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RBI Deputy Governor Rohit Jain: Banks to Deploy $133 Billion FCNR(B) Liquidity as Credit Demand Rises
Reserve Bank: RBI Deputy Governor Rohit Jain said that banks will deploy additional liquidity from FCNR(B) deposits amid strong credit demand during the festive season. He also discussed foreign exchange reserves, tokenization, and technology risks in banking.
The Deputy Governor of the Reserve Bank of India, Rohit Jain, mentioned on September 24, 2026, that banks will use the surplus liquidity they obtain through foreign currency non-resident deposits (FCNR-B) within the coming months. Credit demand is anticipated to continue its rise during the festive season, he said. The banks had increased US$133 billion through the FCNR-B deposit scheme.
The closing date of the scheme was set for August 31, one month earlier than planned due to a good response of Indians living abroad. Jain addressed to the media during the 13th SBI Banking and Economics Conference. Jain mentioned that the RBI had discussed the liquidity situation of banks. However, the RBI's Deputy Governor made it clear that the RBI does not instruct the banks regarding where to utilize their funds. Banks will have full freedom in deploying FCNR(B) liquidity based on their loan pipeline, proposals, and liquidity scenario.
The RBI's special INR-US dollar foreign currency swap facility was introduced on June 8, 2026, for the purpose of FCNR(B), foreign currency borrowing (OFCBs) and external commercial borrowings (ECBs). While the FCNR(B) scheme expired on August 31, the ECB and OFCB window will be operational till December 31, 2026. According to the data provided by the authorized dealers' banks as of September 18, total flows through FCNR(B), ECBs, and OFCBs amount to US$143.596 billion. Now India is the fifth largest country in terms of foreign exchange reserves in the world.
