Flows into NRI deposits up 76% to $5.4 billion in April-December

Outstanding amounts stable in December compared to November

The flow of money into deposits of Non-Resident Indians (NRIs) rose 76 per cent to $5.4 billion in April-December this financial year over $3.07 billion in the same period 2021.

However, the streak of decline in outstanding NRI deposits (what is shown in the ledger but not in the bank statement) continued during the nine months of 2022-23. They fell to $134.5 billion in December 2022 from $139.02 billion in March and $141.90 billion a year ago. They were stable in December compared to $134.6 billion in November, showed the Reserve Bank of India (RBI) data.

Bankers have said flows into deposits have increased due to facilities like easing limits on interest rates. However, there has been an outgo of funds from NRI deposits for purchases during the festival season. This is one of the reasons for the dip in outstanding deposits.

In July, the RBI took steps to enhance fresh inflows into NRI accounts. These sops were the easing of caps on interest rates on Foreign Currency Non-Resident (Bank), or FCNR (B), and Non-Resident External (NRE) deposits, and exemption from maintaining the cash reserve ratio and statutory liquidity ratio on incremental deposits until November 4.

A further analysis indicated outstanding FCNR (B) deposits were at $17.55 billion in December 2022, up sequentially from $16.71 billion in November. However, they were down compared to $18.15 billion a year ago. FCNR(B) deposits were at $16.91 billion in March. The dollar continued to be the key currency of FCNR (B) deposits.

NRE deposits were at $94.46 billion in December 2022, down sequentially from $95.31 billion in November 2022 and $102.91 billion a year ago. NRE deposits were at $100.8 billion in March.

The eligible NRI can put money in NRE deposits in any foreign denomination and withdraw it in rupees.

Non-Resident Ordinary (NRO) are accounts where money is kept in rupees and cannot be freely converted into any foreign currency. NRO deposits were stable at $22.45 billion in December 2022 as against $22.46 billion in November 2022. The amount of NRO deposits increased in December 2022 from $20.83 billion a year ago. NRE deposits were at $21.3 billion in March 2022.