KOCHI: One in six rupees in foreign exchange deposits in the country’s banks is in Kerala, making it the state with the largest amount of NRI deposits.
Out of the total NRI deposits of Rs 6,04,873.5 crore (Rs 6.04 trillion) in Indian banks, the foreign exchange deposits in Kerala alone constituted Rs 1,04,573.76 crore (Rs 1.04 trillion) at the end of December 2014. This is the first time NRI deposits to Kerala crossed the Rs 1-trillion mark.
The NRI deposits in Gujarat, which has a comparitively larger number of people placed in better jobs (or doing business) in developed countries like the US and Canada, are much less. At the end of December 2014, the NRI deposits in Gujarat banks stood at Rs 49,722 crore, a decline of Rs 9,890 crore from the September 2014 figure of Rs 59,612 crore.
Surprisingly, the NRI deposits in the banks in Kerala rose by Rs 7,107.72 crore from Rs 97,466.04 crore in September 2014, notwithstanding the fact that several hundreds of Keralites had returned from the war-torn countries, including Iraq, Libya and Yemen, in the last several months. From March 2014, there has been an increase of Rs 10,690.24 crore in NRI deposits in Kerala.
According to S Irudaya Rajan, professor at the Centre for Development Studies in Thiruvananthapuram and author of publications on labour migration from Kerala to the Gulf, the NRIs from Gujarat and Punjab do not send money to their native place, while expatriates from Kerala diligently send money back home as the families are dependent on them for daily expenses. “Most of the NRIs from Gujarat and Punjab are settled in countries like the US, Canada and Australia. Perhaps, they may be making investments in India, but that is reflected as business investment,” he explained. It is reckoned that there are about 1.6 million expatriates from Kerala living across the world, mostly in West Asia.
In addition to the NRI deposits, there are remittances coming to Kerala through various foreign exchange money transfer companies such as UAE Exchange, Western Union and commercial banks. “A large section of the people doing lowskilled jobs in the Gulf also sends money back home through their friends and relatives. There is no data on such money coming into the state,” Rajan pointed out.
“The high rate being charged for sending money is forcing them to do such an exercise,” he said. As per the World Bank’s Migration and Development Brief, India, with the world’s largest emigrant stock of 14 million people, attracted about $71 billion (Rs 39,050 crore) in remittances in 2014. A major chunk of this amount came to Kerala, though there are no official figures available. The G20, at its meeting in Australia in November last year, had decided to bring down the cost of remittances to 5 per cent from as high as 10 per cent in some countries.
M V George, of UAE Exchange, said the cost of transaction was much less than 5 per cent. “We charge per transaction and not based on the amount,” he said. According to World Bank, the average cost of sending money from the UAE, which has the highest number of employed Keralites, was 2.91 per cent in the January-March 2015 period. The cost of money transfer from Saudi Arabia, which also has a large number of Keralites employed there, is 4.88 per cent. “It’s high time the banks conduct ed a study to find out the exact volume of remittance made to Kerala and the cost involved,” said Rajan.