Indian Banks Set Record in Foreign Currency Deposits
Published: September 3, 2026 – By Our Bureau
Mumbai – Indian banks have achieved a remarkable milestone by collecting an unprecedented $127.2 billion in foreign-currency deposits from Indians living abroad. This achievement comes under a special scheme launched by the Reserve Bank of India (RBI) aimed at boosting the nation’s foreign-exchange resources, especially during a time when the rupee is facing significant pressure.
The Foreign Currency Non-Resident (Bank) or FCNR(B) scheme was introduced in June to encourage overseas Indians to deposit their foreign currency. Due to a strong demand for this scheme, the RBI decided to close the deposit window on August 31, ahead of the originally intended deadline at the end of September.
By the end of August, India successfully drew in a total of $136.3 billion in foreign-currency inflows through these special initiatives. Most of these funds came from FCNR(B) deposits, while $5.26 billion was raised through overseas foreign-currency borrowings and an additional $3.89 billion came from external commercial borrowings.
The RBI initiated this move to bolster India’s external financial position and to stabilize the rupee, which has been affected by rising oil prices and uncertainties in the global economy. The influx of funds has also been beneficial in enhancing India’s foreign-exchange reserves, which have now reached approximately $729.33 billion.
However, this significant inflow brings its own challenges, particularly in managing monetary policy. Converting foreign currencies into rupees can lead to an increase in domestic liquidity. Therefore, the central bank must carefully regulate the surplus funds within the banking system.
This substantial fundraising effort underscores the crucial role of India’s diaspora in maintaining the stability of the nation’s foreign-exchange position and highlights their continuing financial impact.
