Overseas Indians made net withdrawals of nearly $2 billion from their domestic bank accounts in March amid the Iran war, Reserve Bank of India (RBI) data showed. The outstanding non-resident Indian (NRI) deposits stood at $165.65 billion at the end of March against $167.58 billion a month ago.
This dent led to a contraction in NRI deposit inflows to $14.41 billion in 2025-26 from $16.16 billion in the preceding fiscal.
Senior bank executives and economists expect the geopolitical uncertainties to have a more pronounced impact on NRIs in the long run.
South Indian Bank managing director PR Seshadri told ET in an interview earlier this month that the NRI deposit flow is likely to be impacted more "if the (West Asia conflict) issue continues over a longer period and people's livelihoods in those countries are impacted".
The monthly net outflow in March suggests that non-resident Indians withdrew more deposits maintained in local banks than what they invested during the month. The outflows were recorded in the non-resident external rupee accounts (NRERA) and non-resident ordinary (NRO) accounts, while the foreign currency non-resident bank (FCNR(B)) accounts remained steady.
The NRERA and NRO accounts were used by Indians working overseas, mostly in West Asian nations. The FCNR(B) account was used by Indians settled abroad, especially in the West, senior bankers said.
The outstanding NRERA deposits stood at $98.56 billion at the end of March, as against $99.77 billion a year ago, while outstanding NRO deposits amounted to $33.33 billion against $34.09 billion. In contrast, outstanding FCNR(B) deposits stood at $33.76 billion against $33.72 billion, RBI data showed.
