Overseas Indians made net withdrawals of nearly $2 billion from their domestic bank accounts in March amid the Iran war, according to Reserve Bank of India (RBI) data. The outstanding non-resident Indian (NRI) deposits stood at $165.65 billion at the end of March, down from $167.58 billion a month ago. This significant outflow occurred during a period of heightened geopolitical tensions in the West Asian region, with the Iran war affecting money flows from overseas Indians. The fall was mainly seen in non-resident external rupee accounts (NRERA) and non-resident ordinary (NRO) accounts, where withdrawals were higher than fresh deposits during the month.
The March outflow contributed to a contraction in NRI deposit inflows to $14.41 billion in 2025-26 from $16.16 billion in the preceding fiscal year, as reported by RBI data. Senior bank executives and economists expect the geopolitical uncertainties to have a more pronounced impact on NRIs in the long run. South Indian Bank managing director PR Seshadri noted that the NRI deposit flow is likely to be impacted more if the West Asia conflict continues over a longer period.
The outflows were recorded in non-resident external rupee accounts (NRERA) and non-resident ordinary (NRO) accounts, while foreign currency non-resident bank (FCNR(B)) accounts remained steady. According to RBI data, outstanding NRERA deposits stood at $98.56 billion at the end of March, down from $99.77 billion a year ago, while outstanding NRO deposits amounted to $33.33 billion against $34.09 billion. In contrast, outstanding FCNR(B) deposits stood at $33.76 billion against $33.72 billion. Bankers noted that NRERA and NRO accounts are mostly used by Indians working abroad, especially in Middle Eastern countries, while FCNR(B) accounts are generally used by Indians settled overseas, particularly in Western countries.
