Kochi, 18 July (H.S.):Nearly three decades after Gulf-based Malayali expatriates emerged as the largest contributors to India's landmark Resurgent India Bonds (RIB) scheme in 1998, they are once again leading participation in a major foreign currency deposit programme.

This time, Non-Resident Indians (NRIs), particularly those living in the Gulf, have shown strong interest in the Reserve Bank of India's (RBI) Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit scheme. Attractive US dollar deposit rates offered by banks, coupled with regulatory relaxations introduced by the RBI, have encouraged expatriates to channel more of their savings into these deposits.

According to data as of March 31, 2026, total NRI deposits with banks in Kerala stood at ₹3.24 lakh crore, underlining the continued importance of remittances and overseas savings to the state's banking sector.

Federal Bank accounted for the largest share of these deposits at ₹92,326.10 crore, followed by the State Bank of India with ₹84,966.67 crore. South Indian Bank held NRI deposits worth ₹31,947.18 crore, while Canara Bank accounted for ₹23,351.92 crore and CSB Bank ₹5,431.74 crore.

Banking officials said a significant majority of the FCNR(B) deposits originated from Gulf Cooperation Council (GCC) countries, particularly the United Arab Emirates, Saudi Arabia, Oman, Qatar, Kuwait and Bahrain. Contributions from Europe and other overseas markets were comparatively lower.

The renewed interest has been driven by the RBI's special swap window for FCNR(B) deposits, which reduced banks' foreign exchange hedging costs and eased interest rate restrictions. These measures enabled banks to offer more attractive returns on foreign currency deposits while insulating investors from fluctuations in the value of the Indian rupee.

Joy P. V., Executive Vice President and Country Head – Retail Liability and Fee Products at Federal Bank, said the RBI's special FCNR(B) drive had created an attractive investment opportunity for expatriates by improving the economics of foreign exchange swaps.

Prashanth George Tharakan, Deputy General Manager and Head of NRI Business Relations at South Indian Bank, said banks were now able to offer higher interest rates on FCNR(B) deposits with maturities ranging from three to five years, making the scheme particularly appealing for overseas Indians seeking secure, dollar-denominated returns.

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Hindusthan Samachar / Arun Lakshman