KOCHI: Kerala is nearing a significant financial milestone, with non-resident Indian (NRI) deposits in the state poised to surpass Rs3 trillion. As of December 31, 2024, these deposits stood at Rs2.86 trillion, reflecting a 9.4 per cent year-on-year increase .
Federal Bank’s dominance
Federal Bank, headquartered in Kerala, plays a pivotal role in this landscape. The bank’s home state accounts for 58 per cent of its total deposits, underscoring its deep-rooted presence in Kerala’s banking sector . While specific figures on Federal Bank’s share of NRI deposits are not publicly disclosed, its extensive network and tailored NRI services suggest a significant market share.
Factors driving surge
Several elements contribute to the robust growth of NRI deposits in Kerala:
The Indian rupee’s depreciation from Rs75.71 to Rs85.45 against the US dollar over the past five years has made remittances more valuable, encouraging the NRI deposits to Kerala.
Attractive Interest Rates: Indian banks offer competitive interest rates on NRI deposits, making them an appealing investment avenue.
Economic Recovery: Post-pandemic economic stabilisation has restored confidence among NRIs, leading to increased remittances and deposits.
Banking sector’s strategic moves
Recognising the importance of NRI deposits, banks are enhancing their services: Infrastructure Development: Banks like Tamilnad Mercantile Bank are establishing global NRI centers in Kochi to cater to clients from West Asia, Singapore, and Malaysia.
Canara Bank has set up an NRI processing hub in Ernakulam and maintains regular engagement with Kerala’s Norka Roots department, which addresses the concerns of non-resident Keralites.
Federal Bank is extending its reach beyond Kerala, targeting NRI clients from states like Jharkhand, Chhattisgarh, and Uttar Pradesh, reflecting a strategic diversification of its customer base.
Kerala’s banking sector is experiencing a significant influx of NRI deposits, driven by favourable economic conditions and strategic initiatives by banks. While Federal Bank’s exact share of these deposits isn’t publicly specified, its strong presence and tailored services position it as a key player in this domain.
