Whalesbook
NRI Deposit Inflows Moderate in FY26
India's non-resident deposit schemes saw lower inflows in fiscal year 2025-26, totaling $14.41 billion compared to $16.16 billion in the previous year. Despite this slowdown, outstanding NRI deposits reached $165.65 billion by the end of March 2026, a slight increase from $164.68 billion a year earlier. However, the total outstanding balance saw a modest decrease from February 2026 levels.
FCNR(B) Deposits Plummet
The significant drop in overall inflows was largely driven by a steep decline in Foreign Currency Non-Resident (Bank) or FCNR(B) deposits. These accounts attracted only $946 million in FY26, a sharp contrast to the $7.08 billion seen in FY25. Outstanding FCNR(B) balances slightly increased to $33.76 billion by end-March 2026 from $33.72 billion in February and $32.81 billion a year prior, suggesting new deposits were minimal but existing balances were maintained.
NR(E)RA and NRO Show Mixed Results
Non-Resident External Rupee Account (NR(E)RA) deposits saw a substantial rise in inflows, jumping to $7.94 billion in FY26 from $4.71 billion in FY25. Despite this, the outstanding balance for NR(E)RA accounts decreased to $98.56 billion by end-March 2026, down from $99.77 billion in February and $100.73 billion in March 2025. Non-Resident Ordinary (NRO) deposits also attracted more inflows, totaling $5.53 billion in FY26 compared to $4.37 billion a year earlier. Outstanding NRO deposits grew year-on-year to $33.33 billion from $31.14 billion, though they slightly decreased from $34.09 billion in February 2026.
Factors Influencing NRI Deposits
Global interest rate differences and currency expectations likely influenced the slowdown in FCNR(B) deposits, potentially making dollar-denominated assets more attractive. The Reserve Bank of India's monetary policy and future rate movements are key factors for NRI deposit behavior. Increased competition from other emerging markets for remittances, alongside possible NRI deleveraging or asset reallocation due to currency or policy expectations, could also be contributing factors. The continued inflows into NRO accounts suggest ongoing interest in Indian real estate and domestic investments.