NRIs park more forex in India on yields, safe house appeal

Synopsis Fresh inflows under FCNR(B) which gets rid of currency threat for NRIs, touched $2 billion in April-October, compared to an outflow of $841 million in the very same duration a year earlier, revealed the most recent Reserve Bank of India (RBI) information released in its month-to-month Bulletin. In general, fresh NRI deposits doubled to $6 billion throughout the April-October of 2023, from $3 billion in the exact same duration a year ago.ETMarkets.com(This story initially appeared in on Dec 24, 2023) Mumbai: Fund streams into FCNR (B) deposits, indicated for non-resident Indians, more than doubled this year, highlighting its safe-haven appeal for the diaspora through a year of worldwide geopolitical turbulence. Fresh inflows under FCNR(B) which removes currency danger for NRIs, touched $2 billion in April-October, compared to an outflow of $841 million in the exact same duration a year back, revealed the most recent Reserve Bank of India (RBI) information released in its regular monthly Bulletin. In general, fresh NRI deposits doubled to $6 billion throughout the April-October of 2023, from $3 billion in the exact same duration a year earlier. “Relatively greater rates of interest occur to be among the driving elements,” stated Madan Sabnavis, primary financial expert at Bank of Baroda. FCNR(B) returns provided by the State Bank of India were more than 5%, compared to less than 3% returns used by American Banks. Even the typical return on deposits in the Gulf nations, where the bulk of the NRI deposits originate from, is approximated to be lower than what Indian banks provide. For the depositor, there is no foreign currency threat in such deposits as it is borne by the banks. From a bank’s point of view, the RBI had actually momentarily waived money reserve requirements and statutory liquidity ratio requirements on fresh inflow
Learn more