RBI FCNR(B) swap window (2013)
New RBI Governor Raghuram Rajan opened a window letting banks swap FCNR(B) and NRE foreign deposits into rupees at pre-set rates, aiming to defend a sliding rupee. Banks drew in roughly $26 billion over two months.
The rupee stabilized and foreign reserves rebuilt as dollar inflows returned.
Banks took on costlier foreign-currency liabilities with future repayment obligations, and FCNR(B) became a proven tool for shoring up the currency at balance-sheet cost.
Today's FCNR(B) inflows again inflate bank balance sheets and squeeze net interest margins, echoing the same trade-off in 2013.
