Non-Resident Indian (NRI) deposits saw a huge $2.14 billion inflow in the first quarter of the current financial year as against just $349 million recorded during the same period in the previous fiscal year, FY23.
According to data released by the Reserve Bank of India (RBI), the outstanding NRI deposits reached a total of $141.28 billion by the close of June 2023. This marked an escalation from the $138.77 billion recorded in May 2023.
While outstanding NRI deposits remained relatively stable in June 2023, at $138.87 billion compared to March 2023, this figure constitutes a substantial increase from the $135.97 billion reported a year earlier.
Outstanding Foreign Currency Non-Resident (Bank) [FCNR (B)] deposits also experienced growth, rising to $20.48 billion in June 2023, from $19.88 billion seen in May 2023 and $19.36 billion in March 2023. Notably, this shows a significant advancement compared to the $15.68 billion registered a year ago. Meanwhile, Non-Resident External (NRE) deposits reached $96.5 billion in June 2023, up from $95.22 billion in May and $95.81 billion in March 2023. However, this fell short of the $98.98 billion reported in June 2022. Eligible NRIs can deposit funds in NRE accounts across denominations, with the flexibility to withdraw in Indian rupees.NRO accounts
Conversely, Non-Resident Ordinary (NRO) accounts, where funds are retained in Indian rupees and lack full convertibility into foreign currency, have also observed growth. NRO deposits surged to $24.29 billion in June 2023 from $23.66 billion in May 2023 and $23.69 billion in March 2023. This is a significant increase from the $21.31 billion witnessed a year prior.
In July 2022, the RBI initiated measures to bolster inflows into NRI accounts. These measures included the relaxation of interest rate caps for both FCNR (B) and NRE deposits, as well as exemption from maintaining cash reserve ratio and statutory liquidity ratio on incremental deposits until November 4, 2022. This strategic move has evidently contributed to the pronounced surge in NRI deposits in the subsequent periods.
