Sharp rise in inflows as Non-Resident Indians Park more funds in Indian banks
Non-Resident Indian (NRI) bank accounts saw a remarkable 42.8% increase in fund inflows, reaching $13.33 billion between April and December 2024, compared to $9.33 billion during the same period in 2023, according to the latest data released by the Reserve Bank of India (RBI), reported daijiworld.com.
The total outstanding NRI deposits stood at $161.8 billion by December 2024, a significant rise from $146.9 billion a year ago
NRI deposit schemes include Foreign Currency Non-Resident [FCNR (B)] deposits, Non-Resident External (NRE) deposits, and Non-Resident Ordinary (NRO) deposits, all of which have contributed to the overall surge.
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To encourage foreign currency inflows and stabilize the Indian rupee against the US dollar, the RBI increased the interest rate ceiling on FCNR (B) deposits in early December
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This move has allowed banks to offer more attractive returns, further driving NRI investments in Indian banking channels
Among them, FCNR (B) deposits recorded the highest inflows, reaching $6.46 billion during April-December 2024—almost double the $3.45 billion from the previous year. The total outstanding balance in these accounts rose to $32.19 billion by December, providing NRIs with protection against exchange rate fluctuations.
NRE deposits also witnessed strong growth, with inflows climbing to $3.57 billion from $2.91 billion a year earlier, pushing the total outstanding deposits to $99.56 billion by December 2024. Meanwhile, NRO deposits saw inflows of $3.29 billion, compared to $2.97 billion last year, raising their outstanding balance to $30.04 billion.
Higher interest rates on FCNR (B) deposits have fueled NRI investments in Indian banks
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