Why in news
- RBI's special USD-INR forex swap facility mobilized $73 billion in eleven weeks, leading RBI to advance its closure date to August 31, 2026.
What is the Special Swap Facility?
- Introduced on June 8, 2026, to attract foreign currency through FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCB), and External Commercial Borrowings (ECB).
- Allows banks to swap mobilised US dollars for Indian rupees with the central bank at fixed swap windows, hedging currency risk.
Performance and Significance
- Raised $73 billion in under 11 weeks, exceeding the $26 billion raised during the 2013 taper-tantrum swap window.
- FCNR(B) deposits contributed $65.40 billion of the total mobilization.
- Strengthens India's foreign exchange reserves and external sector buffers without increasing sovereign debt.
Key terms
FCNR(B) Deposit
Foreign Currency Non-Resident (Bank) deposits maintained by NRIs in designated foreign currencies with fixed returns.
FX Swap
An agreement to exchange currency in the spot market and reverse the transaction at a predetermined future date.
Prelims facts
- FCNR(B) deposits are exposed to currency risk for the bank, but swap windows transfer or hedge this risk with the RBI.
Mains discussion
- Role of deposit swap facilities in defending capital accounts during global financial volatility.
Source: PIB English
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
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2017 · Q77 · General Studies · 2 marks
Which of the following has/have occurred in India after its liberalization of economic policies in 1991? 1. Share of agriculture in GDP increased enormously. 2. Share of India's exports in world trade increased. 3. FDI inflows increased. 4. India's foreign exchange reserves increased enormously. Select the correct answer using the codes given below: -
2017 · Q81 · General Studies · 2 marks
What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'? 1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves. 3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future. Select the correct answer using the code given below: -
2026 · Q52 · General Studies · 2 marks
In a multi-ethnic district where both economic competition and historical grievances frequently led to community tensions, a flashpoint has arisen with a Government decision to allocate land for a waste management facility near a tribal hamlet, sparking protests by the tribal community, which claimed that the land was sacred and critical to their cultural identity. At the same time, urban residents and local industries supported the project, citing severe solid waste challenges and health concerns due to lack of a proper disposal site. The conflict has escalated with road blockades, social media campaigns, and allegations of police excesses. As a responsible Government official, you are tasked with resolving the situation through mediation, ensuring a sustainable outcome that balances environmental needs, tribal rights, and urban public health. Consider the following statements with reference to the above: 1. A successful conflict resolution process must begin with acknowledging the cultural concerns of the protesting tribal community before discussing technical alternatives. 2. The Government should move ahead with the project without delay to address urban health concerns, which outweigh the sentiments of a small group. 3. Creating a multi-stakeholder dialogue platform - including tribal leaders, environmental experts, and municipal representatives - to build mutual understanding and help de-escalate tensions. 4. Conducting an independent Environmental and Social Impact Assessment (ESIA) and sharing findings transparently with both sides to facilitate evidence-based decision-making. Which of the statements given above would contribute to the resolution process? -
2026 · Q76 · General Studies · 2 marks
Match List I with List II and select the answer using the code given below the Lists: List I (BIMSTEC Centre/Establishment) - List II (Location) A. BIMSTEC Cultural Industries Observatory - 1. NOIDA B. BIMSTEC Energy Centre - 2. Bengaluru C. BIMSTEC Centre for Weather and Climate - 3. Colombo D. BIMSTEC Technology Transfer Facility - 4. Thimphu Code: A B C D -
2026 · Q99 · General Studies · 2 marks
Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India: 1. NBFCs cannot accept demand deposits. 2. All the NBFCs operating in India have to be registered with the RBI. 3. NBFCs form part of the payment and settlement system and can issue cheque drawn on itself. 4. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs. Which of the statements given above is/are correct?