RBI Likely to Bring Back FCNR-B Route to Boost Rupee Stability

In the upcoming April Monetary Policy Committee (MPC), the Reserve Bank of India (RBI) is planning to introduce new incentives for Non-Resident Indian deposits. With the help of this move, experts believe that RBI is aiming to prevent further weakening of the Indian rupee.

As per some sources, the RBI is believed to be reviving the Foreign Currency Non-Resident (FCNR-B) deposit scheme. This will help them to attract more foreign fund and even stabilize the rupee which has been facing increased volatility.

Currently, the United Arab Emirates (UAE) contributes to more than 40% of the FCNR-B deposits in Indian banks. This shows a heavy reliance on the Gulf region.

The recent data also highlighting a sharp decline in such deposits. According to a report by Macquarie Capital, NRI deposits fell nearly 26% to $14.35 billion between April 2025 and January 2026. FCNR-B inflows dropped even more steeply. From $7.02 billion last year to just $0.94 billion this year.

Economists say stronger inflows are needed to support the rupee and manage rising costs such as higher fuel imports.

Move Aimed at Stopping Rupee Fall

The Indian rupee has also weakened significantly since tensions escalated in West Asia in late February and fell around 3%. The rupee has declined nearly 10% overall in the current financial year which is one of its worst performances in a decade.

Although the RBI recently took steps to curb excessive speculation in currency markets. Experts believe more action may be needed to counter global pressures.

If reintroduced, the FCNR-B scheme would return after nearly 13 years. In 2013, during the “taper tantrum,” the RBI launched a similar measure which allows banks to swap dollar deposits at a lower rate. This helped bring in about $30 billion and stabilised the rupee.

Market participants now expect similar steps. Though they note that global interest rates are currently higher which could make such measures more expensive.

The RBI is widely expected to keep interest rates unchanged in its April 8 meeting. Investors will also watch for its growth and inflation forecasts as well as any updated on liquidity management.