Kerala remittances hit record on weak rupee

Non-resident Indians (NRIs) from the Gulf and across the world are remitting record sums of money into India as the rupee has seen massive declines in the past few months.

According to data published by State Level Bankers’ Committee, Kerala, non-resident deposits with banks in Kerala has shot up from Rs556.63 billion (Dh32.74bn) in June 2012 to Rs758.83bn (Dh44.63bn) in June 2013, an increase of more than 36 per cent year-on-year.

This suggests that there has been a record in remittances this year, with the first six months of 2013 witnessing an increase of over 21 per cent in non-resident deposits with Kerala banks, up from Rs627bn (Dh36.88bn) at the end of 2012.

Notwithstanding the amount of money remitted to personal family accounts and spent within the local economy there, the amount of non-resident deposits went up by about Rs132bn (Dh8bn) in the first six months of 2013, data shows.

Kerala is among the largest recipient states of India, benefitting from money sent by an estimated 2.5 million non-resident Keralites, most of whom live and work in the Gulf region.

According to the Kerala Migration Survey published in September 2012, remittances from emigrants abroad to Kerala in 2011 were estimated to be approximately Rs49.69bn compared with Rs43.29bn in 2008.

According to KMS, remittances per household worked out Rs63,315 in 2011 compared with Rs57,227 in 2008.

Considering that remittances increased by 15 per cent CAGR during 2008-11 even when the rupee wasn’t declining at the rate that it has been in the recent past, experts believe that remittances to Kerala are set to make an all-time high by the end of 2013 as the rupee remains under duress despite its advances last week.

Remittances to Kerala peak during Onam and Christmas, and experts maintain that the impact on remittances of both these festivals will be huge this year, considering the favourable rupee exchange rate for non-resident Indians.

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