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IFSCA reported that as on 31 August 2026, 20 IFSC Banking Units (IBUs) at GIFT City had sanctioned USD 54.02 billion under the Reserve Bank of India's special swap facility for FCNR(B) deposits, of which approximately USD 52.82 billion had been disbursed.
The scale-up was steep in August alone: aggregate sanctions rose from USD 28.60 billion on 14 August to USD 37.26 billion on 21 August and USD 54.02 billion by 31 August 2026.
Beyond the swap facility, IBUs at GIFT IFSC disbursed USD 11.62 billion of External Commercial Borrowings between April and August 2026, with monthly disbursements rising from USD 1.54 billion in April to USD 3.54 billion in August.
Indian banks raised USD 11.12 billion through bond listings on IFSC exchanges during April-August 2026, of which USD 9.17 billion was listed in July-August alone; funds were mobilised from the UK, US, Mexico, West Asia, Hong Kong, Singapore and certain African countries.
The release follows the Union Finance Minister's direction to MDs and CEOs of public sector banks to use the GIFT-IFSC ecosystem for implementing the RBI's swap facilities for FCNR(B) deposits and ECBs.
An FCNR(B) - Foreign Currency Non-Resident (Bank) - deposit is a term deposit that a Non-Resident Indian or Overseas Citizen of India holds with an authorised bank in India denominated in an approved foreign currency, with a tenure of one to five years. Principal and interest are maintained and repaid in that foreign currency, so the depositor carries no rupee-depreciation risk; the '(B)' signifies that the BANK, not the government, bears the exchange risk. That risk is the catch: to lend the dollars onward in rupees, a bank must hedge, and the hedging cost has historically run at roughly 3% a year, making FCNR(B) money expensive. The RBI's special USD-INR swap facility, announced on 8 June 2026 and covering FCNR(B) deposits, External Commercial Borrowings and Overseas Foreign Currency Borrowings, removes that obstacle: the bank swaps its dollar exposure with the RBI at par, so its forex risk on the deposit falls to zero and the deposit becomes viable to offer at competitive rates. The purpose is macroeconomic - to pull foreign currency into the country and support a weakening rupee. The response was large enough that the FCNR(B) leg was closed a month early, on 31 August 2026 instead of 30 September 2026, while the ECB and OFCB legs remain open till 31 December 2026. Across the banking system as a whole the facility drew inflows of over USD 136 billion up to 31 August 2026, of which FCNR(B) deposits accounted for about USD 127.2 billion; GIFT IFSC's banking units are reported in this release as the channel for roughly USD 52.8 billion of disbursements.
Simple Analogy: A bank holding dollar deposits but lending in rupees is like a shopkeeper paid in one currency and billed in another - the exchange rate can wipe out the margin. The RBI's swap is an insurance policy written by the central bank itself, so the shopkeeper can accept the dollars without worrying about the rate.
Unified regulator for the development and regulation of financial products, financial services and financial institutions in International Financial Services Centres in India, established on 27 April 2020 under the IFSCA Act, 2019. Inside the IFSC it exercises the powers that RBI, SEBI, IRDAI and PFRDA hold in the domestic market; by statute (Section 5 of the Act) its board includes one nominee each from those four regulators.
Announced and operates the special USD-INR swap facility covering FCNR(B) deposits, ECBs and OFCBs, absorbing banks' exchange risk on eligible mobilisations; also the regulator of the External Commercial Borrowings framework for domestic borrowers.
Empowers the Central Government to approve the setting up of an International Financial Services Centre in a Special Economic Zone and prescribes the requirements for operating it. Units in an IFSC were permitted by a notification of 8 April 2015 issued under this section, at the Gujarat International Finance Tec-City (GIFT) SEZ - which is why GIFT IFSC is described as India's maiden IFSC.
Constitutes IFSCA as the single regulator for all IFSCs in India, ending the earlier arrangement in which four domestic regulators each governed their own slice of IFSC activity. Section 5 provides for a chairperson and nominees of the RBI, SEBI, IRDAI and PFRDA on the Authority.
FCNR(B) deposits and ECBs are capital-account inflows, not export earnings; they support the rupee and add to reserves but also create a future repayment obligation in foreign currency - the standard exam distinction between current-account and capital-account sources of forex.
FCNR(B) is one of three NRI deposit routes alongside NRE and NRO accounts; the distinguishing feature is that FCNR(B) is denominated in foreign currency, so the bank rather than the depositor carries the exchange risk.
ECBs are commercial loans raised by eligible Indian entities from recognised non-resident lenders under an RBI framework - the standing channel that the June 2026 swap window was extended to, and one that remains open till 31 December 2026.
IFSCA regulates not only banking but capital markets, insurance, fund management and fintech at the IFSC, which is why aircraft leasing, ship leasing and bullion trading all sit under the same regulator.
General Awareness > Banking and Financial Awareness > Regulators, NRI Deposits, Forex
GS Paper 3 > Indian Economy > Mobilisation of Resources, External Sector
General Awareness > Economy and Current Affairs
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GIFT IFSC and IFSCA have appeared repeatedly in banking general awareness and in UPSC Prelims economy questions since 2020.
A banking branch established by an Indian or foreign bank inside an International Financial Services Centre, dealing largely in foreign currency and regulated by IFSCA.
Foreign Currency Non-Resident (Bank) deposit - a foreign-currency-denominated term deposit of one to five years held in India by an NRI or OCI, where the bank bears the exchange risk.
External Commercial Borrowing - a commercial loan raised by an eligible Indian borrower from a recognised non-resident lender, governed by an RBI framework.
Overseas Foreign Currency Borrowing - foreign currency borrowing by banks from overseas markets; the third category covered by the RBI's June 2026 swap window.
An arrangement under which a bank exchanges its dollar exposure with the RBI at par and reverses it later, so that the bank's foreign exchange risk on the underlying deposit or borrowing is neutralised.