Money flow into NRI deposits slumps to $1.28 bn in Dec

RBI purchased dollars worth $3.5 billion in December

After Reserve Bank of India closed the swap facility for FCNR-B deposits in November 2013, the flow of money into NRI deposits nosedived to just $1.28 billion in December 2013.

In November, NRI deposits had seen inflow of $13.71 billion in November.

The outstanding deposits (NRI deposits) rose in December to $98.58 billion from $97.30 billion in November 2013. Under FCNR (B) category, they stood at $40.41 billion at end of December, up from $39.63 billion in November, according to RBI data.

In August and September 2013 RBI took many steps to attract NRI deposits to attract foreign exchange which in turn could help to stem fall in value of rupee against US dollar. On September 04, RBI decided to offer banks a window to swap fresh foreign currency non-resident - banks (FCNR-B) dollar funds.

Under this window, banks could swap fresh FCNR (B) dollar funds (deposits with a maturity period of at least three years) at a fixed rate of 3.5 per cent a year. The swap window was open till November 30, 2013. RBI raised about $25 billion under this swap facility in three months.

Meanwhile, the NRE deposits saw net inflows in December. The outstanding NRE deposits were $49.61 billion ( $49.10 billion in November) and in NRO deposits inflows were flat at - $8.57 billion ( $8.57 billion in December).

Meanwhile, the Central bank purchased net $3.48 billion in December down from $10.08 billion in November. Its sold dollars worth $1.57 billion while it bought $5.05 billion in December 2013. Its outstanding net forward sales at end of month (December) stood at $32.59 billion, up from $32.54 billion at end of November.