India/global | August 7, 2026
Reserve Bank of India Governor Sanjay Malhotra has said that the additional banking-system liquidity generated by recent Foreign Currency Non-Resident (Bank) deposit inflows is expected to be limited and temporary.
The clarification followed significant participation in the RBI-supported foreign-exchange swap facility. By July 31, the broader initiative had reportedly mobilized $40.816 billion, including approximately $36.725 billion through fresh FCNR(B) deposits. These accounts allow NRIs to place eligible foreign-currency deposits with Indian banks.
The governor’s comments concern the liquidity effect on India’s banking system. They do not signal the withdrawal of the facility and should not be interpreted as a guarantee of deposit rates, investment returns or currency outcomes. NRIs should independently examine maturity, withdrawal and bank-specific conditions before depositing funds.
