FCNR(B) scheme closure brings $127 billion in foreign inflows to Indian banks

India's Foreign Currency Non-Resident (Bank) scheme closed on August 31 after attracting $127.2 billion in foreign currency non-resident deposits during its final ten days. Brokerages estimated this specific window would generate at least $85 billion, but the actual inflows far exceeded expectations, nearly doubling the daily flow from earlier periods. These deposits accounted for over 93% of total dollar inflows through such special schemes since their launch in June. The Reserve Bank of India had initially announced an extension to accommodate these strong flows before setting August 31 as the final deadline. Provisional data released by the central bank confirms that foreign currency non-resident accounts drove the majority of the volume, with banks adding the most to the total pile. The aggregate inflow from all special schemes, including FCNR(B), now stands at $136.4 billion. Analysts suggest this massive injection will boost India's balance of payments surplus and support loan growth momentum for domestic financial institutions. The specific scheme remains closed, but a swap program involving eligible overseas borrowings has been extended until December 31, 2026.