Are you curious about how are Non-Resident Indians (NRIs) contributing to the economy of India through their deposits in 2024? If yes, then you are at the right place. As per the current data, Foreign Currency Non-Resident (FCNR) accounts have witnessed a considerable rise, reaching $4.15 billion from April 2023 to January 2024, compared to $1.28 billion a year ago. As of January 2024, outstanding NRI deposits reached $147.73 billion, marking a $823 million rise from December 2023. This growth trend shows a significant increment from $136.82 billion in January 2023.
This surge in NRI deposits in FCNR accounts shows increasing confidence in the economy of India among NRIs, contributing positively to the country’s foreign exchange reserves and strengthening its financial stability amidst global uncertainties.
Wondering why these contributions are increasing year on year? Find out by understanding the remittance trends in 2024 and their implications on the Indian economy.
Increase in Digital Remittance Services
The speed and convenience of digital remittance services have resulted in a considerable increase in their adoption. More NRIs are using online platforms to send funds home, supported by faster transaction time and lower fees. The widespread acceptance of this trend has made international remittance more accessible and efficient. Additionally, this shift has benefitted the Indian economy by ensuring quicker and more reliable inflows of foreign funds.
Rising Inflows Through NRI Deposits
The surge in NRI deposits, especially in FCNR accounts, highlights a rising confidence in the economy of India. This increase in NRI deposits bolsters the financial reserve of India, offering a cushion against economic volatility.
As an NRI wanting to open an FCNR deposit, you can consider IndusInd Bank. Why? This is because, the FCNR Deposit Account by IndusInd Bank permits funds to be maintained as term deposits in six currencies i.e., GBP, USD, JPY, EUR, AUD, and CAD. Other benefits of this account include:
| Benefits | |
| Repatriability | Freely and fully repatriable |
| Interest compounding | Compounded on 180 days |
| Tenure | Minimum of one year and maximum of five years |
| Interest income | To earn interest, the deposit should be kept for at least a year |
| Tax exemption | Interest earned is exempt from tax in India |
This account by IndusInd Bank highlights the benefits of NRI deposits and their role in enhancing returns while supporting financial stability.
Enhanced Remittance Inward and Outward
There is a constant growth in both remittance inward and remittance outward. NRIs are sending more money to India due to the favourable rates and economic stability. India is the largest recipient of inward remittance and according to the World Bank’s latest report, may witness higher inflows of $135 billion in 2024. Outward remittance is also on the rise, with Indians investing and spending in international markets more frequently. As per data by the Reserve Bank of India (RBI), India’s outward remittances under the Liberalised Remittance Scheme (LRS) hit a new high of $31.73 billion in FY24. This surge in remittance flows boosts liquidity and investment potential within the Indian economy.
Ending note
The remittance trends in 2024 show a pragmatic growth trajectory fuelled by technological advancements, strong regulatory support, and favourable exchange rates. The considerable uptick in NRI deposits, especially FCNR accounts, highlights the increasing confidence amongst NRIs in the economy of India. These trends not only enhance the financial stability of NRIs but also contribute positively to the foreign exchange reserves of India.
As NRIs continue to invest in and out of India, the remittance market is anticipated to record sustained growth, offering gainful opportunities for both individuals and the broader economy.
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