Remittances into Kerala have increased significantly in the past few days on the back of the rupee sliding to record lows. With the rupee falling steeply, banks and money exchange houses estimate that money transfer and deposits into Kerala will pick up further in the coming days.
Kerala has more than 2.8 million immigrants spread across the world.
?Our forex remittances have almost doubled in the past week. We are receiving $30-35 million as remittance on a daily basis as against $ 16-17 million, ? RK Das, DGM, State Bank of Travancore, told FE. Keralites abroad are even known to take loans to remit more money home whenever the rupee declines sharply, Das added.
Money transfer to the state touched an all-time high of R58,150 crore in 2012-13 as against R49,965 crore in 2011-12. Remittance accounts for almost 30- 32% of the state GDP, according to a Kerala migration survey, conducted by the Centre for Development Studies (CDS). SBT is not the only financial institution seeing a sudden inflow of foreign currency.
Muthoot Money Exchange, a leading money transfer company, has seen a 10-15 % spike in its transactions in the past few days.
?Normally, money transfers are low during June as most of the immigrants send more money during the April-May period for educational needs. Surprisingly, the remittance has increased in June this year. We suspect that even the unskilled workers are taking advantage of the situation and sending more money to the state,? Jose Allesh of Muthoot Money Exchange said.
Jayakumar PG, MD and CEO of the Kerala-based Dhanlaxmi Bank, told FE that Indians abroad watch the currency movements keenly and utilise the opportunity of a weaker rupee to send or invest money back home. ?We have always seen remittances and deposits increasing sharply whenever rupee declines. This has become more pronounced with the failure of certain US and Europe based banks,? he added. Higher rates are also a good reason for Indians to send money home, he said.
?We have seen a spike in transfer. The difference is marginal for unskilled workers who send money home regularly for subsistence, but for Indians who park their money in the country they work, it is a wonderful opportunity to invest or buy assets in their home state,? said Sudhir Sukumar, AVP, Muthoot Exchange Company.
