Indian state-run banks estimate $30B inflow from overseas deposit scheme

India’s state-run banks are projecting roughly $30 billion in deposits from a special scheme aimed at luring foreign currency from the country’s massive diaspora. The Reserve Bank of India launched the initiative on June 8, 2026, and by mid-July, nearly $10 billion had already flowed in.

How the scheme works

The program centers on Foreign Currency Non-Resident (Bank) deposits, known in central banking shorthand as FCNR(B). It lets Non-Resident Indians and Persons of Indian Origin park their foreign currency in Indian banks for terms of three to five years. The RBI is offering banks a concessional USD-INR forex swap facility to hedge their principal exposure, which lets banks offer rates up to 7% without taking on enormous currency risk themselves. The scheme runs until September 30, 2026.

Punjab National Bank projects total sector inflows could land between $35 billion and $40 billion. Indian Bank and Canara Bank are more conservative, pegging their estimates at $20 billion to $25 billion. Federal Bank sits at about $30 billion. Some independent analysts are floating figures as high as $50 billion to $70 billion under favorable conditions.

Why India needs the cash

The RBI ran a similar scheme back in 2013, when the rupee was under severe pressure. That intervention mobilized approximately $34 billion in FCNR inflows. In the most recent fiscal year (FY26), net FCNR(B) inflows had cratered by roughly 86%, falling to just $946 million, making it clear that competitive incentives were necessary to move the needle.

What this means for investors

Public sector banks stand to benefit most from a multi-billion-dollar injection of foreign currency deposits, strengthening their funding base and improving liquidity metrics. Every dollar that flows in under FCNR(B) adds to India’s foreign exchange buffer, giving the RBI more room to intervene in currency markets if the rupee comes under pressure.

These deposits come with maturity dates. When the three-to-five-year terms expire, India will face outflows unless depositors roll over. The 2013 scheme’s maturity cliff caused turbulence when those deposits came due.