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Time of India
2 days ago
- Business
- Time of India
Rupee fall makes diaspora's foreign currency deposits attractive
Chennai: The weakening rupee was among the reasons that made foreign currency deposits attractive for NRIs. The net inflow under Foreign Currency Non-Resident (B) Account (FCNR(B)) increased by 11% YoY from $6.4 billion in FY24 to $7.1 billion in FY25. It comes after NRIs pulled out their deposits earlier, turning the category (FCNR(B)) negative during 2020–21 and 2021–22. Data available in RBI's annual reports shows that FCNR (B) recorded a net outflow of -$3.8 billion and -$3.6 billion during two Covid years of 2020–21 and 2021–22, respectively. However, its net inflow revived during 2022-23 and stood at $2.4 billion. In FY25, the net inflow under non-resident deposits basket comprising Non-Resident External (Rupee) Account (NRE), Non-Resident Ordinary (NRO) Account and FCNR (B) was at $16.2 billion, the highest in the past 11 years. Of this, FCNR (B) share was 44%. RBI raising the interest rate caps on FCNR (B), allowing banks more freedom to offer better returns also fuelled its growth. You Can Also Check: Chennai AQI | Weather in Chennai | Bank Holidays in Chennai | Public Holidays in Chennai FCNR(B) account is a type of fixed deposit account designed specifically for NRIs and Persons of Indian Origin (PIOs). Its unique feature is that money is held in international currencies such as US Dollar (USD), British Pound (GBP), Euro (EUR), Australian Dollar (AUD), Canadian Dollar (CAD), Swiss Franc (CHF), and Japanese Yen (JPY), which protects depositors from exchange rate fluctuations. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Upexi's $100M Solana Investment: What It Means for Shareholders bullseyealerts Read More Undo While the duration of term deposits ranges from 1 year to 5 years, interest earned on FCNR(B) accounts is tax-free in India. Private sector South Indian Bank, which has a sizeable NRI customers base particularly in the Gulf countries, says it has experienced a steady growth in NRE, NRO, and FCNR(B) accounts over the last three financial years at 3%, 5% and 6%, in FY23, FY24, and FY25 respectively. "The relative strength and stability of foreign currencies such as the US dollar further incentivized NRIs to invest in these accounts. Additionally, the depreciation of the Indian Rupee enhanced the appeal of foreign currency deposits as a hedge against exchange rate risk," said Biji S S, senior general manager and head of branch banking, South Indian Bank. Tanvi Kanchan, head - NRI business & strategy, Anand Rathi Shares and Stock Brokers said, "Looking ahead to FY26, inflows are expected to rise further. This is because interest rates in India are still relatively high, and if rates fall in the US or other developed markets, India will become even more attractive for NRIs seeking better returns," Kanchan added.
India.com
25-06-2025
- Business
- India.com
India's FDI Inflows Surge To $8.8 Billion In April
Mumbai: Gross inward foreign direct investment (FDI) inflows into India surged to $8.8 billion in April this year, higher than $5.9 billion in March and $7.2 billion in April 2024, according to the RBI's monthly bulletin released on Wednesday. Manufacturing and business services accounted for nearly half of the gross FDI inflows in this month. India ranked 16th globally in FDI inflows and recorded $114 billion in greenfield investment in digital economy sectors over the last five years (2020-2024), the highest among all countries in the Global South, the bulletin states. Foreign portfolio investment (FPI) recorded net inflows of $1.7 billion in May 2025, driven by the equity segment. Equities gained for the third consecutive month as the India-Pakistan ceasefire, the US-China trade truce, and better-than-expected corporate earnings results in Q4:2024-25 lifted investor sentiment and spurred portfolio rebalancing towards Indian assets. Telecommunication, services, and capital goods emerged as the top recipient sectors. The debt segment, which had experienced outflows in the previous month, observed a pause in net withdrawals in May, even as the yield differential between Indian and US government bonds remained below 2 per cent for most of the month, according to the bulletin. Non-Resident Indian (NRI) deposits rose to $165.43 billion during April this year, up from $164.68 billion in the same month of the previous year. Foreign Currency Non-Resident Bank (FCNR(B)) deposits rose 9 per cent year-on-year in April 2025, with outstanding balances increasing to $33.08 billion from $30.26 billion in April 2024. This marks the sharpest percentage growth among the three deposit schemes, despite its smaller share in the overall pie. The monthly inflow under FCNR(B) deposits stood at $483 million in April 2025, compared to a provisional $272 million in April 2024–26. The build-up in forex reserves also helped to strengthen the rupee and reflects a strong external balance position, which is sufficient to finance more than 11 months of the country's exports. "The Indian rupee (INR) appreciated by 0.4 per cent month-on-month vis-à-vis the US dollar and exhibited low volatility during May 2025. Uncertainty surrounding the US trade and its fiscal policy contributed to a general strengthening of EME currencies vis-à-vis the US dollar," the bulletin added.
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Business Standard
25-06-2025
- Business
- Business Standard
Inflows in NRI deposits moderate to $ 751 mn in April, shows RBI data
Inflows into NRI accounts fell to $751 million in April 2025 from $1.07 billion a year ago, but total deposits rose to $165.43 billion, RBI data shows Abhijit Lele Inflows into non-resident Indian (NRI) accounts in banks moderated to $751 million in April 2025 from $1.07 billion in April 2024, according to Reserve Bank of India (RBI) data. Inflows to NRI deposit schemes rose to $16.16 billion in FY25 from $14.70 billion in FY24. Total outstanding NRI deposits reached $165.43 billion at the end of April 2025, up from $153 billion a year ago. Sequentially, outstanding deposits stood at $164.67 billion in March 2025. NRI deposit schemes include foreign currency non-resident (FCNR) deposits, non-resident external (NRE) deposits and non-resident ordinary (NRO) deposits. As much as $272 million flowed into FCNR (B) accounts in April 2025, down from $483 million in April 2024. The outstanding amount in FCNR (B) accounts stood at $33.08 billion at the end of April 2025. Meanwhile, NRE deposits recorded an inflow of $376 million in April 2025, compared to $564 million in April 2024. Outstanding NRE deposits stood at $101.11 billion in March 2025. NRO deposits saw inflows of $103 million in April 2025, up from $31 million a year ago. The total outstanding amount in NRO deposits was $31.23 billion in March 2025.
Mint
23-06-2025
- Business
- Mint
What happens to the tax exemption on NRE and FCNR interest when I become an RNOR?
Q. I have been an NRI for the past 24 years. I have some NRE and FCNR deposits which will mature after 1-April-2026. If I come back to India in July 2025 for good, my residential status for AY-2026-2027 will be Resident but Not Ordinary Resident (RNOR). Do I have to liquidate all my NRE and FCNR deposits or can I hold these deposits up to maturity? How will my tax liability be determined for interest on such fixed deposits? Interest on NRE (Non-Resident External) deposits as well as FCNR (Foreign Currency Non-Resident) deposits are fully exempt in the hands of a non-resident as per the provisions of the Income Tax Act, 1961. When you come back to India with an intention to stay in India for an indefinite period, you become a resident under the FEMA (Foreign Exchange Management Act) laws immediately on your arrival in India. Once you become a resident under FEMA, you are required to convert your existing NRE accounts to either a regular resident rupee account or RFC (Resident Foreign Currency Account). While the deposits can be continued with the stipulated rate of interest till maturity, the interest after the date of your arrival in India will become taxable in India. The bank will deduct tax at source on the interest credited for the period post your arrival in India. As far as deposits in FCNR deposits are concerned, you can continue to have the FCNR deposits till their maturity, and on maturity, the deposits have to be converted into resident rupee accounts or transferred to RFC accounts. Unlike interest on NRE deposits, which becomes taxable once you become a resident under FEMA, interest on an FCNR account does not become taxable in India immediately on your coming back to India and will continue to remain tax exempt as long as you remain a non-resident or a resident but not an ordinary resident under income tax laws. Read all our personal finance stories here. Balwant Jain is a tax and investment expert and can be reached at jainbalwant@ and @jainbalwant on his X handle. Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Hindustan Times
10-06-2025
- Business
- Hindustan Times
How an NRI Account Makes It Easier to Support Family from Abroad
Most Non-Resident Indians working abroad feel the need to have a convenient way to manage their finances and send money to their family in the home country. This is when NRI accounts prove to be useful. In this article, we'll cover in depth about NRI account types, features to look out for and how you can apply for one. Broadly, there are three NRI accounts you can choose from basis your needs. Here is a brief overview of different types of NRI accounts. As an NRI, you can opt for all three types of account while residing abroad, this will not only help in managing your personal finances but also any investments you plan to do. Here are a few use cases where an NRI account becomes essential for both NRI and their families back home: 1. Daily Expenses Sending money to home country is one of the most common uses of NRI accounts. This helps in covering groceries, utilities, any bills that are due and other household needs. Family members living in the home country can also withdraw cash for any purchases. NRIs can also send their best wishes through gifting money for birthdays, weddings or festivals. The money gifted is exempt from tax if it is sent to defined relatives through international bank transfers or from their NRI accounts. For any unforeseen circumstances, NRIs often require sending money quickly, where an NRI account that offers same-day transfers can be really helpful. This is also essential for them to cover urgent or uncertain medical expenses for family members. 4. Investments: NRIs looking to invest in financial assets such as property, mutual funds or other assets in their home country can invest through NRI accounts, making it easy to manage wealth while staying abroad. When living abroad, checking digital features of an NRI savings account adds convenience and reduces everyday challenges. Here are some significant features you should look for: Before opening an NRI account, make sure you have the documents needed to complete the bank's Know Your Customer (KYC) process smoothly. Here's a quick checklist: Some banks might also require documents such as FATCA/CRS declaration for tax compliance, income proof or tax return and cancelled cheque of your bank account. When it comes to taxes on NRI accounts, it is important to know that it is only applied for income earned in India. While the NRO interest is taxable, the NRE/FCNR interest is not. The income tax exemption for non-resident Indians (NRIs) under the new income tax regime in 2025 is INR 3 lakhs. The following are subject to NRI income tax: When you're living abroad, an NRI savings account such as an NRO or NRE account helps you support your family in India. Choosing the right one makes remittances simple and efficient. It also ensures your earnings are managed in a compliant and convenient way. Most accounts offer digital banking features that make personal finance management seamless for NRIs. Note to readers: This article is part of HT's paid consumer connect initiative and is independently created by the brand. HT assumes no editorial responsibility for the content, including its accuracy, completeness, or any errors or omissions. Readers are advised to verify all information independently. Want to get your story featured as above? click here!
