Dollar Deposits Drive NRI Balances to $168.1 Billion in October

NRI deposits rose to $168.1 billion in October 2025, up from $162.6 billion a year earlier, driven by a 7.9% rise in dollar deposits to $34.39 billion. Rupee deposits remained stable at $100 billion, indicating a shift toward foreign currency holdings as NRIs sought higher returns and hedged against currency volatility amid global rate differentials.

Non-Resident Indian (NRI) deposits grew marginally in October, led by higher foreign currency inflows, as dollar deposits rose sharply amid global interest rate differentials and a firm U.S. dollar.

According to the latest data from the Reserve Bank of India (RBI), total NRI deposits stood at $168.1 billion in October 2025, up from $162.6 billion a year earlier, marking an annual increase of about 3.4%.

Dollar Deposits Post Strong Growth

Among the three categories of NRI deposits, foreign currency non-resident (bank) deposits [FCNR(B)] saw the strongest growth. These dollar-denominated deposits rose to $34.39 billion in October 2025 from $31.87 billion a year ago, an increase of about 7.9% year-on-year.

Bankers attribute the rise to higher interest rate spreads and a stronger dollar, which made FCNR(B) accounts more attractive for overseas Indians. The sustained inflow also reflects renewed appetite for dollar assets as NRIs sought to hedge currency risks amid volatile forex markets.

Rupee Deposits Remain Flat

In contrast, non-resident external rupee (NRE (RA)) deposits were broadly unchanged at around $100 billion, suggesting steady but cautious sentiment toward rupee-denominated savings. The stability in these deposits indicates that while NRIs continue to hold rupee assets, incremental growth has shifted toward foreign currency accounts.

Comparison With Previous Years

The current levels mark a healthy improvement from pre-pandemic averages. Total NRI deposits, which hovered around $145–150 billion between 2018 and 2019, have gradually risen despite periodic headwinds such as global monetary tightening and domestic currency fluctuations.

The share of FCNR(B) deposits has also expanded in recent years, reflecting a growing preference for dollar-linked returns. Analysts said this trend mirrors the global pattern of capital rotation toward dollar-denominated instruments during periods of interest rate divergence.

With India’s external position remaining stable and the rupee showing relative resilience, bankers expect NRI inflows to stay robust in the coming quarters. “The moderation in inflation and clarity on rate movements in advanced economies could lend stability to foreign currency inflows,” said an economist with a private bank.

Overall, the October data highlights a subtle shift in NRI investment preference — a higher tilt toward foreign currency deposits, even as rupee balances hold steady. The composition of inflows suggests that NRIs are balancing currency risk with the need for stable returns, reinforcing their role as a reliable source of external funding for the Indian banking system.