The flow of money into non-resident Indian (NRI) bank accounts has seen a steep increase, going up by 42.8% to $13.33 billion between April and December 2024, from $9.33 billion over the corresponding period in 2023, based on the latest figures released by the Reserve Bank of India (RBI).
Consequently, outstanding NRI deposits stood at $161.8 billion as of December 2024, from $146.9 billion in the corresponding period last year.
NRI deposit schemes have three main categories: Foreign Currency Non-Resident (FCNR) deposits, Non-Resident External (NRE) deposits, and Non-Resident Ordinary (NRO) deposits, which are maintained in Indian rupees.
Of these, FCNR(B) deposits experienced the greatest inflow at $6.46 billion for April-December 2024—almost double the $3.45 billion of the corresponding period last year. The balance outstanding in FCNR(B) accounts was $32.19 billion as of December.
FCNR(B) accounts permit NRIs to keep fixed deposits in freely convertible foreign exchange for a duration of one to five years. Because these deposits are kept in foreign currency, they safeguard against exchange rate fluctuations over the term.
NRE deposits, however, saw inflows of $3.57 billion during April to December 2024, higher than $2.91 billion in the same period of 2023. The outstanding balance in NRE accounts stood at $99.56 billion as of December end 2024.
Simultaneously, NRO deposits recorded inflows worth $3.29 billion between April and December, as opposed to $2.97 billion in the corresponding period last year.
The outstanding balance in NRO deposits reached $30.04 billion by December 2024. They are rupee-denominated and are meant to regulate income accrued by NRIs in India, for example, rent, dividend, or pension.
To induce additional foreign exchange and boost the rupee's value compared to the US dollar, RBI increased the ceiling interest rate on FCNR(B) deposits at the start of December so that banks can pay more competitive interest rates on such accounts.
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