Now Reading: NRI deposits fall 23% YoY but FCNR inflows double in Q1
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NRI deposits fall 23% YoY but FCNR inflows double in Q1
Deposits by non-resident Indians (NRIs) fell 23 per cent year-on-year to $2.775 billion in the April-June 2026 quarter, RBI data shows. Inflows had touched $3.614 billion in the same period of 2025-26.…
Deposits by non-resident Indians (NRIs) fell 23 per cent year-on-year to $2.775 billion in the April-June 2026 quarter, RBI data shows. Inflows had touched $3.614 billion in the same period of 2025-26. Despite the drop in fresh flows, outstanding NRI deposits rose to $168.506 billion by end-June 2026 from $168.327 billion a year earlier, helped by NRO and FCNR(B) deposits.
Foreign Currency Non-Resident (Bank) deposits more than doubled to $1.732 billion in the quarter, up 124 per cent from $774 million a year ago. Outstanding FCNR(B) deposits stood at $35.487 billion at end-June, from $33.583 billion a year earlier. The RBI had opened a special FCNR(B) window in June 2026, bearing hedging costs, to attract foreign capital. By August 21, the facility had brought in $72.848 billion in forex inflows, with FCNR(B) deposits accounting for $65.397 billion. The RBI closed the window on August 31, a month ahead of the scheduled September 30 closure.
Indian Opinion Analysis
The RBI's decision to close the special FCNR(B) swap window a month early signals that the central bank, which had sought to boost foreign exchange reserves amid a shifting global interest rate cycle, judged that enough capital had already been raised. The facility did not require banks to source fresh deposits, it allowed them to swap existing FCNR(B) balances into rupees at favourable hedged rates, effectively turning a liability into a near-term dollar reserve. With Rs 72.85 billion in forex inflows captured, the window served its immediate purpose: shoring up India's external account before the U.S. Federal Reserve's next policy decision. The next milestone to watch is the September 2026 data release, which will show whether the window's closure causes NRI deposit inflows to revert to their pre-window trajectory or whether the overall outstanding continues to inch up.
Source: economictimes.indiatimes.com
This brief was synthesised by AI from the source linked above.
