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NRI deposit inflows ease as FCNR(B) contributions slow in FY26
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While NRI deposit inflows have moderated in FY26 so far, the steady rise in outstanding balances highlights continued confidence among overseas Indians in India’s banking system
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Future trends are likely to depend on global monetary conditions, exchange rate expectations, and relative returns across deposit categories
Money sent by overseas Indians into India’s non-resident deposit schemes witnessed a moderation in the current financial year, reflecting changing currency dynamics and investor preferences. Latest data released by the Reserve Bank of India (RBI) shows that total inflows into NRI deposits stood at $8.3 billion during April–October of FY26, compared with $11.9 billion in the same period a year earlier.
The primary factor behind the softer inflows was a sharp reduction in foreign currency non-resident (bank), or FCNR(B), deposits. These deposits, which are maintained in foreign currencies and protect investors from exchange rate risk, attracted $1.6 billion during the first seven months of FY26. This was significantly lower than the $6.1 billion recorded in the corresponding period of FY25, indicating a cooling of interest in foreign currency-denominated savings.
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Despite the slowdown in fresh inflows, the overall stock of NRI deposits continued to rise. Outstanding NRI deposits reached $168.78 billion at the end of October 2025, up from $162.69 billion a year earlier
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NRI deposit schemes comprise FCNR(B) deposits, non-resident external (NRE) deposits, and non-resident ordinary (NRO) deposits, all of which play a key role in supporting India’s external financing and foreign exchange reserves
FCNR(B) balances remained stable in absolute terms, with outstanding deposits amounting to $31.88 billion as of October 2025. However, the slower pace of new inflows suggests that overseas Indians may be reassessing returns on foreign currency deposits amid evolving global interest rate trends and currency movements.
In contrast, NRE deposits showed relatively stronger momentum during the same period. Inflows into NRE accounts rose to $3.9 billion in April–October FY26, compared with $3.0 billion in the year-ago period. Outstanding NRE deposits stood at $100.98 billion at the end of October 2025, underlining their continued appeal. NRE deposits, which are maintained in Indian rupees but offer full repatriation of principal and interest, often gain traction when interest rate differentials and domestic return prospects are favourable.
