The Reserve Bank introduced a US dollar-rupee forex swap facility for fresh FCNR (B) deposits mobilised by banks for a minimum tenor of three years and a maximum of five years to attract foreign capital. Foreign Currency Non-Resident (Bank) deposits are foreign currency term deposits maintained by non-resident Indians (NRIs). The swap facility will be available to the AD Category I banks for fresh FCNR(B) deposits mobilized in any freely convertible currency, including deposits that are renewed upon maturity, for a minimum tenor of three years and maximum tenor of five years. However, the swap facility with RBI will be available in US Dollars only, RBI stated. Under the swap arrangement, a bank can sell US Dollars in multiples of USD one million to the RBI and simultaneously agree to buy the same amount of US dollars at the end of the swap period, the central bank circular said.
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