NRI deposit base of the country for the period between April to December 2010 has shown a decline with non residents figuring out better opportunities of investment in the developed nations.
There has been a 34% decline in NRI deposits in India in this period taking the total figure to $2.3 billion from $3.5 billion a year earlier, read RBI data.
Decline in currency inflow has been observed in both foreign currency non resident-banks , or FCNR(B), and non-resident external rupee accounts, or NRE (RA), the two repatirable schemes of deposits in India.
"An appreciating rupee always disincentivises NRIs in parking their fund in rupee-denominated instruments," said United Bank of India chairman and managing director Bhaskar Sen. "Such behaviour is especially true for NRIs who do not look for repatriation benefits," he added. This can be considered as a reason to some extent for the slowdown in NRO deposit flow.