NRI deposits in Kerala banks down



Thiruvananthapuram, SEP. 30, 2004
PTI

Deposits in commercial banks in Kerala, particularly non-resident deposits, have registered a sharp decline in the first quarter of the current fiscal.

NR deposits in banks in the state came down by Rs 480 crore while domestic deposits recorded a fall of Rs 72 crore in the three-month period from April to June this year, figures released by the State Level Bankers' Committee (SLBC) showed.

Banking circles here think that low interest rates could be the main reason for the negative trend in deposits. Total deposits that stood at Rs 65,961 crore on March 2004, came down to Rs 65,410 crore by June, showing a shortfall of Rs 551 crore.

NR deposits, which stood at Rs 30,100 crore on March 2004 fell to Rs 29,620 crore in the three-month period. The domestic deposits fell from Rs 35,861 crore to 35,789 crore.

According to SLBC Convener and Canara Bank General Manager, G. Umesh Shenoy, high interest rates used to be an attraction for depositors, especially the NRIs, to pump in funds.

The general trend of interest rates going down could be the reason for the fall in deposits, Shenoy said. The proposal in the Union budget to impose a ten per cent tax on NR deposits could also have affected the flow of deposits. Though the Centre had deferred the decision on NR deposits tax, confusion over the issue still prevailed among the NRIs, he said.