70 billion by the conclusion of the scheme, significantly higher than the earlier estimate of USD 40–45 billion. When combined with other foreign currency borrowing channels, India’s overall inflows are projected to be in the range of USD 80–85 billion.

The report indicated that the amount mobilised within the first 45 days had already exceeded the funds raised during the comparable three-month initiative conducted in 2013. Public sector banks were identified as the principal contributors to the recent mobilisation.

Reserve Bank of India data cited in the report showed that FCNR(B) deposits amounted to USD 17.41 billion as of July 17, 2026. Total foreign currency inflows stood at USD 20.72 billion, comprising:

• USD 17.41 billion through FCNR(B) deposits
• USD 1.97 billion through Overseas Foreign Currency Borrowings
• USD 1.34 billion through External Commercial Borrowings

SBI Research estimated that cumulative FCNR deposits may have increased to approximately USD 26–28 billion by July 23, 2026.

The report also expects a substantial proportion of existing FCNR deposits maturing during August and September 2026 to be renewed under the new scheme. Higher interest rates are likely to encourage depositors to roll over these funds, further supporting overall inflows.

Additionally, SBI Research estimated that at least USD 10 billion above the baseline projection could be mobilised from jurisdictions offering favourable tax treatment.

India’s Foreign Currency Assets increased by USD 7.6 billion between June 8 and July 17. During the same period, FCNR(B) deposit mobilisation reached approximately USD 17.4 billion. SBI Research said this difference could indicate that banks were converting the mobilised funds with the RBI in phases, with the reported increase in foreign currency assets representing about 44% of the deposit inflows.

Based on prevailing trends, the report expects Foreign Currency Assets to increase by another USD 10–12 billion during the 15-day period ending July 31, 2026. CA Sansaar