NRI deposits touch Rs 2-tn mark in Kerala banks
Expats income are a boost for Kerala's economy
In 2020, NRI deposits in the banks in Kerala have crossed the Rs 2-trillion mark (Rs 2 lakh crore) for the first time, indicating expatriates' mentality to save more than spend in recent years. It took less than five years to touch Rs 2 trillion from Rs 1 trillion, despite many of the NRKs losing jobs in the Gulf economies in the last 3-4 years due to fall in oil prices. The NRI deposits in Kerala first crossed the Rs 1-trillion mark in March 2015. This meant it took over four decades for the NRI deposits to cross that figure, considering that the first set of emigrants from the state went to West Asia in the 1970s in search of jobs and to secure their families' future.
The NRI deposits should not be confused with remittances, which are foreign currency funds sent by the NRIs to their families and relatives for maintenance and upkeep. NRI deposits, on the other hand, are foreign currency deposits made in a bank in the country by a non-resident Indian, which can be repatriated on maturity.
According to the data available with State Level Bankers Conference (SLBC), the deposits touched Rs 1,99,781.27 crore on December 31, 2019, a growth of Rs 13,405 crore (7.19%) from December 31, 2018. This is shorter by about Rs 219 crore to touch the magical Rs 2 trillion-mark.Bankers said the milestone was crossed in the Jan-Mar 2020 quarter itself, going by the trend in NRI deposit growth in the banks.
Federal Bank sees 18.62 per cent growth in NRI deposits
For instance, Aluva-headquartered Federal Bank alone has seen its NR deposits growing by a healthy 18.62 per cent to Rs 60,273.83 crore in April-June quarter, or a growth of Rs 10,849.28 crore Y-o-Y. Thrissur-based South Indian Bank saw its NR deposits growing by Rs 2,783 crore or 13 per cent in the April-June 2020 quarter to Rs 24,661 crore. The NRI deposits grew at an anemic 1.43 per cent (Rs 2,818.11 crore) from Rs 1,96,963.16 crore in July-Sept quarter 2019 and in the June-ended quarter the deposits stood at Rs 192,254.44 crore.
"For the first time, the expatriate Keralites have realised the importance of savings. Earlier, most of the money they earn abroad will go to buy a house, refurbishing the house or to purchase some expensive electronic items," said S Irudaya Rajan, a migration expert and professor at the Thiruvananthapuram-based Centre for Development Studies (CDS).
"If you look at remittances to Kerala, we get about Rs 100,000 crore (Rs 1 trillion) every year. Due to the Covid-19 and return of Keralites from abroad, this year we may see a drop of Rs 10,000-15,000 crore. That's it." said Rajan, who has been studying Malayalis' migration since 1998. International Institute of Migration and Development director K V Joseph, while pointing out that the Covid-19 uncertainties came only since March this year, said the deposits in December may be due to the festival season.
"The uncertain times ahead means they will keep more money in the banks, rather than spend it," he said.
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