Flow of money into non-resident Indian (NRI) deposits moderated sharply to $3.23 billion in April 2021–March 2022 from $7.36 billion in the same period of the previous year.

Outstanding deposits have also gone down to $139.02 billion at the end of March 2022.

This compares to $141.89 billion a year ago, according to Reserve Bank of India (RBI) data.

Before, the situation was exactly opposite when NRI deposits had swelled by over $10 billion from $130.58 billion in March 2020 to $141.89 billion in March 2021.

The foreign currency deposits called FCNR deposits saw maximum contraction.

They declined from $20.47 billion in March 2021 to $16.91 billion in March 2022.

Bankers said the change in global financial conditions and inflation would shape the future flow of deposits.

Remittances and interest rates in the domestic market would also have bearing on the activity of NRI deposits.

The money in rupee-denominated NRE deposits also shrunk to $100.8 billion in March 2022 from $102.57 billion a year ago.

In contrast, the money into non-resident ordinary accounts rose from $18.84 billion in March 2021 to $21.30 billion in March 2022.

The foreign exchange flow scenario has gone through major shifts after the Russian invasion of Ukraine in late February.

India’s foreign exchange reserves declined to $596 billion as on May 6, 2022.

They had increased by $30.3 billion to $607.3 billion in 2021-22.

During 2020-21, foreign exchange reserves increased by $99.2 billion to $577 billion in March-end of 2021.