India Need Not Worry About FCNR(B) Repayments, Says World Bank’s Neelkanth Mishra

Mumbai, September 4, 2026 (Yes Punjab News)

India need not be concerned about repaying foreign currency non-resident (FCNR(B)) deposits when they mature in five years, as the instrument remains a relatively inexpensive source of capital that can be rolled over if global financing conditions remain tight, World Bank Executive Director for India Neelkanth Mishra has said.

In an interview with NDTV Profit, Mishra said India was raising funds through FCNR(B) deposits at an interest rate of around 6.5–7 per cent, describing it as “reasonably cheap capital”. He said that if global financial conditions remained unfavourable when the deposits mature, India could issue another round of FCNR(B) deposits.

“There’s no reason why this should not work again,” Mishra was quoted as saying.

India’s special USD-INR forex swap facility had attracted $136.4 billion in foreign-currency inflows as of August 31, 2026, with FCNR(B) deposits accounting for about 93 per cent of the total, according to figures cited by Mishra.

FCNR(B) holdings stood at $127.2 billion, while overseas foreign-currency borrowings contributed $5.26 billion and external commercial borrowings accounted for $3.89 billion.

Mishra stressed that every dollar flowing into the country represents a liability, regardless of whether it comes through foreign direct investment, portfolio investment or other channels.

He said India’s current account deficit should be understood primarily as a savings-investment gap rather than as a sign of economic weakness. A current account deficit means the country is taking on liabilities, either by selling assets or borrowing, he explained.

Such liabilities can include foreign portfolio investments, private equity investments, external commercial borrowings and foreign investors purchasing Indian bonds.

From the perspective of external debt and the ratio of external debt to GDP, Mishra said India remained a healthy economy with strong growth.

He added that the more important concern was how effectively the country puts foreign capital to use.