Iran war squeezes NRI deposits, overseas Indians pull out nearly $2 billion in March

The Iran war is affecting cash flows from overseas Indians, with NRIs withdrawing nearly $2 billion greater than they deposited in Indian financial institution accounts in March, in line with Reserve Financial institution of India (RBI) information. The whole worth of NRI deposits with Indian banks fell to $165.65 billion on the finish of March from $167.58 billion a month earlier. Total inflows into these deposits additionally slowed, dropping to $14.41 billion in 2025-26 from $16.16 billion in the earlier monetary 12 months.The autumn was primarily seen in non-resident exterior rupee accounts (NRERA) and non-resident extraordinary (NRO) accounts, the place withdrawals have been increased than recent deposits through the month. On the identical time, overseas foreign money non-resident or FCNR(B) account balances remained virtually unchanged. Bankers stated NRERA and NRO accounts are largely utilized by Indians working overseas, particularly in Center Jap nations. FCNR(B) accounts, in the meantime, are typically utilized by Indians settled overseas, significantly in Western nations, ET reported. RBI information confirmed NRERA deposits stood at $98.56 billion on the finish of March, down from $99.77 billion a 12 months earlier. NRO deposits additionally declined to $33.33 billion from $34.09 billion. FCNR(B) deposits, nevertheless, remained regular at $33.76 billion in contrast with $33.72 billion earlier.Bankers and economists stated an extended interval of geopolitical uncertainty may have an effect on NRI deposits additional. South Indian Financial institution managing director PR Seshadri had earlier advised ET that flows may very well be impacted extra “if the (West Asia battle) challenge continues over an extended interval and folks’s livelihoods in these nations are impacted”.