ICICI Bank has successfully raised $17.88 billion through the Reserve Bank of India’s foreign currency swap window, which concluded on August 31, 2026. The private lender has strategically deployed these funds into international loans and guarantees while recently cutting its foreign deposit rates by 310 basis points.
ICICI Bank has disclosed that it mobilized approximately $17.88 billion in Foreign Currency Non-Resident (FCNR) deposits under a special swap facility provided by the Reserve Bank of India. This facility, designed to bolster foreign currency liquidity in the banking system, saw higher-than-expected interest, leading the central bank to advance its closure to August 31, 2026, from the originally planned date of September 30.
Following the successful mobilization of these funds, the bank has been actively managing its deployment. According to recent regulatory filings, ICICI Bank utilized these deposits to extend roughly $9 billion in loans through its international branches and subsidiaries. Additionally, the bank issued $3.63 billion in standby letters of credit and guarantees to support trade and credit activity. Alongside the deposit program, the lender also tapped global markets with $3.55 billion in USD-denominated bond issuances between July and August.
With the RBI’s swap window now closed, banks are shifting their focus toward conventional market-based borrowing. A clear indicator of this strategic pivot at ICICI Bank is the sharp reduction in its long-tenure foreign currency deposit rates. The bank recently cut its 5-year USD FCNR(B) deposit interest rate by 310 basis points, lowering it from 6.00% to 2.90%. This move suggests that the bank is looking to reduce its cost of funds now that the special central bank support window is no longer available.
For investors, this transition presents a few points of focus. While the influx of foreign currency has strengthened the bank’s international credit portfolio, the challenge now lies in maintaining profitability as it moves away from the subsidized swap mechanism. Competitive pressure in international markets and potential volatility in global interest rates could influence the bank's ability to maintain its profit margins on these foreign currency assets.
The key monitorable for shareholders will be how the bank manages its net interest margins (NIMs) in the coming quarters. Investors may watch for management commentary on how the bank intends to refinance or sustain its international lending book as it moves toward reliance on standard market funding sources. The impact of the rate adjustment on future deposit growth and the overall performance of the bank's international subsidiaries will also be important to track.