The Reserve Bank of India has brought forward the deadline for its special FCNR(B) swap facility from September 30 to August 31, 2026. For NRIs considering an FCNR(B) deposit, this gives them less time to take advantage of the facility and the attractive rates currently being offered by banks. The move comes after strong inflows through the scheme, with FCNR(B) deposits crossing $52.3 billion by August 13. Here’s what the revised deadline means for NRIs, what happens to existing deposits, and what you should check before August 31. 

Why Did RBI Advance the FCNR(B) Deadline?

The short answer: the scheme worked faster than RBI expected. The special USD-INR forex swap facility covering FCNR(B) deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs) was launched on June 8, 2026, to pull foreign currency into the Indian banking system. Banks and NRI depositors responded far more aggressively than anticipated.

By August 13, 2026, FCNR(B) deposits mobilised under the facility had crossed $52.3 billion, and total inflows across all three channels FCNR(B), ECBs, and OFCBs stood at roughly $56.85 billion. FCNR(B) deposits alone accounted for well over 90% of that figure. To put the pace in perspective: inflows were around $20.7 billion in mid-July and had already crossed $40.8 billion by end-July, meaning the numbers nearly doubled again within the first two weeks of August.

RBI’s own stated reason for the early closure was straightforward an “encouraging response” to the facility and the resulting forex inflows. With the scheme comfortably exceeding earlier projections, the central bank decided there was no need to keep the mobilisation window open for the full original term.

RBI’s Position Shifted Quickly

What makes this a genuinely fresh development not old news repackaged is how fast the stance changed. On August 5, 2026, RBI Governor Sanjay Malhotra had told reporters at the monetary policy press conference that there was “no proposal under consideration” to close the scheme early, and that the central bank would keep depositors updated. Nine days later, on August 14, RBI announced the very closure it had downplayed the week before — a sign of just how sharply inflows accelerated in that short window.

What Does the New FCNR(B) Deadline Mean for NRIs?

Here’s the practical breakdown, without the jargon:

• After August 31, 2026, any new FCNR(B) deposit will not qualify for the special concessional swap facility. The scheme itself effectively closes to fresh mobilisation.
• Deposits you’ve already opened under the facility are not affected; they don’t get cancelled or altered by this change.
• This deadline is specifically about eligibility for the special swap facility. It doesn’t mean FCNR(B) deposits stop existing after August 31 banks can still offer FCNR(B) accounts, just without the extra RBI-backed swap benefit that has helped fund attractive rates.
• Don’t make your decision based purely on the deadline. Tenure, the currency you’re depositing in, the bank’s specific rate card, and repatriation terms all matter just as much as timing.

What Should NRIs Do Before August 31?

If you’re considering an FCNR(B) deposit, here’s what actually needs checking before you commit.

Check Current FCNR(B) Interest Rates

Rates have been attractive precisely because RBI has been absorbing the hedging cost under this facility, which let banks pass on better returns to depositors. Compare what your bank is currently offering across major currencies (USD, GBP, EUR, AUD) before you lock in rates can vary meaningfully between banks even for the same tenure.

Compare 3-Year vs 5-Year FCNR(B) Deposits

The special facility applies specifically to deposits with a three-to-five-year maturity. A longer tenure typically locks in the current rate for longer, which matters if you expect rates to fall later — but it also reduces your flexibility if you need the funds sooner.

Check Repatriation and Premature Withdrawal Rules

FCNR(B) deposits are fully repatriable, principal and interest, but premature withdrawal usually comes with a penalty and can affect the interest you actually earn. Confirm your bank’s specific terms before you deposit, not after.

Confirm the Bank’s Cut-Off Date

This is the detail that trips people up most. RBI’s August 31 deadline is when the deposit needs to be mobilised but individual banks often set their own internal cut-offs a few days earlier to leave time for KYC processing, fund transfers, and paperwork. Call your bank directly and ask for their specific last date to accept FCNR(B) applications under this facility. Don’t assume you have until August 31 itself.

What Happens to FCNR(B) Deposits After August 31?

A few things stay constant regardless of the deadline:

• Existing deposits: Continue exactly as agreed  no changes to your contracted rate or tenure.
• Interest: Accrues normally until maturity, at the rate locked in when you opened the deposit.
• Repatriation: Remains fully available, as it always has been for FCNR(B) accounts.
• New deposits after the deadline: Banks can still open FCNR(B) accounts, but these won’t carry the RBI swap-facility backing so future rates may not be as competitive once banks stop receiving that support.

Worth noting separately: this change applies only to the FCNR(B) leg of the facility. The ECB and OFCB channels remain open until December 31, 2026, unaffected by this announcement.

FCNR(B) Tax for NRIs

One thing that hasn’t changed with this announcement: FCNR(B) interest continues to be tax-free in India for as long as you hold NRI status, since it’s specifically exempt from Indian income tax. This exemption is one of the main reasons FCNR(B) remains a preferred parking option for NRI savings, alongside the currency-risk protection it offers. Tax treatment in your country of residence is a separate matter and depends on local rules — for NRIs based in the UAE specifically, see our detailed breakdown in FCNR Interest Tax for NRIs in UAE.

FCNR(B) Deadline: Key Dates at a Glance

Conclusion

RBI’s decision to advance the FCNR(B) deadline gives NRIs a shorter window to consider deposits under the special swap facility. Existing FCNR(B) deposits remain unaffected, but anyone planning a new deposit should check the available rates, tenure, repatriation terms, tax implications, and their bank’s internal cut-off date before proceeding. With August 31 approaching, NRIs should compare their options carefully rather than making a decision based on the deadline alone.