NRI deposits in Kerala banks have increased by 10% in the last fiscal year, despite the return of hundreds of thousands of expatriates due to the crisis following the pandemic. Domestic deposits also grew by 12 percent over the same period.
According to data provided by the state level bankers committee for the 2020-21 fiscal year review, which was held last week, NRI deposits in Kerala banks reached 2,29,636 crore. as of March 31, compared to Rs. 2,08,698 crore on the corresponding day in 2020. A similar growth pattern – 10% – was reported in fiscal year 2019-2020.
Meanwhile, domestic deposits reached Rs 3,768,278 crore as of March 31, compared to Rs 3,35,674 crore on the corresponding day in 2020.
NRI deposits are foreign currency deposits deposited in an Indian bank by non-resident Indians. NRI deposits are different from remittances, which are foreign currency funds sent by NRIs to their families back home and are not repatriated like NRI deposits.
In the past year, 10 lakh people who returned to Kerala from abroad – most of them from the Middle East – reported the loss of their jobs as the reason for returning to the country. There have been concerns that the return of expatriates will have an impact on the state’s economy, as the money sent by expatriates is seen as the lifeline of Kerala’s economy.
A few factors have been attributed to the increase in NRI deposits in Kerala despite the crisis triggered by the pandemic.
Senior Banker S Adikesavan said: “NRIs who have returned from a pandemic may have transferred their deposits held in overseas accounts to a domestic or state bank. Back home, transactions such as real estate were virtually nil due to the foreclosure, which ensured that those NRI deposits remained parked in banks. “
Adikesavan said NRIs returning to Kerala would have had some degree of uncertainty about their return overseas. This would encourage NRIs to transfer their deposits from abroad to their home country. In addition, the depreciation of the rupee has contributed to the increase in the flow of NRI deposits.
However, the growth of domestic deposits has been attributed to different factors. According to Adikesavan, the working class or fixed income groups could save more money, as spending or consumption has dropped significantly due to the foreclosure restrictions.
“In addition, direct cash transfers from the state as well as central governments in various programs have also contributed to an increase in domestic deposits. We have about 37 lakh bank accounts in Kerala which receive Rs 6,000 in one year from Pradhan Mantri Kisan Samman Nidhi. In addition, the state government credited social pensions to 50 lakh recipients without any arrears, ”he said.