NRI Deposits Surge USD 4 billion in Q1in Contrast with a 24% Drop in Outward Remittances: RBI Data

Current Context: According to recent data from the Reserve Bank of India (RBI), non-resident Indian (NRI) deposits surged by approximately $4 billion in the first quarter of FY25, marking a significant 79% increase compared to the same period last year.

• This increase contrasts sharply with a 24.39% drop in outward remittances, which totaled $6.9 billion for the quarter.
• The rise in NRI deposits was seen across various schemes:
• Foreign Currency Non-Resident (FCNR) deposits: Increased to $1.68 billion from $1.12 billion a year ago.
• Non-Resident External (NRE) deposits: Saw inflows of $1.53 billion, up from $489 million last year.
• Non-Resident Ordinary (NRO) deposits: Grew to $743 million from $598 million.
• Conversely, outward remittances declined across most categories, including international travel, maintenance of close relatives, and gifts.
• This decline is partly attributed to recent changes in tax collection norms and shifts in spending behavior among Indians abroad.

Question:

1 In the first quarter of FY25, by how much did NRI deposits surge according to recent RBI data?

• A) $2 billion
• B) $3 billion
• C) $4 billion
• D) $5 billion

Answer: C) NRI deposits surged by approximately $4 billion in the first quarter of FY25, marking a significant 79% increase compared to the same period last year.