India’s total outstanding NRI deposits rose in the financial year ending March 2025, continuing the momentum seen in the previous year.
According to RBI data, total NRI deposits grew by 8.4 per cent in March 2025, following a 9.4 per cent increase in March 2024, marking a strong recovery from the stagnation observed in the post-covid years.
Sustained Recovery After Two Years of Decline
The growth trajectory of NRI deposits has seen a significant turnaround since March 2022, when deposits declined by 2 per cent, followed by a marginal dip of 0.1 percent in March 2023. The last two years, however, have recorded consistent expansion.
Pratik Shah, National Leader – Financial Services, EY India explains “Buoyed by robust performance in India’s equity and mortgage markets, NRIs are increasingly channelling funds into deposits to tap into the country’s accelerating growth story—especially as Indian equities continue to outshine global benchmarks in both emerging and developed economies. Further, India’s stable macroeconomic environment, and prudent fiscal and inflation management made it an increasingly attractive destination for NRIs to park funds.”
FCNR(B) Deposits Lead the Growth
Among the three NRI deposit schemes FCNR(B), NR(E)RA, and NRO, the Foreign Currency Non-Resident scheme recorded the strongest growth. Outstanding FCNR(B) deposits surged from $25.7 billion in March 2024 to $32.81 billion in March 2025, marking a 27.5 per cent growth. This follows an even stronger 32.9 per cent growth in the previous year.
The FCNR(B) scheme’s rising share in NRI deposits suggests a growing NRI preference for foreign currency-denominated deposits. Industry experts attribute rising global uncertainties stemming from the U.S. elections, geopolitical tensions, and regional conflicts as key factors that prompted NRIs to explore safer avenues for capital preservation. FCNR(B) accounts, which are held in hard currencies such as USD or EUR, also provide a natural hedge against rupee depreciation, making them attractive in volatile times.
“RBI also raised interest rate ceilings on FCNR‑B deposits (1-5 year’s maturity) by up to 150 bps. This made Indian fixed-income offerings more appealing than those abroad, attracting NRIs,” Shah added.
Steady Rise in NRO Deposits; Slower Growth in NR(E)RA
Non-Resident Ordinary (NRO) deposits also continued to rise, growing by 13.1 per cent in March 2025 to reach $31.1 billion. The scheme saw consistent annual growth from $15.97 billion in March 2020, nearly doubling over five years.
In contrast, Non-Resident External Rupee Account [NR(E)RA] deposits showed modest growth of 2.1 per cent in March 2025, increasing marginally to $100.7 billion, from $98.6 billion in March 24. This slower growth follows a dip observed in March 23, when the outstanding amount dropped to $95.8 billion from $100.8 billion in March 2022.
Shah noted, “Relatively slower growth in NR(E)RA deposits is largely attributable to attractiveness of FCNR deposits, which offer protection against rupee depreciation. Additionally, the proposed 5 per cent tax by the U.S. government on outbound remittances has prompted many NRIs to consider parking funds directly in India rather than routing them frequently from overseas.”
(The writer is an intern with Business Line)