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Deposits placed by non-resident Indians with banks in India grew at a steady clip in the April-June 2011 period, growing by $1.2 billion, against $1.1 billion in the corresponding period last year.
Attractive interest rates on NRI deposits as compared to the deposit rates prevailing in the US, Euro zone and other advanced economies are the prime reason for the build-up in these deposits, according to bankers.
Moreover, workers' remittances were steady at $6.784 billion in the reporting period, against $6.414 billion in the corresponding quarter last year. A portion of this money could have been invested in NRI deposits, said a public sector bank official.
As on June-end 2011, NRI deposits stood at $52.898 billion, accounting for 16.7 per cent of India's total external debt of $317 billion, according to the Reserve Bank of India's statement on India's External Debt.
Short-term NRI deposits (up to one year maturity) accounted for 82 per cent of the total NRI deposits.
External Debt
India's total external debt increased by $10.5 billion or 3.4 per cent to $317 billion as at June-end 2011 over the March-end 2011 level primarily on account of considerable increase in external commercial borrowings (ECBs), short-term trade credits and NRI deposits.
Excluding the valuation effects due to the depreciation of the US dollar against other major international currencies and the Indian rupee, the increase in external debt as at June-end worked out to $9.1 billion over end-March 2011.
In the April-June 2011 period, inflows on account of ECBs and short-term trade credit increased by $4.302 billion and $3.070 billion respectively.
Long-term debt at $248.5 billion and short-term debt at $68.5 billion accounted for 78.4 per cent and 21.6 per cent, respectively of the total external debt as at June-end 2011.
The share of government and non-government in the total external debt was 24.8 per cent and 75.2 per cent, respectively.
Dollar debt
The US dollar denominated debt continued to be the largest component of India's external debt with a share of 54.2 per cent as at June-end 2011.
The share of Indian rupee in the total external debt stock accounted for 19.2 per cent, followed by Japanese Yen (11.1 per cent), Special Drawing Rights (9.5 per cent) and Euro (3.7 per cent).
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