The fall of the rupee is a cause of concern for the government, import sector and the people at large. But the non-resident Indian community members who send money home have reasons to be merrier. Their remittance will gain more value at home. It is a reason for them to send bundles of cash home, helping banks to fatten their Non-Resident External (NRE) accounts
About 85 per cent of the remittances are carried out through banks while the remaining business is done by recognised money transfer companies. Last year, the Reserve Bank of India raised the number of transactions that an individual can benefit from an external money transfer from 12 to 30 per year. The cap on a single transaction had been raised to $2,500. The move had facilitated the NRIs to send more money home.
The fall of the rupee is reflected in the increase in remittances, especially from those in the Gulf countries, said to Shyam Srinivasn, MD and CEO of Federal Bank. The NRI remittances had shown an increase during the past three-four months.
There was an annual growth of 28.55 per cent in the NRE deposits in Kerala in 2012, as per the State Level Banking Committee report. The NRE deposits had gone up from Rs. 37,690 crore in 2011 to Rs. 48,454 crore in 2012. The share of NRE deposits as on March 2012 too recorded significant growth. State Bank of Travancore’s share was 29.19 per cent while Federal Bank’s share was 15.15 per cent. The NRE deposits accounted for 8.04 per cent of deposits in the case of SIB. NRE deposits accounted for about 25 per cent of the total bank deposits in Kerala.
The inward remittances had been going up for the past few months as significant depreciation of the rupee had begun three to four months ago, said George Antony, Country head of UAE Exchange. The rupee closed at a record low of 59.57 on Thursday after recovering from 59.93 earlier in the day.
About 60 per cent of the cash-to-cash money transfer originated from UAE, said Jose Allesh, Head, Remittances, Muthoot Money Transfer. The remittances had gone up by 10-15 per cent in recent months, he said.