GIFT-IFSC banks channel $54 billion via RBI's forex swap scheme

Twenty banking units at the Gujarat International Financial Tec-City (GIFT) International Financial Services Centre (IFSC) have sanctioned $54.02 billion under the RBI's Foreign Currency Non-Resident deposit swap mechanism, with disbursements reaching $52.82 billion by end-August, according to data from the International Financial Services Centres Authority (IFSCA).

The facility represents a critical tool for managing forex liquidity and supporting rupee stability. By allowing banks to swap foreign currency deposits for rupees, the RBI mechanism helps institutions meet domestic liquidity requirements while managing their external balance sheet positions.

The robust utilization across the twenty participating banks underscores growing reliance on structured liquidity management tools in India's offshore financial centre. GIFT-IFSC has emerged as a key hub for such operations, drawing international banking entities seeking to optimize their India-denominated assets and liabilities.

The high rate of disbursement relative to sanctions—capturing 97.7 percent of approved amounts—reflects operational efficiency and sustained demand from banking units for the swap facility. The facility continues to play a stabilizing role in managing forex flows and supporting monetary policy transmission during periods of capital market volatility.