Deposits by NRIs at banks in Kerala have grown by 10 per cent in the last fiscal, notwithstanding the return of lakhs of expatriates due the crisis in the wake of the pandemic. Domestic deposits have also registered a growth of 12 per cent in the same period.
As per the data furnished by the state-level bankers committee for the review of the financial year 2020-21, which was held last week, NRI deposits in banks across Kerala have reached Rs 2,29,636 crore as on March 31, as against Rs 2,08,698 crore on the corresponding day in 2020. A similar pattern of growth — 10 per cent — was reported in the fiscal 2019-20.
Meanwhile, domestic deposits have reached Rs 3,76,278 crore as on March 31, as against Rs 3,35,674 crore on the corresponding day in 2020.
NRI deposits are foreign currency deposits parked in an Indian bank by non-resident Indians. NRI deposits are different from remittances, which are funds in foreign currency sent by NRIs to their families back home and are not repatriated like NRI deposits.
Over the last one year, 10 lakh people who returned to Kerala from abroad — most of them from the Middle East — have stated loss of job as the reason for their return to the country. It has been feared that the return of expatriates would impact the state’s economy as the money expatriates sent is reckoned as the lifeline of Kerala’s economy.
A couple of factors have been attributed for the rise in NRI deposits in Kerala despite the pandemic-triggered crisis.
Senior banker S Adikesavan said, “NRIs who have returned in the wake of pandemic might have transferred their deposits held in accounts abroad to a bank in the country or the state. Back home, transactions such as real estate have been virtually nil due to the lockdown, which ensured that these NRI deposits remained parked in the banks.”
Adikesavan said that NRIs returning to Kerala would have had a certain degree of uncertainty about flying back abroad. That would prompt the NRIs to transfer their deposits from abroad to their homeland. Also, the depreciation of the rupee has contributed to the increased flow of NRI deposits.
However, the growth of domestic deposits has been attributed to different factors. According to Adikesavan, the salaried class or fixed income groups could save more money as spending or consumption has come down considerably due to the lockdown restrictions.
“Besides, direct cash transfers from the state as well as the Central governments in various schemes have also contributed to an increase in domestic deposits. We have around 37 lakh bank accounts in Kerala which get Rs 6,000 in a year from the Pradhan Mantri Kisan Samman Nidhi. Also, the state government has been crediting the welfare pensions to 50 lakh beneficiaries without any arrears,” he said.