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Economists and banking experts believe the ongoing uncertainty in West Asia could affect the financial behaviour of NRIs, especially those employed in Gulf countries
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PR Seshadri, MD and CEO of South Indian Bank, said deposit flows may weaken further if the regional conflict continues to impact jobs and incomes of expatriate workers
Overseas Indians withdrew nearly $2 billion from bank deposits in India during March, according to the latest data released by the Reserve Bank of India (RBI). The decline came at a time of rising geopolitical tensions in West Asia linked to the Iran conflict, raising concerns about the future flow of remittances and savings from Indians working abroad.
The RBI data showed that total outstanding non-resident Indian (NRI) deposits fell to $165.65 billion at the end of March from $167.58 billion in February. At the same time, inflows into NRI deposit schemes during FY2025-26 slowed to $14.41 billion, compared with $16.16 billion in the previous financial year.
Bankers said most withdrawals were seen in Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts, while Foreign Currency Non-Resident or FCNR(B) deposits remained largely stable
Outstanding NRE deposits stood at $98.56 billion in March, lower than $99.77 billion a month earlier. NRO deposits rose to $33.33 billion from $31.14 billion a year ago, while FCNR(B) deposits were recorded at $33.76 billion.
FCNR(B) inflows saw a sharp fall to $946 million in FY26 from $7.08 billion in the previous year. However, NRE and NRO accounts continued to receive steady inflows during the period.
