RBI says over $25 bn collected from special swap window
26 November 2013
The Reserve Bank of India (RBI) has received about $25 billion from special concessional swap windows for deposits by non-resident Indians and overseas foreign currency borrowings by banks.
The amount would have crossed $25 billion as of date, RBI deputy governor HR Khan said on the sidelines of an event organised by the National Housing Bank.
The Reserve Bank announced the swap windows for foreign currency non-resident (FCNR) bank deposits and overseas borrowings by banks on 4 September, after the rupee declined about 30 per cent against the dollar between April and August.
The special window allows banks to swap fresh FCNR (bank) dollar funds, mobilised for a minimum tenor of three years, at a fixed rate of 3.5 per cent per annum.
The RBI also allowed banks to borrow up to 100 per cent of their tier-I capital from overseas, which can be swapped with the central bank at a concessional rate of 100 basis points below the rate prevailing in the market.
RBI, Khan said, has allowed banks to collect the funds latest by 31 December, provided the multilateral agencies have sanctioned loans or are already in the process of doing so.
"There are some multilateral institutions who have taken some time to sanction the loans and release it. What we have said is that there is a commitment that they will be releasing so we have given time up to December 31 for the banks to take loans under tier-I from international financial institutions, multilateral financial institutions," he said.
"The transaction has to be booked before November 30. Forward to forward can be done up to December 31. This is limited only to banks that are on the process of negotiations with international financial institutions. We have issued a circular on this," he said.
Economic affairs secretary Arvind Mayaram has said last week that the FCNR-B widow for dollar swaps will be open till 30 November, by which time the RBI would have raised around $25 billion.
Khan also said the dollar swap window for state-run oil companies would be closed in a calibrated manner, so as not to disturb the market.
He said the process has already started and the market is meeting a big chunk of PSU oil companies' dollar demand.
The swap windows have helped the rupee to gain almost 11 per cent since they were announced.