Kutch, Feb. 05, 2005
A small village in Kutch is flush with funds from
non-resident Indians, NRIs. For three decades, NRIs
in this village have been depositing money in banks
and post offices and the kitty today has grown to
Rs 2,000 crore.
A small village in Kutch is flush with funds from
non-resident Indians, NRIs. For three decades, NRIs
in this village have been depositing money in banks
and post offices and the kitty today has grown to
Rs 2,000 crore. But the government's move to treat
interest on NRI deposits had left these depositors
in confusion.
A sleepy village of 25,000 people, Madhapar in Kutch
earned the name of being one of the few villages with
the highest NRI deposits in banks and post offices.
Every family of Madhapar has an NRI and for over three
decades these NRIs have been parking their surplus
money in banks back home.
Chief Manager, State Bank of Saurashtra, Madhapar,
V P Dabi told CNBC-TV18, "My branch, or my bank
has been here since September 1993. If we talk of
today, the total deposit is Rs 175 crore. Of this,
90% is NRI deposit and the rest is domestic."
Like State Bank of Saurashtra, there are six other
nationalized banks and one private sector bank in
Madhapar. Some estimates put the NRI deposits in banks
at Rs 800 to Rs 1,000 crore and another Rs 600 - Rs
800 crore in post office savings schemes.
The Union government had announced that it intended
to tax interest income of NRIs. Though it has since
withdrawn the notification, NRIs are wary and banks
saw withdrawals of NRI deposits, for first the time
in over three decades.
Branch Head, UTI Bank, Madhapar, Rumit Mehta said
"Definitely, we have witnessed over here a panic
kind of situation and people were afraid about what
to do about their money. They didn’t know anything
and suddenly this development happened and they did
not know how to manage their own funds. That is why
they were a little bit confused."
Bankers are now hoping that the government will once
again clarify its stand on the issue and help bring
back NRI deposits.
