Mumbai, Feb 20 (IANS) The flow of funds from Indians working overseas into non-resident Indian (NRI) bank accounts has shot up by 42.8 per cent to $13.33 billion between April and December 2024, compared to $9.33 billion during the same period in 2023, according to the latest figures compiled by the Reserve Bank of India (RBI).
The total outstanding NRI deposits at the end of December 2024 have gone up to $161.8 billion from the corresponding figure of $146.9 billion in December 2023.
NRI deposit schemes include foreign currency non-resident (FCNR) deposits as well as non-resident external (NRE) deposits, and non-resident ordinary (NRO) deposits which are held in rupees.
The highest flows to the tune of $6.46 billion came into FCNR (B) deposits during the April-December 2024 period, close to double the amount of $3.45 billion deposited in these accounts during the same period last year. The outstanding amount in FCNR(B) accounts increased to $32.19 billion at the end of December.
An FCNR(B) account allows customers to maintain a fixed deposit in India in freely convertible foreign currencies for a tenure ranging from one to five years. Since the account is maintained in foreign currency, it secures the money against currency fluctuations during the tenure of the deposit.
NRE deposits recorded an inflow of $3.57 billion during this period, compared to $2.91 billion in the same period of the previous year. Outstanding NRE deposits stood at $99.56 billion in December 2024.
NRO deposits registered inflows to the tune of $3.29 billion in April-December 2024, up from $2.97 billion during the same period a year ago. The total outstanding amount in NRO deposits was $30.04 billion in December 2024. An NRO account is a rupee-denominated bank account for NRIs.
The RBI had in early December hiked the interest rate ceiling on Foreign Currency Non-Resident (FCNR-B) deposits, so that banks could offer higher returns on these deposits. The step was taken to attract more foreign currency into the country to strengthen the rupee vis-a-vis the US dollar.