Reserve Bank of India launches dollar-rupee swap for PSUs, banks
The Reserve Bank of India just launched a new dollar-rupee swap facility to make it easier for public sector units, or PSUs, and banks to raise money from abroad.
Announced by Governor Sanjay Malhotra on June 5, the scheme is open for ECBs raised by PSUs with at least three years' average maturity and OFCBs raised by Authorized Dealer Category-I banks with a minimum three-year maturity, as long as funds are drawn by December 31, 2026.
It's basically RBI's way of helping Indian PSUs and banks tap into global cash, without too much hassle.
Banks swap at FBIL rate, 1.5%
Banks can sell dollars to the RBI at the FBIL Reference Rate and buy them back later, with a fixed annual interest of 1.5% (compounded semiannually).
Deals must be in $1 million increments, and the maximum term is five years. However, loans meant just to refinance old debt or those with tricky options aren't allowed.
The facility stays open until January 15, 2027, giving PSUs and banks a handy window to secure overseas funding.