RBI measures could draw $55-65bn inflows in FY27

Why RBI’s latest steps are back in focus

The Reserve Bank of India’s latest set of measures is being compared with a crisis-era playbook that helped pull sizeable foreign currency inflows into the country. SBI Research has estimated that the central bank’s initiatives could bring in $15-65 billion of foreign inflows in FY27, equivalent to ₹5.2-6.2 lakh crore. The estimates come as policymakers and markets track currency volatility, external funding conditions, and the availability of foreign capital for India’s financing needs. While the final outcome depends on take-up by banks and borrowers, the measures are being positioned as a way to strengthen the external sector and temper depreciation pressure on the rupee.

What the June 5 policy announcement included

In his monetary policy statement on June 5, RBI Governor Sanjay Malhotra announced that the RBI would bear the full hedging cost for banks mobilising fresh FCNR(B) deposits of 3-5 year maturity until September 30, 2026. The move was part of a five-measure package aimed at attracting foreign capital and supporting the rupee. Alongside the hedging support, the RBI removed Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements on FCNR(B) deposits, according to a Yes Bank report cited in the provided material. Research notes from SBI and others have described the package as a coordinated attempt to shift market perception from “depreciation risk” to “inflows”.

SBI Research: FCNR(B) could be the largest driver

SBI Research estimates that FCNR(B) deposits alone could attract $10-45 billion, which it equated to ₹3.8-4.3 lakh crore using an exchange rate of ₹95.27 per dollar. The report argued that the structure could potentially exceed the $14 billion mobilised during the 2013 scheme, which was widely seen as successful in drawing foreign currency deposits during a period of stress. SBI Research also said that, with the RBI bearing the hedging cost and exemptions from CRR and SLR, banks could offer FCNR(B) deposit rates of 5.5% or higher without taking unhedged currency risk. Market participants quoted in the text also pointed to a possible pace of around $1 billion a month from the FCNR route in the next few months, excluding ECB flows.

Swap facilities for ECB, FCCB and OFCB add to the estimate

Beyond deposits, SBI Research expects the RBI’s swap facilities for External Commercial Borrowings (ECB), Foreign Currency Convertible Bonds (FCCB) and Overseas Foreign Currency Borrowings (OFCB) to bring in another $15-20 billion. This additional chunk was stated as ₹1.4-1.9 lakh crore. Put together with the FCNR(B) estimate, SBI Research arrived at total potential inflows of ₹5.2-6.2 lakh crore in FY27. Separately, other research estimates referenced in the material placed possible inflows in a broad band, including market chatter around $10-60 billion over the next three months and analyst expectations of up to $10 billion.

Bond-market channel: changes to the Fully Accessible Route

SBI Research also highlighted steps aimed at improving foreign participation in longer-tenor government bonds. The RBI expanded the Fully Accessible Route (FAR) to include 15-year, 30-year and 40-year government securities and removed the 30% short-maturity cap. SBI noted that ₹1.5 lakh crore of new long-tenor bonds were yet to be issued and that ₹4.06 lakh crore of headroom remained under the general route. The report expectation was that these steps could support stronger foreign portfolio investor participation, ease long-end yields, and lower government borrowing costs, while also supporting the rupee.

How big could the total inflow be: key estimates

Multiple institutions and market participants cited in the material offered ranges for potential inflows. Yes Bank estimated inflows of around $15-40 billion from recent RBI and government measures, and noted that stronger inflows could lift foreign exchange reserves and help the RBI manage depreciation pressures. Other commentary cited inflows in the $10-50 billion range, with Macquarie arriving at a similar estimate of $10-50 billion in potential inflows. A separate headline estimate referenced in the material framed a broader range of 40-75 billion dollars of inflows for the overall reform package.

What SBI Research expects for deposits and liquidity

SBI Research said the combined inflows could lift banking system deposit growth to 14.5-15% in FY27. It also estimated that the credit-deposit gap could narrow by nearly ₹1 lakh crore. The logic in the report was that higher foreign currency deposit mobilisation would ease pressure on domestic deposit collection and improve banking system liquidity. SBI Research added that this could help lower borrowing costs across money market instruments and government securities, strengthening monetary policy transmission.

Balance of payments, current account, and rupee implications

On the external accounts, SBI Research expects India’s balance of payments to swing into a surplus of $1-10 billion in FY27. This would be a sharp improvement from its earlier estimate of a deficit of $15-70 billion. The report projected that the current account deficit would remain contained at 1.5-1.7% of GDP. It also said the inflows could support the rupee and help anchor market expectations without requiring an immediate shift to a higher interest-rate regime.

Market impact: currency volatility and intervention stance

The SBI Research note included a caution that excessive rupee depreciation poses greater risks than benefits. It argued the central bank should continue to intervene decisively to prevent sharp currency volatility. Other reports referenced in the material said the measures could trigger at least $10 billion in inflows and potentially support the rupee towards the 92-93 levels, framing it as an effect of improved capital flow expectations rather than a change in monetary stance. Kotak Securities also pointed to relaxed equity investment limits for NRIs, OCIs and PROIs without SEBI registration, adding another channel that could influence flows.

Analysis: why the structure resembles a tested playbook

The common thread across the estimates is the RBI’s willingness to absorb exchange-rate risk via hedging cost support, paired with regulatory relief on FCNR(B) deposits. In 2013, the FCNR(B) scheme helped mobilise roughly $14 billion of foreign currency inflows, and SBI Research believes a similar process can again be “very successful” if executed comparably. By reducing hedging and regulatory costs for banks, the package attempts to make FCNR(B) mobilisation commercially viable at scale while keeping rollover risk in check through 3-5 year maturities. Separately, the FAR expansion targets the long end of the bond market, where incremental foreign participation can influence yields and borrowing costs.

Conclusion: what to watch next

SBI Research’s central estimate of $15-65 billion in FY27 inflows places FCNR(B) deposits and RBI swap facilities at the core of the expected foreign capital pickup. The broader set of measures also includes steps aimed at long-tenor government securities and investment routes. Over the coming months, markets are likely to track actual FCNR(B) mobilisation, uptake of swap windows for external borrowings, and foreign participation in newly included FAR securities, alongside the RBI’s approach to managing rupee volatility up to the September 30, 2026 deadline for the FCNR(B) hedging support.