Finance Minister Urges Banks to Innovate for Sustained NRI Foreign Currency Deposits

Union Finance Minister Nirmala Sitharaman has urged Indian banks to develop strategies for sustaining and enhancing foreign currency deposits, specifically targeting Non-Resident Indians (NRIs). This directive aims to bolster the nation's foreign exchange reserves and ensure a steady inflow of capital.

During a recent interaction, Ms. Sitharaman emphasised the need for banks to intensify their outreach efforts to the Indian diaspora worldwide. She called for the introduction of innovative and attractive deposit products to maintain the current momentum in foreign currency inflows from NRIs.

Banks present at the discussion reported significant interest from NRIs residing in key global financial hubs. They highlighted the competitive returns currently being offered on Foreign Currency Non-Resident (Bank) or FCNR(B) deposits, including options for longer tenures such as five years, which are proving particularly appealing.

The broader objective behind this initiative is to actively mobilise further foreign currency inflows into India. Such inflows are crucial for strengthening the country's economic stability, supporting trade, and managing global financial fluctuations.