Attractive interest rates in India saw overseas Indians pour $1.92 billion more into non-resident Indian (NRI) deposits in FY2016 vis-à-vis FY2015, according to Reserve Bank of India data.
Overall, NRI deposit inflows in FY2016 amounted to $15.977 billion ($14.057 billion in FY2015).
In FY2015, NRI deposit inflow had dropped to $14.057 billion after topping $38.406 billion in FY2014.
Year-on-year, NRI deposits increased by about 10 per cent to stand at $126.854 billion as at March-end 2016. Carry trade (NRIs borrowing in foreign currencies and parking these funds as deposits with banks in India) may have lured overseas Indians to save money with banks in India, say bankers.
In the April-March 2016 period, NRIs parked $2.492 billion as against $1.001 billion in the year-ago period in FCNR (B) deposits, according to RBI’s monthly bulletin.
FCNR (B) account can be opened in the names of two or more non-resident Indians provided all the account holders are persons of Indian nationality or origin. The account can be opened in any permitted currency — a foreign currency which is freely convertible. The term of the repatriable deposits is of not less than one year and not more than five years.
In the April-March 2016 period, NRIs saved $12.384 billion as against $12.20 billion in the year-ago period in NR (E)RA deposits.
Non-Resident (External) Rupee Account deposits can be opened in the names of two or more non-resident individuals provided all the account holders are persons of Indian nationality or origin.
NR(E)RA deposits, which are denominated in rupees and are repatriable, can be in the form of savings, current, recurring, and fixed deposits. Interest rates offered by banks on these deposits cannot be higher than those offered by them on comparable domestic rupee deposits.
NRIs parked $1.101 billion in rupee-denominated Non-Resident Ordinary Rupee Account Scheme (NRO Account) in FY2016 as against $856 million in FY2015. NRIs can hold these accounts jointly with residents. These deposits are usually not repatriable except under certain conditions.