Thursday April 26, 03:28 AM
Big expats party of Kerala banks ends
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By M Sarita Varma
The big banquet seems ending for expats-leaning Kerala banks. At Rs 32,955 crore (as on December 2006), NRI deposit growth of the banks in the state have entered an unprecedented plateau, reveal the latest banking statistics. Just about Rs 3,314 crore was added to the NRI kitty of Kerala banks in the period between December 2005 and December 2006. This is when, in the domestic deposits segment, the corresponding annual addition was as lavish as Rs 9,579 crore. This spurt was more than double that of the increase in the previous fiscal. Although the NRI deposits are growing, experts agree that the tardy rate of growth is not one that befits the segment that was once the racecourse of Kerala banking. An year ago, NRI deposits made 41% of the total bank deposits, according to estimates based on the latest SLBC ( State-level Bankers Committee) data. On December 2006, they constitute 38.4% of the total deposits. Experts feel the expat's migration from Kerala banks could be a short-term phenomenon."One, the rupee appreciation could have made NRIs wary of parking their Riyals and Dinars in relatively low-yielding NRI bank deposits. Two, the bank interest regime in 2006 might have made stock market look a greener pasture," says KK George, Director, Centre for Social-Economic and Environmental Studies, Kochi. And since its the unusual growth of domestic deposits that stole the NRI depositor's thunder, George also adds a third possibility. "It could be that the recent buoyancy in state economy is mirrored in the deposits," he says. Bankers, however, divulge that NRI floodgates from banks are opened to real estate sector, especially around new projects like Vizhinjam port and Smartcity. According to banking analyst B Anand, even the recent hike in NRI account interest rate has not been bullish enough for the traditional overseas investors.
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