When the managers of the nation’s economy scramble to lift the nose-diving rupee, many in dollar-rich Pathanamthitta are laughing all the way to the bank.
Non-Resident Indian (NRI) remittances are shooting up in the district as the dollar and other foreign currencies pegged to the U.S. currency appreciate against the rupee.
Many banks in the district, especially in the NRI belt of Thiruvalla, Kumbanad and Kozhencherry, have crossed their annual target for NRI deposit mobilisation already in the first quarter of the financial year.
Indian emigrants in West Asia are parking their money in banks in their home district to cash in on the plunge of the rupee.
Varghese Alexander, a chartered accountant in Thiruvalla, sees little impact of the economic slowdown in the NRI belt of Pathanamthitta.
Enough money
“Here, everybody has got enough money to meet their daily needs. I do not see any unemployment here. In fact, labour shortage, especially of skilled labour, and the resultant high labour cost are problems facing this NRI belt. People are ready to pay whatever money the traders demand. The NRI belt of Thiruvalla, Kumbanad and Kozhencherry has got at least one person from each household working abroad,” he says.
Opening of jewellery and textile showrooms and the launch of apartment projects point to a business boom, Mr. Alexander says.
A top executive of a leading public sector bank says banks in Thiruvalla have been witnessing a huge flow of remittances from the Malayali diaspora in West Asia, the U.S., Australia and the U.K. and other European countries.
Certain banks here have got high-net-worth customers who remit Rs. 2-3 crore at a time to their accounts.
The usual trend among the average NRI customers is to deposit Rs. 10-20 lakh, he says. As many as 38 banks have 52 branches in the three-sq.km municipal limits of Thiruvalla, and all are racing to meet their NRI deposit mobilisation target.
M. Mathews, popularly known as “Toyota Sunny,” a businessman in Kuwait from Eraviperoor, near Thiruvalla, is unhappy with the business style of various banks in the district. “Banks in Pathanamthitta have got huge savings. They conduct mega NRI meets to mobilise money and swell their coffers. But deposits alone, without its effective utilisation for regional development and national development at large, is not going to help the rupee,” he says.
India, he says, cannot step up its exports without governmental support.
If the present crisis continues, the rupee may plunge to Rs. 75. Rahul Ramakrishna from Changanassery, a mechanical engineer and mechanical division head of a prominent multinational company in Dubai, says the appreciation of the dollar has enlivened the hopes of NRIs.
Cheap credit
“Indian emigrants here are keen to park as much money as they can in their bank accounts in India. Emigrants at senior positions of various companies can get credit at a cheap processing charge of two per cent or three per cent and there are many who suitably utilise this opportunity in building their assets,” Mr. Ramakrishna says.
(Borrowing huge sums abroad at abysmally low interest rates and depositing it in India is a way to make a killing, but it is fraught with risks.)
Thomas George from Eraviperoor, who runs an agency of the American Family Insurance Company in Chicago, is not that much happy with the present trend of depositing dollars in Indian banks. Mr. George says the ever-shooting cost of living is a problem confronting both the NRIs and the middle-class people in a place like Thiruvalla.
“We have to pay almost the dollar equivalent for fish and various other food products in the Thiruvalla market. Moreover, life is becoming more and more insecure in Kerala with the growing communal divide, growing crime rate and negative politics, badly affecting social security,” he says.
Mr. George says there were emigrants in their seventies in the U.S. who prefer to return home as they find it difficult to pull on with their monthly pension of $2,000 or $2,500 in the U.S. They prefer to buy apartments in their home State to spend some time there every year,” he says.
Little advantage
“Indian immigrants in the U.S. have got little advantage with the conversion of dollar to rupee even at this heavily appreciated rate. If I am getting Rs. 61 for a dollar now, the dollar rate is likely to go up further touching even Rs. 80 to Rs. 100 in future. In that case, I will have to repurchase the dollar after 10 or 12 years at a much higher price which is not at all a desirable thing.”
P.V. Ashok, Chief Manager of Dhanlaxmi Bank, says, “Banks in this part of the State have been celebrating ‘NRI season’ during Ramzan when schools remain closed in the Gulf countries, and we get comfortable remittances from NRIs during the period.”
M. Salim, president of the Thiruvalla Merchants’ Association, says frequent hartals have become a bane of Kerala. The otherwise calm Pathanamthitta district has witnessed 20 hartals in the past six months. The major textile-jewellery groups are the worst affected. Pathanamthitta, especially its commercial headquarters of Thiruvalla, has been witnessing a rapid growth in apartment business for the past two years. Prominent builders have launched luxury apartment projects .
Sajikumar, finance manager of Silver Builders, says as many as 30 flat systems, majority of them of the luxury category, with a total of no fewer than 1,000 residential apartments at costs between Rs. 2,500 to Rs. 3,700 a sq.ft, have come up in an area of four sq.km in Thiruvalla alone.
