New Delhi, Sept. 4 -- The Reserve Bank of India's decision to bear the hedging cost for banks mobilising fresh Foreign Currency Non-Resident (Bank), or FCNR(B), deposits has resulted in a significantly stronger response than the central bank's similar initiative in 2013, according to a Bank of Baroda Research report.

The RBI introduced the special swap facility in June 2026 to attract foreign currency inflows by allowing banks to swap fresh FCNR(B) deposits with the central bank, while the RBI bears the swap cost. The measure effectively removed the hedging cost burden for banks and made it more attractive for them to mobilise foreign currency deposits.

The response has been substantial. As of August 31, 2026, banks had mobilised USD 12...