The amount of money deposited by Indians living abroad into non-resident Indian (NRI) bank accounts has increased significantly. Between April and December 2024, inflows jumped by 42.8%, reaching $13.33 billion, compared to $9.33 billion in the same period of 2023. This data comes from the latest figures released by the Reserve Bank of India (RBI).
At the end of December 2024, the total outstanding NRI deposits had risen to $161.8 billion. This marks a considerable increase from $146.9 billion in December 2023. However, the amount was slightly lower than the $162.69 billion recorded in November 2024.
Different Types of NRI Deposit Accounts
NRI deposit schemes come in three main types:
1. Foreign Currency Non-Resident (FCNR) Deposits – Held in foreign currency.
2. Non-Resident External (NRE) Deposits – Held in Indian rupees.
3. Non-Resident Ordinary (NRO) Deposits – Also held in Indian rupees, typically used for income earned in India.
FCNR Deposits See Biggest Increase
Among the different NRI deposit accounts, FCNR(B) deposits attracted the highest inflows. During April-December 2024, these accounts received $6.46 billion, nearly double the $3.45 billion deposited in the same period in 2023. As a result, the total amount in FCNR(B) deposits rose to $32.19 billion by the end of December.
FCNR(B) accounts allow NRIs to hold fixed deposits in foreign currencies for a period ranging from one to five years. These deposits are shielded from currency fluctuations, making them a secure option for overseas Indians looking to invest in India.
Growth in NRE and NRO Deposits
NRE deposits, which allow NRIs to hold Indian rupees in an account, saw inflows of $3.57 billion between April and December 2024. This was an increase from $2.91 billion during the same period in 2023. The total outstanding NRE deposits stood at $99.56 billion in December 2024.
Similarly, NRO deposits, which are rupee accounts used for managing income earned in India, saw inflows of $3.29 billion, up from $2.97 billion a year earlier. The total outstanding balance in NRO accounts reached $30.04 billion by December 2024.
RBI’s Efforts to Attract More Deposits
To encourage more foreign currency deposits, the RBI increased the interest rate ceiling on FCNR(B) accounts in early December 2024. This move allowed banks to offer higher returns, making these accounts more attractive to NRIs. The policy change was aimed at boosting foreign currency inflows and strengthening the Indian rupee against the US dollar.
With these measures in place, the sharp rise in NRI deposits highlights the confidence of overseas Indians in India’s banking system and economic prospects.
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