RBI Grade B Current Affairs — 9 June 2026

RBI launched USD-INR forex swap facility for fresh FCNR(B) deposits to attract foreign capital. Banks can mobilize deposits for 3-5 years tenor, swap USD multiples of $1 million with RBI. Available to AD Category I banks for deposits in any freely convertible currency, but swaps only in USD. One-year lock-in period applies. Part of broader measures including ECB and OFCB swap facilities for PSUs and banks respectively.

This facility addresses India's external financing pressures by incentivizing NRI deposits through currency risk mitigation. Banks traditionally hesitate mobilizing long-term FCNR deposits due to USD-INR volatility exposure. The swap mechanism allows banks to eliminate forex risk - they collect foreign currency deposits from NRIs, immediately swap to rupees with RBI, and get guaranteed USD rates for maturity conversion. This creates win-win: NRIs get attractive deposit rates, banks avoid currency risk, RBI builds forex reserves. The $1 million minimum ensures institutional scale while 3-5 year tenor provides stable long-term funding. Lock-in period prevents speculative flows. Extends beyond FCNR to ECB/OFCB swaps, signaling comprehensive strategy to strengthen external account amid global monetary tightening. Critical for maintaining adequate import cover and currency stability during volatile periods.

SEBI and RBI are jointly developing derivatives instruments linked to corporate bond indices, as announced by SEBI chief Madhabi Puri Buch. This initiative aims to enhance liquidity in India's corporate bond market through standardized derivative products. The working group is finalizing operational details for a market-making framework to improve secondary market trading. This follows Union Budget announcements supporting bond market development. The move addresses long-standing liquidity constraints in Indian corporate debt markets, potentially creating new hedging and investment avenues for institutional investors and market participants.

India's corporate bond market suffers from chronic liquidity issues, with most bonds held till maturity by banks and insurance companies. Secondary market trading remains thin, creating pricing inefficiencies and limiting portfolio flexibility for investors. Derivatives linked to corporate bond indices would provide synthetic exposure to bond portfolios without requiring physical bond ownership, potentially solving liquidity bottlenecks. The SEBI-RBI collaboration ensures regulatory coordination between securities and banking regulators, critical since corporate bonds impact both capital markets and banking system stability. Market-making frameworks typically involve designated participants providing continuous bid-offer quotes, ensuring minimum liquidity levels. This initiative could mirror successful government bond futures markets, where derivatives enhanced underlying market liquidity. For RBI Grade B candidates, this represents practical application of capital market development policies, linking regulatory coordination with market microstructure improvements. The timing aligns with India's push toward deeper bond markets as alternative financing sources for infrastructure and corporate growth, reducing banking sector concentration risks.