On the back of a depreciating rupee and attractive interest rates, Indian banks at the 10th Pravasi Bharatiya Divas (PBD) are doing some intense wooing of Indians living abroad.
Almost all leading banks have set up assistance centres at the venue to cater to queries from the 1,300-plus foreign delegates attending the three-day event, which opened yesterday.
“NRI (non-resident Indian) investors are very important for us. They form 10 per cent of total personal segment deposits,” said Samir Kumar Bhattacharya, general manager (NRI), State Bank of India (SBI). The government in 2001 had estimated the 25 million people of Indian descent abroad have an estimated worth of around $300 billion.
“And, with the depreciation of the rupee, they are getting even better returns,” Bhattacharya added. SBI has the largest market share of NRI deposits, of 22.5 per cent, with 170-odd foreign offices in 34 countries.
“There are much more queries this year than in previous years. Most queries are over investment advice and which plan will give the best saving rates,” said an executive of Kotak Mahindra Bank. At the event here, most NRIs seemed upbeat over investing in India.
They said this had become much more attractive over the years, as most banks were offering impressive interest rates compared to those in the West. Further, investors abroad perceive a booming economy. Another reason often cited was doubt over when their bank in the West might go bust.
“The interest rates that Indian banks are giving are one of the highest. This is the best time to invest in India. We are trying to bank on it,” said Sunny Kulathakal, a businessman based in Bahrain.
Banks started providing competitive interest rates to NRIs after the Reserve Bank of India, on December 16, 2011, decided to deregulate interest rates on Non-Resident (External) Rupee Deposits and Ordinary Non-Resident Accounts. This change allowed banks to determine their interest rates on both savings deposits and term deposits of a maturity of one year and above under the former and savings deposits under the latter with immediate effect.
In recent years, deposits under NRI schemes have witnessed an increase, but they lack the highs achieved in the early 2000s. In 2010-11, the inflow of NRI deposits was Rs 14,763 crore, an increase of 6.5 per cent from the previous year. However, this was considerably lower than the Rs 19,694 crore received in 2008-09. In 2011, the total of NRI deposits was Rs 2,30,812 crore, compared to Rs 2,27,078 crore in 2010.
According to the RBI, any NRI or Person of Indian Origin can, without taking its permission, can maintain or open current, savings, recurring or fixed deposit accounts. Permission is required only for an individual or entity from Bangladesh or Pakistan.
NRI accounts can also be maintained with post offices in India.
