Deposits made by non-resident Indians swelled by $33.285 billion in financial year 2013-14 against $12.215 billion in the previous year, according to a Reserve Bank of India bulletin.

The increase has come about thanks to the RBI announcing a host of relaxations to help banks bring in safe money to fund the current account deficit.

Among others, the central bank exempted incremental foreign currency non-resident (banks) and non-resident (external) rupee deposits mobilised by banks with reference base date of July 26, 2013, and having maturity of three years and above, from maintenance of Cash Reserve Ratio and Statutory Liquidity Ratio.

The central bank also introduced a Dollar-Rupee swap window for fresh FCNR (B) dollar funds, mobilised for a minimum tenor of three years and above, and permitted banks to offer interest rates without any ceiling on NRE deposits with maturity of three years and above.

The above schemes to attract deposits of non-resident Indians were open up to November 30, 2013.

As at March-end 2014, banks in India had NRI deposits aggregating to $104.108 billion against $70.212 billion as at March-end 2013.

Sharp increase

According to RBI’s report on Developments in India’s Balance of Payments during the Third Quarter (October-December) of 2013-14, under ‘currency and deposits’, net inflows of NRI deposits amounted to $21.4 billion in Q3 of 2013-14 as compared to $2.7 billion in Q3 of 2012-13.

A sharp increase in NRI deposits was on account of fresh FCNR(B) deposits mobilised under the swap scheme offered by the RBI during September-November 2013.

A break-up of the NRI deposits shows that in FY14, FCNR(B) deposits surged by $26.660 billion against just $220 million in the year-ago period. NRE deposits saw net inflow of $7.303 billion against a jump of $14.516 billion in the year-ago period.

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