Distress signs visible as expatriates dip into non-resident deposits in Kerala's banks

Experts said that the decline indicates that expatriates are dipping into the reserves as a large number of them have returned to the state following job loss, mostly from West Asian countries.

Published: 17th January 2022 03:16 AM  |   Last Updated: 17th January 2022 03:16 AM   |  A+A-

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Express News Service

KOCHI: Bank deposits by non-resident Keralites have declined, perhaps for the first time ever, indicating a distress in the sizeable expatriate community in the state. The NR deposits in Kerala banks have declined by Rs 593 crore to Rs 235,897 crore for the quarter ending September 2021 from the previous quarter, as per the figures made available on Saturday.

Experts said that the decline indicates that expatriates are dipping into the reserves as a large number of them have returned to the state following job loss, mostly from West Asian countries, in the last two years. As of July last year, about 15 lakh Keralites have returned to the state from across the world since the first week of May 2020. Of this, 10.45 lakh have cited "loss of job" as the reason for their return. 

NR deposits have been growing consistently in Kerala banks despite the recent shift in the pattern of the Malayali workforce in the Gulf countries, focusing more on white-collar jobs, where the opportunities are less.

The NR deposits have shot up by a whopping Rs 54,867 crore from Rs 181,623 crore in September 2018 to Rs 236,490 crore in June 2021, before declining for the first time in the September 2021 quarter.The NR deposits should not be confused with remittances, the experts said. 

NR remittances are foreign currency funds sent by the NRIs to their families and relatives for maintenance and upkeep while NR deposits are foreign currency deposits made in a bank in the country by a non-resident Indian, which can be repatriated on maturity.

"The pandemic has disproportionately impacted Kerala migrants, especially those in the Gulf. This is evident from the remittance pattern since early 2020. Many lost jobs or suffered salary cuts and a substantial number, about 15 lakh, has returned to Kerala since the outbreak. All of these have contributed to a fall in remittances and consequently in NRI deposits in Kerala," said Divya Balan, assistant professor and a migration expert at  FLAME University, Pune. 

She said that since this pandemic-induced return migration was unanticipated and unplanned, many returnees are forced to withdraw money from their NR accounts for their living expenses as in many cases migrants had to leave Gulf without receiving their benefits. "Some withdrew funds for starting small-scale enterprises for sustenance due to the uncertainty of remigration to the Gulf or elsewhere," said Balan.

Joseph KV, a director of Thiruvananthapuram-based International Institute of Migration and Development, reckoned the pattern of decline in NR deposits to continue for some more quarters before stabilizing and even growing again.

"What we are now seeing is due to the return of expats from the Gulf countries. But, we are also seeing a large number of people migrating from Kerala to the US, Canada, Australia, and Europe in recent times. So, I expect these people to start sending money back home in the next one or two years' time," he said.

According to the government agency NoRKA Roots, there are about 40 lakh Keralites outside the country. It does not, however, have the data on the expats who have migrated back, or returned to their overseas destinations.


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