Allaying fears, Non-Resident Keralites send in Rs 18,749 crore more to Kerala in pandemic year

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Kochi: Proving forecasts that the heavily remittances-dependent Kerala faces a harrowing financial future due to the likely plunge in money inflows due to pandemic-driven job losses wrong, the latest SLBC data show that Non-Resident Keralites (NRKs) have in fact sent in more money during the calamitous year than they did in 2019.

According to the data from the Canara Bank-led state level banking committee (SLBC) as of end-December 2020, the banks in the state had Rs 2,27,447 crore in non-resident deposits, while the same stood at Rs 2,08,698 crore in March 2020, when the problem began to appear in the country.

On an annualised basis, the same stood at a low Rs 1,99,781 crore as of end-December 2019.

During April-December 2020, non-resident deposits grew by Rs 18,749 crore in absolute terms, the same grew by Rs 27,666 crore on-year, according to the SLBC data as of December 2020, which updates data half-yearly.

However, the city-based Federal Bank, which is the second largest player in the non-resident deposits space in the state, attributes spike in numbers to lower withdrawals due to lockdowns and also because of the fall in the rupee and not necessarily driven by higher inflows.

“We haven’t seen a significant increase or fall in monthly remittances into our NRE & NRO accounts so far this financial year. Our NRE+NRO remittances are granular in nature from mass and mass-affluent customers typically,” Nilufer Mullanfiroze, the head of retail banking at Federal Bank, told PTI from Mumbai.

Our NRE+NRO SB book grew by 21% while resident deposits grew by 17%, but this is also due to the fact that avenues of spends have been lower during the pandemic, she added.

Sharing the numbers specifically for Kerala, she said 70% of savings bank account of Rs 45,000 crore is from Kerala and within NRE+NRO deposits as much as 90% of the book is from the home state and 60% of the resident deposits are also from the state, she said.

She also pointed out that Federal Bank being mid-category banker, the impact of job loss is less on its books. Most of its customers from the Gulf are nurses, engineers who have not lost their jobs she said, adding however, the overall inward remittances through exchanges into the state has crossed the Rs 1 lakh crore-mark in 2020.

In January, PTI had reported quoting official data from the Norka that as of January 7, as much as 8.7 lakh NRKs (non-resident Keralites) had returned to the state from overseas, mostly from the Gulf since the first week last May. What was more, in a job-starved market like Kerala, a vast majority of them (5.7 lakh) had come back after losing their jobs, ringing alarm bells in the government corridors and among the planners.

More than a fourth of the over 10 million Indians in the Gulf are from Kerala and of them around 7.5 lakh had returned to the state which heavily depends on their remittances, making it the highest in history since the Gulf boom started in the late 1950s, show data from the Norka (Non-Resident Keralites Affairs).

The same data also showed that 1,11,151 of the 13,27,330 returned from within the country cited job loss as the reason for their return. Overall, 21.89 lakh Keralites had returned to the state.

According to Norka, 40 lakh Keralites are living/working abroad and 13.73 lakh elsewhere in the country. The state has a resident population of 3.48 crore.

This has created panic in the government fearing money flow would be choked which if did will hamper the mostly consumption-driven economy battered by the pandemic to take a harder hit.

Further fuelling the worry was the World Bank forecast of a steep 23-25% plunge in remittances in 2020 into the country, which is led by Kerala with the highest share nationally.