The falling rupee coupled with the recent Reserve Bank of India move to hike interest rates on NRI deposits is likely to boost remittances further from the large Gujarati diaspora, mainly concentrated in the US and Europe.
Gujarat is among the top states along with Kerala, Punjab and Maharashtra to receive large remittances. Dr Sudhir Parikh, a Padma Shree awardee and former president of Federation of Indian Associations, New York and Indian American Political Forum, says the falling rupee will lead to increased remittances to Gujarat in the near future.
On Friday, as the rupee weakened further to 52.25/26 against the dollar, the Union foreign affairs ministry said India received $55.9 billion in remittances in 2010-11, an increase of $2 billion compared to the previous year. This was more than the World Bank projections of $55 billion.
Sensing a business opportunity, several banks have launched schemes to lure NRG customers. The special offers include free domestic airline tickets when opening an NRI account. Like Parikh, who was in Ahmedabad to receive an award, a large group of NRGs who usually flock to home during winters say they were planning to shift their deposits to Indian banks.
Arun Tyagi, chief manager, Bank of Baroda, said, “NRGs are shifting money to India to gain from temporary currency fluctuations.” RBI officials too confirm the trend. “There is an annual rise of about 20% in remittances to Gujarat during December to February, also known as the NRI season. This season it is expected to rise substantially,” said Vandana Mehta, incharge of NRI cell, Union Bank.
“With the continuing fall of rupee, many like me who have worked hard and saved money abroad will opt to get their savings remitted to India,” says Ghyanshyam Thakkar, an NRG, who is considering returning to Ahmedabad soon. J Patel, an official of State Level Bankers’ Committee, says, “We expect a sudden rise in remittances in Gujarat given the high number of expatriates from the state.”
