Lower inflows into FCNR(B) and NRE accounts weighed on overall deposits, even as the Reserve Bank introduced measures to attract fresh foreign currency
Inflows into Non-Resident Indian (NRI) deposit schemes declined by 29.25 per cent during the first two months of the 2026-27 financial year, according to the latest data released by the Reserve Bank of India (RBI).
The data showed that deposits from overseas Indians totalled $1.33 billion during April and May 2026, compared with $1.88 billion in the corresponding period of the previous financial year. The decline was mainly driven by weaker inflows into Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits and Non-Resident External (NRE) accounts.
Despite the slowdown in fresh inflows, the total outstanding value of NRI deposits remained broadly stable at $165.96 billion at the end of May 2026. This compares with $165.59 billion in April 2026, although it was marginally lower than $166.72 billion recorded a year earlier.
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Among the various schemes, FCNR(B) deposits attracted $282 million during April-May, down from $442 million a year earlier
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NRE deposits also declined sharply to $597 million, compared with $1.01 billion in the same period last year
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In contrast, Non-Resident Ordinary (NRO) deposits recorded a modest increase in inflows to $451 million, up from $434 million
The moderation follows a broader trend of softer NRI deposit mobilisation over recent months. However, the RBI has since introduced temporary measures to encourage fresh overseas deposits, including lifting the interest rate ceiling on select FCNR(B) and long-term NRE deposits until the end of September 2026. Economists expect these steps to support foreign currency inflows and strengthen India’s external position in the coming months.
Recent market assessments also indicate that the surge in foreign currency deposits mobilised after the RBI’s policy changes could help improve foreign exchange liquidity and reduce the central bank’s forward dollar obligations, although the full impact is expected to become clearer in the coming months.
