After more than a decade, India is once again turning to its 35 million-strong diaspora for support. This time, banks are mounting a global campaign to attract more than $50 billion in deposits from overseas nationals as policymakers seek to bolster foreign exchange reserves and support a battered rupee.
The pitch is simple: guaranteed returns of as much as 7.1% on dollar deposits, with lenders deploying relationship managers across Dubai, Singapore and London to drum up interest. Social media promotions and advertisements are targeting an increasingly affluent diaspora that sent home record sums last year.
Atul Sinha, a Dubai-based non-resident businessman, said he had been approached by at least two state-run banks and a foreign lender with Indian operations. The sales pitch arrived through phone calls, emails and text messages touting the deposits as a tax-free, low-risk home for cash amid market volatility. And for a product that rarely generates much excitement, the response has been unusually enthusiastic.
“I plan to park funds there,” he said. “Given volatility in crypto, equities, and real estate, this foreign currency deposit offers fixed returns and stability,” he added. Sinha said he is likely to park his money with a bank that has a global presence.
Typically seen as a vanilla banking product, Foreign Currency Non-Resident (Bank) deposits have morphed into a full-scale sales drive. Banks are mobilizing relationship managers and ramping up outreach across key expatriate hubs, especially non-resident Indians (NRI) in the Middle East.
“Not just Dubai — NRIs everywhere,” said Arjun Mittal, Dubai-based chief investment officer at multi-family office Abbey Road. “We’ve seen interest from people in London, Singapore and anywhere else where NRIs have access to these products. It’s a very popular tool. This time, it could easily exceed $50 billion.”
The drive revives a playbook last used by lenders during the 2013 taper tantrum, when India mobilized about $34 billion to stem the rupee’s decline by tapping the diaspora. Remittances from non-resident Indians already rank among the world’s largest, and policy makers are betting that higher deposit rates can lure them at a time when capital inflows are under slowing.
India saw inflows topping $155 billion in 2025-26 via remittances. Add another estimated $50 billion from this scheme which will run until September, and the country is potentially looking at inflows of at least $150 billion this year. While Gulf Cooperation Council countries have historically dominated India’s inward remittances, advanced economies now contribute more.
The latest move follows a decision by the Reserve Bank of India last week to absorb the hedging costs incurred by banks that raise dollars overseas and bring them home by Sept. 30. The measure gives lenders more room to offer attractive rates on foreign currency deposits and is part of a broader effort to boost foreign capital inflows.
The rise of social media and the expansion of wealth-management units of private sector lenders such as HDFC Bank Ltd., Kotak Mahindra Bank Ltd. and JPMorgan Chase & Co. and HSBC Holdings Plc, have given the campaign far greater momentum by helping banks target wealthy overseas Indians.
Smaller private sector banks are offering as much as 7.1% on five-year dollar deposits, while large lenders are paying up to 6% on similar tenures. To extend outreach beyond its own channels, AU Small Finance is leveraging print and digital media, turning to airport branding and launching targeted campaigns in key NRI markets, said Manoj Tibrewal, group head of marketing at the bank. In comparison, banks in the UAE can sometimes offer interest rates of as much as 5% for deposits under some circumstances for specific tenors.
For many overseas Indians, the pitch is to keep savings in dollars while earning returns that compare favorably with many alternatives. HSBC is promoting the deposits on Instagram with the slogan “Keep the currency. Grow the value”, while AU Small Finance is urging customers to turn their “global earnings into smarter India returns.”
And while there is a view that these highly-priced deposits will help India tide over the latest bout of foreign exchange outflows, analysts say, New Delhi will need to pursue further reforms, including on taxation, to create more stable and durable external buffers.
“Remittances are a function of global conditions more than domestic factors,” said Gaura Sengupta, chief economist at IDFC FIRST Bank. “Sustenance of remittance flows depends on global labor market and immigration policies in developed market economies.”
Source: The Financial Express
