In response to the panic triggered by Trump's trade policies, the RBI net sold approximately $43 billion in the second half of FY25 to curb volatility, as the rupee plunged to a low of 87.95 per dollar in February this year.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
RBI cuts GDP growth projection to 6.6 per cent for current financial year, from earlier forecast of 7.2 per cent.
Here's how NRIs can protect their overseas earnings from exchange rate risk.
'Despite rising inflows, many NRIs lack awareness about NRO and NRE accounts and mistakenly use family accounts or invest in a relative's name.' 'Many are unaware of tax implications.'
Overseas Indians deposited around $4 billion in non-resident Indian (NRI) deposit schemes in April - June FY25, up 79 per cent over the amount deposited in these schemes in the same period last year, data released by the Reserve Bank of India (RBI) on Monday showed. In April - June FY25, inflows into the NRI schemes stood at $3.95 billion, compared to $2.21 billion during the same period a year ago. With this, the total outstanding NRI deposits as of June stood at $155.71 billion.
ICICI Bank, Union Bank of India, Central Bank of India and Dena Bank have all hiked interest rates on NRE and FCNR fixed deposits from January 1.
Foreign currency non-resident bank FCNR (B) deposits in dollar, having maturity of one year to less than two years, would now attract an interest rate of 2.41 per cent as compared to 2.33 per cent earlier. Rate of interest for deposits with 2-3 years maturity has been revised to 2.71 per cent from 2.43 per cent earlier. For deposits having a maturity of five years, the rate has been revised to 3.47 per cent, against 3.11 per cent earlier, the banks said.
Banks had raised about $34 billion through the FCNR (B) from deposits from NRIs in September 2013.
There's surplus liquidity and RBI, with plentiful forex reserves, is ready to pump whatever extra is needed
Bank of India has reduced interest rate on foreign currency non-resident deposits up to 0.22 per cent, effective from Saturday. There is, however, no change in the rates on yen-denominated FCNR deposits.
An article on 'State of the Economy' in the monthly Bulletin also said the improvement in the outlook for agriculture and the revival of rural spending have turned out to be the bright spots in the evolution of demand conditions. Consumer price inflation ticked up in June 2024 after three consecutive months of moderation as a broad flare-up in vegetable prices halted the overall disinflation that had been underway, it said.
Public sector State Bank of India has hiked its interest rates on FCNR (B) deposits in GBP (Pound Sterling) up to five years as also on Euro deposits of up to two years maturity.
The Bank of India has decided to hike the interest rates on foreign currency non-resident deposits denominated in dollar, sterling pound and euro from July 9, 2003.
The huge pressure on the currency market largely went unnoticed because of the demonetisation exercise.
The flow of money into Non-Resident Indians (NRIs) deposits witnessed a substantial increase, touching $2.14 billion in the first quarter of this financial year (Q1FY24), compared with $349 million in the same period in FY23. The outstanding NRI deposits rose by $2.5 billion, standing at $141.28 billion at the end of June 2023, up from $138.77 billion in May 2023, according to Reserve Bank of India (RBI) data. RBI released the updated data in the bulletin after almost three months.
Breaking the streak of continuous fall in outstanding amounts, non-resident Indian (NRI) deposits rose for the first time in the financial year to $134.54 billion in October 2022. The figure was $133.67 billion in September. Reserve Bank of India (RBI) data showed that NRI deposits were in shrinking mode for the first six months of FY23. They fell to $133.67 billion in September from $139 billion in March.
Based on the current momentum, the funds likely to be raised through the RBI's relaxed window would be $3.5 billion-$4 billion.
The flow of deposits from non-resident Indians (NRIs) hit a four-year low in the financial year 2020-21 mainly due to contraction in foreign currency deposits, latest data released by the Reserve Bank of India (RBI) shows. Total NRI deposits during FY21 were $7.3 billion as compared to $8.6 billion in FY20 - the lowest since 2016-17, when such deposits had contracted by $12.3 billion. Indian banks have three kinds of deposit accounts where NRIs or PIOs (persons of Indian origin) can park their funds: non-resident external-rupee account (NRE); non-resident ordinary rupee account (NRO); and foreign currency non-resident bank account (FCNR [B]).
"Now I get credit for the idea which actually I neither invented nor actually believed in," he said.
The 54-page document tabled in Parliament detailed how the Modi-government pull the economy from being counted among the most fragile-five in the world to being the fasted growing and the most attractive investment destination.
Flow of money into non-resident Indian (NRI) deposits moderated sharply to $3.23 billion in April 2021-March 2022 from $7.36 billion in the same period of the previous year. Outstanding deposits have also gone down to $139.02 billion at the end of March 2022. This compares to $141.89 billion a year ago, according to Reserve Bank of India (RBI) data.
Punjab National Bank has revised the interest rate on the Foreign Currency Non-resident Bank deposits denominated in dollar, pound and euro.\n\n
NRIs can repatriate the proceeds from the sale of a residential property in India, provided they meet a few conditions.
The Bank of India has revised the interest rates on Foreign Currency Non-Resident deposits in US dollar and Euro currencies with effect from Tuesday.
Rajan said that despite easy liquidity, banks have passed rate cuts into lending rates modestly.
The bank raised the interest rates on Non Resident External rupee deposits of one year to less than 2 years to 3.08 per cent from 2.49 per cent, two years to less than three years to 3.18 per cent from 2.5 per cent and three to five years to 3.45 per cent from 2.81 per cent. Similar hikes have been made in Foreign Currency Non Resident deposits held in dollars, pound sterling, Euro, Australian dollar, Canadian Dollar and Yen.
Research and ratings agencies like Icra and Moody's have said the CAD in 2018-19 would be much higher than 2017-18
State Bank of India has hiked the interest rates offered on non-resident Indian deposits with effect from Friday.
Bank deposits grew 17 per cent year-on-year as on December 13 due to higher mobilisation.
India's rupee woes seem to have worked in favour of non-resident Indians (NRIs). Last week, the Reserve Bank of India increased the cap on foreign currency non-resident (FCNR) and non-resident external (NRE) interest rates.
India's current account deficit is expected to deteriorate in the current fiscal on account of costlier imports and tepid merchandise exports, according to the Finance Ministry's monthly economic review. The review released on Thursday by the ministry also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket. For the present, it said, "their global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation."
All categories of NRI deposits saw net inflows in July.
Remittances growth is muted due to "structural" reasons which will hamper consumption demand locally, a report said on Thursday. "...the muted external remittances growth is more of a structural issue than transitory," India Ratings and Research said in its note. India has been the largest recipient of remittances from its diaspora spread all across the world and received over $70 billion inflows last year. The agency argued that flows had started to moderate even before the COVID-19 pandemic outbreak, pointing out that as a percentage of gross disposable income, the share of remittances fell to 2.5 per cent in FY19 as against 3.5 per cent in FY10.
'We will supply dollars in case of extreme volatility.'
The banks offer FCNR deposits in six currencies -- US dollar, euro, pound sterling, Canadian dollar, Australian dollar and Japanese yen. In the FCNR deposit category, SBI has raised rates by 12-21 basis points on US dollar deposits across various maturities. The new rate for the one and less than two years category is 3.12 per cent (2.98 per cent). Five-year FCNR (B) deposits carry a higher rate across various maturities at 3.66 per cent as against 3.45 per cent earlier.
Those taking up a job abroad should notify their bank about the change in status and open appropriate NRI accounts
A N Shanbhag, the highly respected investment guru, and his son Sandeep Shanbhag, answer your questions on NRI investment.
India received $70 billion in remittances during 2014.
USD-denominated FCNR (B) deposits of maturities of one year and above but less than two years and two years and above but less than three years, have been revised upwards to 4.68 per cent from 4.64 per cent and 4.57 per cent respectively.
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