India has prematurely closed a foreign-currency deposit scheme, attracting over $56 billion chiefly from Gulf-based non-resident Indians, signalling a surge in expatriate savings greasing the country’s external accounts amidst supportive central bank policies.
India has closed a special foreign-currency deposit drive for non-resident Indians ahead of schedule after attracting far more money than expected, with bankers saying the Gulf was the main source of the inflows. The Reserve Bank of India said total collections under the programme reached about $56.85 billion by 13 August, including $52.3 billion in Foreign Currency Non-Resident Bank deposits, and it shut the window a month early after the response exceeded its initial target.
The scale of the takings reflects an aggressive effort by the central bank to bolster foreign-exchange reserves and support the rupee. According to reporting by LiveMint, the Reserve Bank relaxed pricing limits and reopened a special swap facility that let banks raise fresh FCNR(B) deposits in dollars and exchange them with the central bank on favourable terms, making the product much more attractive to overseas Indians. Business Standard also reported that inflows into NRI deposits had weakened earlier in 2026, but the new measures helped revive interest in FCNR(B) accounts.
Banking sources cited in Indian financial media said the Gulf Cooperation Council countries generated the bulk of the new money, with the United Arab Emirates accounting for a particularly large share. That fits the wider profile of India’s overseas workforce, which is heavily concentrated in the Gulf, even though the Reserve Bank has not released an official regional breakdown for the deposits. Analysts also note that the structure of these dollar deposits is different from ordinary remittances, because they are longer-term savings rather than day-to-day transfers home.
The product’s appeal is straightforward: it offers dollar-based returns, protection from rupee swings and repatriation flexibility, while interest is generally tax-free under Indian rules, according to sector research and explanatory material published by industry and policy websites. In some cases, Indian banks reportedly offered annual returns as high as 6.5% to 7.5%, levels that helped draw money away from Gulf financial centres. The result was a rare windfall for India’s external accounts and a reminder of how quickly expatriate savings can be mobilised when conditions are favourable.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
