Now Reading: NRI dollar rush lifts bank deposits to decade-high growth
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NRI dollar rush lifts bank deposits to decade-high growth
Bank deposits rose 15.4% year-on-year by July, the fastest pace in nearly ten years, as overseas Indians parked about $37 billion in foreign currency non-resident deposits. The Reserve Bank of India had…
The Story in Brief
Bank deposits rose 15.4% year-on-year by July, the fastest pace in nearly ten years, as overseas Indians parked about $37 billion in foreign currency non-resident deposits. The Reserve Bank of India had created a special window in June to attract dollar inflows. India garnered nearly $41 billion in total inflows till July 31.
Bank credit growth also accelerated to 19.4%, the fastest since June 2024, driven by renewed corporate demand and MSME lending under a government-backed programme. The FCNR-B inflows of $36.72 billion have already exceeded the $26 billion mobilised under a similar scheme in 2013. The current scheme ends on September 30.
The Indian Opinion
The narrative that India's banking system is starved of dollars collapses against these numbers. Yet some commentators still peddle a story of weakness, ignoring that FCNR-B inflows have already surpassed the 2013 haul. The real test will come after September 30, when the special window closes. Will these deposits stay, or will they flow out as quickly as they came in? Watch the rupee and the bond yield spread.
Source: economictimes.indiatimes.com
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