MUMBAI, June 8 (Reuters) – The Reserve Bank of India announced a series of forex measures last week, including offering concessional swaps to encourage overseas fundraising by state-owned firms and foreign currency non-resident deposits.
The swap facility will be provided until September 30 to compensate banks for hedging costs on three- to five-year foreign currency non-resident deposits.
Here are the detailed guidelines published by the RBI on Monday.
o The RBI has allowed banks to mobilize deposits in any freely convertible currency
o Swap facility will be available in U.S. dollars only
o The swap facility comes into effect immediately and will remain open up to October 16, 2026 for deposits mobilized till September 30, 2026.
o Underlying deposits will have a lock in-period of 1 year.
o Swap facility with the RBI cannot be cancelled
o Banks may exclude the swap positions arising out of FCNR (B) deposits, External Commercial Borrowings while computing net open rupee position
o External commercial borrowings of average maturity of 3 years and above by public sector undertakings will be eligible for the RBI swap facility
o Swap will be undertaken at a fixed rate of 1.5% per annum compounded semi-annually
o Swap facility comes into effect from today and will remain open up to January 15, 2027 for eligible ECB drawdowns
(Reporting by Gopika Gopakumar; Editing by Anil D’Silva)
By Gopika Gopakumar
