Deposits by NRIs in banks in Kerala have grown by 10 per cent in the last financial year, despite the return of lakhs of migrants due to the crisis in the wake of the pandemic. Domestic deposits have also registered a growth of 12 per cent during the same period.
According to data submitted by the State Level Bankers’ Committee for Review of Financial Year 2020-21, which was conducted last week, NRI deposits in banks across Kerala have reached Rs 2,29,636 crore as on March 31, while Rs. 2,08,698 crore on the same day in 2020. A similar pattern of growth – 10 per cent – was recorded in FY 2019-20.
Meanwhile, domestic deposits reached Rs 3,76,278 crore on March 31, as against Rs 3,35,674 crore on the same day in 2020.
Foreign currency deposits held by NRIs in Indian banks are NRI deposits. NRI deposits differ from remittances, which are money in foreign currency sent by NRIs to their families back home and are not repatriated like NRI deposits.
In the past one year, 10 lakh people who have returned to Kerala from abroad – most of them from the Middle East – have cited job losses as the reason for their return to the country. It is feared that the return of migrants will affect the economy of the state as remittances abroad are considered as the lifeline of Kerala’s economy.
Certain factors have been attributed to the increase in NRI depositors in Kerala despite the crisis triggered by the pandemic.
Senior banker S Adikeshavan said, “NRIs who have returned in the wake of the pandemic must have transferred their deposits deposited in accounts abroad to any bank in the country or state. Back home, transactions like immovable property have become almost nil due to the lockdown, which has ensured that these NRI deposits remain standing in banks. ,
Adikeshavan said that NRIs returning to Kerala will have some degree of uncertainty about going back abroad. This will encourage NRIs to move their deposits from abroad to their homeland. Also, the rupee’s depreciation has contributed to the increasing inflow of NRI deposits.
However, the growth in domestic deposits has been attributed to various factors. According to Adikeshavan, the salaried class or fixed income group can save more money as spending or consumption has come down significantly due to the lockdown restrictions.
“Besides, direct cash transfers from state as well as central governments in various schemes have also contributed to the increase in domestic deposits. We have about 37 lakh bank accounts in Kerala, in which we get Rs 6,000 annually from the Pradhan Mantri Kisan Samman Nidhi. Also, the state government is depositing welfare pension to 50 lakh beneficiaries without any arrears,” he said.
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