NRI deposit flow more than doubles in Q1

The robust growth in economy seems to be providing security for overseas Indians to park funds with banks. Non-resident Indians (NRIs) placed $1,888 million as deposits with banks in the first three month ended June 2009 as against $813 million in April-June 2008.

The outstanding NRI deposits at the end of June 2009 stood at $44,980 million. These was $42,382 million at end of March.

The large inflow was in the foreign currency non resident (FCNR) banks deposits. NRI made deposits worth $849 million in April-June 2009 as against outflow of $167 million in the same period last year. The outstanding FCNR (B) deposits base was $14,061 million. Besides the safety element, the relative returns here were better than the interest rate offered abroad, said a public sector bank executive.

The non-resident (external) deposits saw inflows of $356 million, down from $551 million a year ago.

The accretion to NR ordinary rupee account rose to $683 million in Q1 of 2009-10 from $429 million a year ago. The outstanding deposits were $5,724 million.

Kerala-based banks noted that the depreciation of rupee against major currencies as well as the global financial meltdown prompted NRIs to park their savings in India.

The recession and closure of many international banks prompted most emigrants to park their savings in nationalised banks, which were thought to be safer than foreign banks.