NRI deposits see $12 bn inflows in April-October FY25, shows RBI data

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Overseas Indians deposited around $12 billion in non-resident Indian (NRI) deposit schemes in April-October (FY25), almost double the amount they deposited during the same period last year, data released by the Reserve Bank of India (RBI) on Tuesday showed.

 

In April-October (FY25), inflows into the NRI schemes stood at $11.89 billion, compared to $6.11 billion during the same period a year ago. With this, the total outstanding NRI deposits as of October 2024 stood at $162.69 billion, compared to $143.48 billion during the same period last year. In October alone, a little over $1 billion was deposited by overseas Indians in various NRI deposit schemes.

 

The NRI deposit schemes include foreign currency non-resident (FCNR) deposits, non-resident external (NRE) deposits, and non-resident ordinary (NRO) deposits.

 

During the April-October period, the maximum flows came into FCNR (B) deposits. According to RBI data, about $6.1 billion flowed into these accounts during this period, compared to $2.06 billion in the corresponding period a year ago, taking the total outstanding amount in such accounts to $31.87 billion.

 

An FCNR (B) account lets customers maintain a fixed deposit in India in freely convertible foreign currencies for a tenure ranging from one to five years. Since the account is maintained in foreign currency, it secures funds against currency fluctuations during the tenure of the deposit.

 

In the recently concluded monetary policy meeting, the RBI raised the interest rate ceilings on foreign currency non-resident bank [FCNR (B)] deposits. This move by the RBI is aimed at providing banks with an additional avenue for raising funds, thereby encouraging more dollar inflows, which in turn would likely give a cushion to the rupee at a time when it is depreciating sharply against the US dollar.

 

Meanwhile, NRE deposits witnessed an inflow of $3.09 billion during this period, compared to an inflow of $1.95 billion in the corresponding period a year ago. NRE deposits are a high-return rupee deposit option for NRIs to invest their foreign income.

 

Similarly, NRO deposits also saw substantial flows of $2.66 billion in the April-October period, compared to $2 billion during the same period a year ago. An NRO account is a rupee-denominated bank account for NRIs, persons of Indian origin, and overseas citizens of India who wish to deposit income earned in India.