Flows in NRI deposits rises 43% in April-December 2024 to $13.33 billion, says RBI

NRI deposit

The flow of funds by the overseas Indians in the Non-Resident Deposits has increased by 43 percent between April and December to $13.33 billion, according to the Reserve Bank of India’s (RBI) bulletin.

The data also showed that NRI deposits between April and December 2024-25 stood at $13.33 billion, as compared to $9.34 billion between April and December 2023-24.

Of the total between April and December 2024-25, FCNR(B) deposits have grown sharply by 87.3 percent to $6.47 billion, from $3.45 billion in a year ago period.

This was followed by NR(E)RA deposits grown by 22.5 percent to $3.57 billion, and NRO deposit by 11 percent to $3.3 billion.

Three schemes under which inflows have come are foreign currency non-resident (banks), or FCNR(B), non-resident external rupee account NRE(RA) and non-resident ordinary (NRO) deposit schemes.

In FCNR(B), the foreign exchange risk is borne by the deposit-accepting bank and in the NRE(RA), it is the depositor. The funds in the NRO scheme are for local use by the NRI and repatriable up to a certain limit.

In December monetary policy, the RBI has increased interest rate ceiling that banks can offer for foreign currency non-resident (FCNR-B) deposits to boost forex inflows.

Banks will now be permitted to raise fresh FCRN-B deposits ranging between maturity of 1 year and less than 3 years at rates not exceeding the relevant reference rate plus 400 basis points, then RBI governor Shaktikanta Das said in his monetary policy statement.

Deposits with maturity between 3 and 5 years can be offered at rates not exceeding the reference rate plus 500 bps.

For both the maturities, this is 200 bps higher than what they can currently offer.