NRI Deposits Drop 23% in Q1 FY27: RBI Data
By ThePip Desk
RBI data reveals a significant 23% drop in NRI deposits to $2.775 billion in Q1 FY27, despite a slight increase in total outstanding deposits.
Non-resident Indian (NRI) deposits experienced a significant decline, falling over 23% year-on-year to $2.775 billion in the first quarter of fiscal year 2027 (April-June 2026-27). This data, released by the Reserve Bank of India (RBI), marks a notable shift from the previous fiscal year’s inflows.
These Q1 FY27 inflows contrast sharply with the $3.614 billion recorded during the April-June period of 2025-26. Despite this moderation in fresh deposits, the total outstanding NRI deposits actually increased. They rose to $168.506 billion at the end of June 2026, up from $168.327 billion a year earlier.
The rise in outstanding deposits was largely attributed to contributions from Non-Resident Ordinary (NRO) and Foreign Currency Non-Resident (Bank), or FCNR(B), deposits. Understanding the distinct dynamics of these deposit types is essential for comprehending the overall trend. FCNR(B) deposits, in particular, played a significant role in this growth.
FCNR(B) Inflows See Substantial Boost
Inflows into FCNR(B) deposits more than doubled during the April-June 2026-27 quarter. This category attracted $1.732 billion, a substantial increase from the $774 million observed in the corresponding period last year. This represents an approximate 124% surge in FCNR(B) inflows.
The outstanding amount under FCNR(B) deposits consequently rose to $35.487 billion by the end of June 2026. This figure is up from $33.583 billion recorded a year earlier. On a month-on-month basis, outstanding FCNR(B) deposits also increased, moving from $34.038 billion at end-May 2026 to $35.487 billion by end-June 2026.
RBI’s Special FCNR(B) Window
The Reserve Bank of India had previously introduced a special FCNR(B) window during its June Monetary Policy Committee (MPC) meeting. This facility was designed to attract greater foreign capital inflows and bolster India’s external position. A key feature of this initiative was the RBI’s decision to bear the cost of currency hedging for these deposits.
However, the central bank later announced the closure of this special swap facility for new FCNR(B) deposits on August 31. This decision came one month ahead of its initially scheduled termination date of September 30. The early conclusion of this window is expected to influence future FCNR(B) inflow patterns.