Non-Resident Indians (NRIs) have significantly increased their deposits in Indian banks, contributing nearly $4 billion to various NRI deposit schemes in the first quarter of FY25. According to data released by the Reserve Bank of India (RBI) on Monday, this represents a 79% rise compared to the same period last year.
From April to June FY25, inflows into NRI deposit schemes reached $3.95 billion, a substantial increase from the $2.21 billion deposited during the same timeframe in the previous year. The total outstanding NRI deposits as of June stood at $155.71 billion. In June alone, NRIs deposited $1.23 billion, down from $1.7 billion in May, as per the RBI data.
The NRI deposit schemes include Foreign Currency Non-Resident (FCNR) deposits, Non-Resident External (NRE) deposits, and Non-Resident Ordinary (NRO) deposits. The bulk of the inflows during this period went into FCNR (B) deposits, which saw $1.68 billion in deposits, up from $1.12 billion in the corresponding period last year. This brings the total outstanding amount in FCNR (B) accounts to $27.41 billion.
FCNR (B) accounts allow NRIs to maintain fixed deposits in freely convertible foreign currencies for a tenure of one to five years, safeguarding funds against currency fluctuations.
NRE deposits also saw a notable increase, with inflows of $1.53 billion, compared to $489 million in the same period last year. The total outstanding NRE deposits now stand close to $100 billion. NRE accounts offer a high-return rupee deposit option for NRIs investing their foreign income.
Similarly, NRO deposits attracted $743 million in the April-June FY25 period, up from $598 million a year ago, bringing the total outstanding NRO deposits to $28.24 billion. NRO accounts are rupee-denominated bank accounts for NRIs, persons of Indian origin, and overseas citizens of India, designed to hold income earned in India.
Source: Business Standard