India attracts nearly $10 billion through RBI deposit scheme to strengthen rupee

Tuesday 14 July 2026 - 12:00

By: Sahili Aya

India attracts nearly $10 billion through RBI deposit scheme to strengthen rupee

India has secured nearly $10 billion in foreign currency inflows through a special deposit programme launched by the Reserve Bank of India (RBI), as authorities seek to reinforce foreign exchange reserves and support the stability of the Indian rupee, according to sources familiar with the matter.

The initiative, designed to attract funds from overseas Indians, has gained momentum following clarifications from the central bank regarding certain market-related concerns. The move is part of broader efforts to strengthen India’s external financial position amid global currency pressures and elevated borrowing costs.

Special programme encourages overseas deposits

The RBI introduced a zero-cost foreign exchange swap facility during its June policy meeting, allowing banks to offer more attractive returns on deposits made by non-resident Indians (NRIs).

The mechanism aims to increase foreign currency availability within the banking system while limiting additional costs for participating financial institutions. By encouraging overseas Indians to place funds with Indian banks, policymakers hope to create stronger support for the country’s foreign exchange market.

Banking sources said that inflows through the programme reached around $10 billion, although economists believe the initiative could attract significantly more capital over time. Some analysts estimate that total inflows could potentially reach between $30 billion and $50 billion if the scheme continues to gain traction.

Challenges remain for banks

Despite the early success, financial institutions have highlighted several practical challenges linked to the programme. Among the concerns are higher costs associated with raising dollars internationally and taxation issues affecting overseas depositors.

Banks are also assessing how global interest rate conditions and currency market movements could influence demand for the scheme in the coming months.

Supporting the rupee amid global uncertainty

The initiative comes as emerging market currencies continue to face pressure from international financial conditions, including shifts in global interest rates and movements in the U.S. dollar.

For India, maintaining adequate foreign exchange reserves remains a key priority to help manage external risks and limit excessive volatility in the rupee.

The government and the RBI have increasingly focused on measures that strengthen financial resilience while ensuring sufficient liquidity in foreign currency markets.

With billions of dollars already flowing into the programme, the deposit initiative has emerged as an important tool in India’s efforts to reinforce currency stability and attract overseas capital.