As the recession began to squeeze the world’s economy from around September 2008, NRGs across the world began pumping their money into Gujarat banks.
In the storm of global recession, Indian banks remained the preferred shelter for NRGs’ hard-earned money, and their deposits in Gujarat banks rose by over 9% from September 2008 to September 2009.
As the recession began to squeeze the world’s economy from around September 2008, NRGs across the world began pumping their money into Gujarat banks.
Most of the NRG deposits in Gujarat have been made by Gujaratis residing in the US, Europe and Africa. Most of them diverted funds to fixed deposits (FD) in Indian banks. NRGs believe that Indian banks are trustworthy and offer safety as well as good returns on investments.
In September 2008, NRG deposits in Gujarat banks amounted to Rs20,392 crore, which increased by over 9% to Rs22,258 crore a year later. “Indians living abroad for many years have not been affected much by the economic slowdown,” said the circle head and deputy general manager of Punjab National Bank, Gujarat, AK Roy Choudhary. “And they continued to save in India.”
According to the State-Level Bankers’ Committee of Gujarat (SLBC) report of September 2009, the Kutch district is at the top of the NRI-deposits list, with Rs4,445 crore. It is followed by the Ahmedabad district with Rs3,330 crore.
NRI deposits in Kutch have increased by around 9% while Ahmedabad has experienced a jump of more than 20% over the past year.
“NRIs have limited investment opportunities in foreign countries,” said the general manager of the Union Bank of India, Gujarat, VA Mendonsa. “Besides, the Indian banking system has remained intact even amid the global economic turmoil. That makes India the safest haven for NRI depositors.”
As for the NRGs, a substantial number of them have invested in foreign currency non-resident (FCNR) deposits to cover foreign
exchanges, and they convert their funds into Indian currency for the hedging purpose, said Mendonsa.
Interestingly, NRI deposits in Navsari are higher than those of bigger cities like Rajkot and Surat. In September 2009, Navsari drew Rs2,100 crore; Rajkot got Rs1,753 crore; and Surat attracted Rs1,343 crore.
And the tiny Tapi district has shown the highest jump among all districts. NRI deposits in Tapi were around Rs7 crore, which rose by 142% to Rs17 crore in one year.
The total deposit base of banks in the state reached Rs20,6301.39 crore in September 2009 with year-on-year growth of 20.49%. In the total deposit base, the contribution of NRIs has come down to 10.78%, from 11.91% in the corresponding period of the previous fiscal.
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