GENERAL9 Sept 2026
FCNR(B) deposits: Who bears the currency risk? | Explained
The RBI's special swap facility has brought in over $127 billion through FCNR(B) deposits from non-resident Indians, far above the $50 billion target. The window closed on August 31. This gives banks cheap foreign-currency funding, but while the RBI covers currency risk on the principal, banks must handle dollar interest payments themselves. If the rupee weakens, those interest costs can rise.
Key Statutory Highlights
- The RBI's special swap facility drew more than $127 billion in FCNR(B) deposits against an initial target of about $50 billion.
- The RBI closed the window for fresh FCNR(B) deposits on August 31, 2026.
- The RBI's swap shields banks from currency risk on the principal, but banks must manage dollar interest payments themselves.
Actionable Advice for Taxpayers / Founders:If you are a non-resident Indian with or considering FCNR(B) deposits, ask your bank how the interest-payment currency risk is managed before maturity.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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