NRI deposits Rs 2 trillion in Kerala’s banks

The effects of corona are still adhering the market conditions. In such ups and down in the market, Non Resident Indians poured in almost $2 billion in April in rupee deposits as they chased higher returns

NRI deposits Rs 2 trillion in Kerala’s banks
NRI deposits Rs 2 trillion in Kerala’s banks

The  effects  of corona  are still adhering the market  conditions. In such ups and down in the market, Non Resident Indians poured in almost $2 billion in April in rupee deposits as they chased higher returns even as interest rates plunged to near zero in all developed nations. This is the highest single month flow in 26 months. 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 NRI 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.

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. 

Non resident rupee deposits tend to spurt when the rupee weakens. In April, the rupee was at a low of Rs 76 per dollar and among the worst performing currencies in the emerging markets. As the economy has shown some signs of improvement since May, the rupee did not weaken much since then. As the inflows improve as reserves have already crossed the half trillion dollar mark, the rupee could strengthen further.

 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).