Commercial banks are witnessing a sudden surge in deposits from Gulf-based non-resident Indians who are scared of evacuation in the wake of an impending US strike against Iraq.

"There is a spurt in NRI inflows from the Gulf as the war fears are escalating. Nobody is taking any chances. In the first war, they had burnt their fingers and they don't want a repeat of that," said a senior banker with a public sector bank, which is witnessing huge NRI deposit flows since the beginning of January. Another new private bank is also mopping up money in big quantities.

"At this rate, we will not be surprised if the country's foreign exchange reserves touch $80 billion by the end of the fiscal year," a treasury manager said. As on January 10, the forex reserves were to the tune of $71.347 billion. This is the world's seventh largest forex reserve.

The NRI population across the globe is around 20 million. About 15 per cent of this population is based in the Gulf region. There are three types of NRI deposits -- foreign currency non-resident (bank) or FCNR(B), non-resident (external) rupee accounts or NRE and non-resident (non-repatriable) rupee deposits or NR(NR)RD.

The total NRI deposit kitty stood at $26.72 billion in September. Since then, it may have risen to cross $30 billion, bankers said. As on September 30, FCNR(B) deposits were to the tune of $10.20 billion, NRE deposits $11.39 billion and NR(NR) RD $5.13 billion.

The non-repatriable deposits have actually shown an erosion between April and September last year. Of the three, NRE deposits have shown the maximum rise, by over $3 billion between April and December, riding high on the arbitrage opportunity.

The NRIs are getting at least 2.75 to 3 per cent higher interest rates by deployed money in India compared with the US interest rates.

Expatriates' remittances and rising trade inflows have helped the partially convertible rupee to rise 0.55 per cent against the dollar in 2002, its first annual gain in more than a decade, and 2.3 per cent from its all-time low hit in mid-May when it crossed 49 level.