NRE (Non-Resident External) deposits, which are bank accounts held in India by NRIs to deposit and manage income earned abroad, are also rupee-denominated bank accounts or fixed deposits held by NRIs.

The special measures undertaken by the Reserve Bank of India (RBI) to boost foreign currency deposits have paid off. There has been an over seven-fold surge in total NRI deposits in the first four months of FY27.

Total NRI deposit inflows in the corresponding period last year was $4.6 billion. During April-July this year, it had risen to $36.2 billion, driven by FCNR(B) deposits, which accounted for about 95% of total fresh inflows.

While NRO inflows remained stable at $1.5 billion, NRE inflows fell by about 91% to $0.2 billion in April-July 2026. It was $2.4 billion in the same period last year.

FCNR(B) deposits, which are denominated in foreign currency, do not carry currency risk for depositors. This is one main reason why NRIs are increasingly opting for these deposits over rupee-denominated deposits, influenced by currency movements and the RBI’s special swap facility.

Regarding overall NRI deposit stock, outstanding FCNR(B) deposits as of July 2026 had more than doubled to $68.3 billion, from $33.6 billion the previous year. But, NRE deposits had declined 4% to $98 billion.

With FCNR(B) deposits accounting for roughly 34% of the total NRI deposit stock as of July 2026, it is a remarkable increase from around 20% last year. – editor@nrifocus.com