India’s recent foreign-currency deposit scheme was closed early after attracting over $56 billion, surpassing expectations and highlighting strong Gulf-region investments and long-term dollar savings.
India has closed an unusually successful foreign-currency deposit scheme early after attracting far more money than officials expected, with the Reserve Bank of India saying inflows had already reached about $56.85 billion by August 13, 2026. Of that total, $52.3 billion came through foreign currency non-resident bank deposits, a level that pushed the central bank to end the programme a month ahead of schedule. The mobilisation comfortably topped the original target range of $40 billion to $50 billion and marked one of the quickest fund-raising drives of its kind in India’s recent history.
Much of the money came from the Gulf. More than 70% of the new deposits are understood to have originated in the region, with the United Arab Emirates accounting for nearly half the funds raised, reflecting the scale of India’s expatriate community there. Banking data cited by Indian media showed some lenders offering dollar deposit rates of 6.5% to 7.5%, helped by the central bank’s decision to lift rate caps and provide hedging support through a special swap window.
The RBI’s latest drive built on earlier signs of strong demand. Livemint reported that foreign-currency non-resident deposits had already taken in nearly $32 billion within about 45 days, surpassing the $26 billion raised under a 2013 mobilisation scheme. Daily Excelsior said the central bank had collected $40.82 billion by July 31, of which FCNR(B) deposits made up $36.725 billion. Other inflows came from overseas foreign currency borrowings and external commercial borrowings.
The scheme’s structure helped explain its appeal. According to The Economic Times, deposits under the latest FCNR-B window carried a one-year lock-in, while banks were spared reserve requirements on the funds. Indian Express reported that banks had initially been expected to raise more than $50 billion by the time the window closed in September 2026. Economists and bankers said the programme was aimed mainly at dollar savings held abroad for the long term, a pool in which Gulf-based workers play a particularly large role, even though the region’s share of India’s wider remittance flows is smaller than its share of the deposit mobilisation.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
