Bank deposits hit decade-high growth as NRI dollar inflows cross $37 billion

Synopsis

Bank deposits saw their fastest growth in nearly ten years by July. Overseas Indians deposited about $37 billion in foreign currency accounts. Bank credit growth also accelerated to its fastest pace since June 2024. This surge was driven by corporate demand and MSME lending programs. India garnered nearly $41 billion in total inflows by July 31.

Bank deposits saw their fastest growth in nearly ten years by July

Kolkata: Bank deposits rose 15.4% year-on-year at the end of July, marking the fastest pace in nearly 10 years, as overseas Indians parked about $37 billion in foreign currency-linked non-resident deposits in less than two months since the Reserve Bank of India created a special window to attract dollar inflows.

Bank credit growth also accelerated to 19.4% during the same period, marking the fastest pace since June 14, 2024.

Deposits mobilised by scheduled commercial banks had recorded faster growth on December 9, 2016, when the growth rate stood at 15.9%, after which it remained below 15.4%, past data showed.

Also Read: RBI's FCNR(B) scheme attracts $41 billion, Jefferies says inflows may double to $80-100 billion

India garnered nearly $41 billion in inflows till July 31, driven largely by foreign currency non-resident bank (FCNR-B) deposits, which accounted for $36.72 billion following the scheme's introduction in June. FCNR-B inflows have already exceeded the $26 billion the country mobilised under a similar scheme in 2013. The present scheme will end on September 30, 2026.

Banks are otherwise facing challenges in mobilising deposits locally as savers are exploring other market-linked investment products to maximise yields.

Outstanding deposits stood at Rs 269.4 lakh crore at the end of July, compared with Rs 233.5 lakh crore as of July 25, 2025. Outstanding bank credit stood at Rs 220.8 lakh crore, compared with Rs 185 lakh crore, RBI data showed.

Also Read: Banks continue to garner FCNR deposits at a brisk pace

On the assets side, the faster growth rate was primarily driven by renewed corporate demand, as higher bond yields forced companies to shift their focus towards borrowing from banks. Banks have also increased lending to the micro, small and medium enterprises (MSME) sector using the government-backed financial assistance programme unveiled to provide fully or partially guaranteed additional funding in response to the West Asia crisis.