NRI deposits grow to $121.8 billion by 55% during April-September 2015: RBI

NRI deposits grow to $121.8 billion by 55% during April-September 2015: RBI thumbnail
KOLKATA: Overseas Indians have raised their investment in bank deposits as they looked to seize the advantage of a weak rupee as well as the interest rate differential between US and India.

Deposits parked in Indian banks by non-residents grew 55% during the April-September period over the same period last year, according to Reserve Bank of India data. In absolute terms, NRI deposits rose $10 billion during the six-month period to $121.8 billion.

NRIs can make deposits in three different categories maintained in Indian banks. These are foreign currency non-resident-banks (FCNR-B), non-resident (external) rupee account (NRERA), and non-resident ordinary (NRO). FCNR-B accounts do not carry foreign exchange risk as the deposits in parked in foreign currencies while depositors gain at the time of investment if the rupee remains weak.

The NRERA accounts has contributed over three-fourth of $10 billion incremental inflow as the rupee remained weak during the period and hovered between 62 a dollar and 66 a dollar.

NRIs parked about 50% more in NRERA accounts with banks such as State Bank of India during the April-September period over the same period last year. The inflows in these accounts during the period was $7.759 billion. NRERA deposits mostly come from Indians residing in the middle-east countries.The rupee now stood at 66.08 against the US greenback.

FCNR-B deposits flow grew 68% to $1.759 billion in the same period over $1.049 billion in the corresponding period last year. FCNR-B deposits mostly comes from NRIs in advances economies who look to take advantage of the interest rate differences as Indian banks offer higher rates.

The NRO category saw inflows of $535 million during the first six month of the fiscal, compared with $220 million flow in the same period last year.



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