Malhotra says FCNR-B deposit benefits outweigh hedging costs
In short
Sanjay Malhotra said the benefits of FCNR-B deposits are greater than the hedging costs. The report says the RBI started a special USD-INR forex swap facility on June 8, 2026, to support forex reserves and the balance of payments.
Banks could offer higher interest rates because the central bank took on the currency hedging cost. The story does not say whether the policy will be extended or changed further.
What the reporting says
Sanjay Malhotra said the economic benefits of FCNR-B deposits outweigh hedging costs, according to the headline and summary. The reporting says the RBI introduced a special USD-INR forex swap facility on June 8, 2026, to strengthen foreign exchange reserves and support balance of payments conditions, and that banks could offer higher interest rates by passing currency hedging costs to the central bank. The story does not state any policy change beyond that facility.
Why it matters
The reported RBI swap facility was designed to make FCNR(B) deposits more attractive by shifting hedging costs to the central bank. The summary says the move aimed to strengthen foreign exchange reserves and support balance of payments conditions. The source does not quantify the impact on deposits, reserves, or bank funding costs, so the near-term effectiveness is still unclear.