The Reserve Bank of India (RBI) on June 23, 2026, issued the FAQs related to the Swap Facility for FCNR (B) deposits, External Commercial Borrowings, and Overseas Foreign Currency Borrowings.
The following has been stated:
• It has clarified that banks can extend loans to non-residents and issue Standby Letters of Credit (SBLCs) against FCNR(B) deposits mobilized under the June 8, 2026, swap facility. Banks may also provide loans directly to FCNR(B) account holders and mark a lien on such deposits.
• RBI’s forex swap facility covers only the principal amount of eligible FCNR(B) deposits and not the interest component. Banks can avail the swap facility even if the residual maturity of a deposit is less than three years, provided the original deposit tenor was at least three years. Banks are permitted to offer differential interest rates on FCNR(B) deposits based on deposit size and tenure in accordance with RBI guidelines. They may also continue offering regular FCNR(B) deposits with tenures of 3–5 years without availing the swap facility, subject to maintaining separate records.
• The FAQs further clarify that ECBs with an average maturity of three years or more are eligible under the scheme, with the RBI swap tenor aligned to the ECB repayment schedule, subject to a maximum of five years.
• RBI has also made available application-cum-declaration forms and operational guidelines for availing the swap facility on its website.
