New Delhi: Despite the geopolitical uncertainties in the Middle East and Gulf countries rising from the West Asia Crisis, the remittances from non-resident Indians into Kerala has remained unaffected data from leading banks operating in the state reveal, reported Economic Times .
According to data from the Kerala-based Federal Bank and South Indian Bank the quarter-on-quarter growth in non-resident deposits inflow indicates that the flow of money has remained steady despite the war. At present, remittances and overseas deposits contribute significantly in Kerala's economy.
However, the fact that rupee has depreciated by 5.4% between January and March also has to be taken into consideration, as a depreciating local currency automatically translates into higher remittances on the same base amount, the ET report added.
The remittances comprise the surplus money deposited by Indians working abroad in non-resident external (NRE) accounts in banks operating in India, and the remittances to family members for monthly expenses using online platforms or bank wire transfers. In both instances, the money deposited in foreign currency gets converted to rupee.
While the Federal Bank’s non-resident deposits grew 7% quarter-on-quarter to Rs 1.03 lakh crore at the end of March, South Indian Bank reported a 4.2% growth in inbound flows to Rs 35,371 crore growth for the same period, reported Economic Times.
“Remittances, as of now, remain elevated. My sense is that unless you see significant job losses and returning Indians from UAE for good into India, I don’t think this story is likely to change immediately,” Federal Bank managing director KVS Manian told analysts in a post-earning interaction, reported ET.
As per Reserve Bank of India (RBI) data, more than a third of India’s remittances, totalling Rs 3.74 lakh crore in 2023-24, came from Gulf countries such as the UAE, Saudi Arabia, Qatar, Kuwait and Oman.