The rupee’s fall poses problems to the economy, but the non-resident Indians are benefited from the depreciation because they get a higher amount of money at home whenever an overseas money transfer takes place. The banks and money transfer agencies have recorded higher volumes of transaction ever since the rupee weakened in the money market.
About 85 per cent of the remittances to India happen through banks. SBT, SBI, Federal Bank are among banks which receive substantial amounts as remittances in Kerala. Western Union, Muthoot Money transfer and a host of other players are engaged in money transfer activities in the non-banking sector.
Federal Bank has recorded over 15 per cent growth in the NRI remittances in the four-month period from April to July this year, compared to the same period last year. The remittances received by the bank in June and July this year were Rs.4,211 crore and Rs.3,756 crore respectively in comparison to Rs.3,103 crore and Rs.2,664 crore during the corresponding period last year. The bank received Rs.14,221 crore remittances during the four-month period (April-July) this financial year in comparison to Rs.12,327 crore received during the corresponding period in the previous fiscal. But there has been no sudden spurt in the remittances in the recent days corresponding to the change in dollar-rupee exchange rate, according to the bank.
The festival season generally witnesses a hike in the remittances, says Jose Allesh, head of Remittances Division, Muthoot Money Transfer. There has been an increase of 12-20 per cent in the remittances in recent months, he says. Many of the Non-Resident Indians in the Gulf countries had already remitted money prior to the festival season. Usually, there is a dip in the remittances in the post-Eid season, but this time, there has been a 5-10 per cent increase, he says.
The remittances in the NRE accounts of banks have been registering a growth in recent years. The NRE deposits in Kerala grew by Rs.4,8454 crore in 2012, registering a growth rate of 28.55 per cent, according to State-level banking committee report.
Last year, the Reserve Bank of India had permitted Indian agents under the money transfer service scheme (MTSS) to increase the number of remittances to be received by a single individual beneficiary in a calendar year from 12 to 30. The cap on a single transaction was also raised to $2500, which enabled remitters to increase the annual remittances to $75,000 from $30,000 permitted earlier.