Why NRIs pulled out $2B from Indian banks in March
What's the story
The Indian diaspora withdrew almost $2 billion from local banks in March, according to data from the Reserve Bank of India (RBI). The withdrawals were largely due to the ongoing geopolitical conflicts in West Asia. The outstanding non-resident Indian (NRI) deposits stood at $165.65 billion at the end of March, down from $167.58 billion a month earlier.
Deposit trends
Decrease in annual inflow of NRI deposits
The geopolitical tensions have also affected the annual inflow of NRI deposits. The inflow has decreased to $14.41 billion in FY26 from $16.16 billion in the previous fiscal year. South Indian Bank's Managing Director PR Seshadri said that if these issues persist and affect people's livelihoods, they could further impact NRI deposit flows over time.
Withdrawal
Outflows seen in NRERA, NRO accounts
The March net outflow indicates that NRIs withdrew more from local banks than they deposited during the month. The outflows were seen in non-resident external rupee accounts (NRERA) and non-resident ordinary (NRO) accounts, while the foreign currency non-resident bank (FCNR(B)) accounts remained stable. NRERA and NRO accounts are mainly used by Indians working abroad, especially those in West Asian countries.