Keralas NR bank deposits race past Rs 3 trillion
KOCHI: Keralas banking sector has raced past a historic landmark. For the first time, non-resident (NR) deposits in banks in the state crossed the Rs 3-trillion mark a symbolic threshold that underscores the states deep economic umbilical link with its global diaspora. As on September 30, 2025, NR deposits stood at Rs 3,03,464.57 crore, up from Rs 2,86,987.21 crore three months earlier an increase of Rs 16,476.79 crore, or 5.75%, in a single quarter. The rebound is particularly striking because the April-June quarter had seen a rare dip, when deposits slipped 2.31%, or Rs 6,634.92 crore the first decline in several quarters. The long-term trajectory, however, has been one of steady ascent. Kerala reached its first trillion in March 2015, before doubling it by March 2020. It took another five years to vault past Rs 3 trillion. At the heart of this surge lies a mix of sentiment, economics, and strategy, according to banking industry officials. A weaker rupee, attractive deposit rates, and renewed post-pandemic remittance momentum have strengthened inflows, they said. Historically, a weakening rupee relative to the USD has resulted in increased inflows into NRE accounts. This years inflows have followed this established trend, said Joy P V, EVP & country head - retail liability & fee products of Federal Bank. Weakening rupee may support remittance The bank, which leads Keralas NR deposit league table with Rs 85,250.08 crore, credits its performance to deep remittance linkages and trust built over decades. Federal Banks strong rupee drawing arrangement and wide global correspondent network make remittances easy for NRIs. With innovative and tailored savings products, competitive interest rates, and relationship-led banking, we have consistently earned customer trust. Along with favourable exchange rates, these have helped attract substantial inflows to NRI accounts, Joy said. Federal Bank on top If Federal Bank holds the crown for volume, Canara Bank has delivered the quarters biggest headline-grabbing leap. Its NR deposits more than doubled from Rs 10,935.71 crore to Rs 21,914.95 crore, an astonishing Rs 10,979-crore jump in just three months. No other bank in Keralas NR portfolio comes close to that kind of growth spurt this quarter a burst that bankers attribute to targeted mobilisation campaigns and aggressive rate positioning. The State Bank of India remains a strong second in the rankings, with Rs 80,234.07 crore in NR deposits as of September, reinforcing its formidable base among long-standing expatriate customers. Bankers agree that currency dynamics have played a decisive role. Over the past five years, the rupee has slid from around Rs 75.71 to about Rs 85.45 per dollar a depreciation that has made every dollar remitted to India stretch further. For many NRIs, the arithmetic is irresistible: stronger foreign earnings converted at weaker rupee levels, topped with tax-free interest on NRE and FCNR deposits. The weakening of the rupee increases the effective value of foreign currency remittances, making investments and deposits in India more attractive, said Biji S S, SGM & head branch banking, South Indian Bank. Attractive interest rates, favourable remittance rates, confidence in Indias long-term growth, and improved digital onboarding have all contributed to higher inflows. Biji believes the trend isnt a flash in the pan. A moderately weakening rupee is likely to support sustained NRI inflows in the near to medium term. NR deposits remain attractive because they offer higher risk-adjusted returns compared to many overseas markets, tax-free interest on NRE/FCNR deposits, full repatriability, and a robust, well-regulated banking system. The broader macro backdrop reinforces that optimism. Remittances to India have staged a strong revival post-Covid, and Kerala continues to rank among the countrys biggest recipients -- even as migration patterns diversify and newer corridors such as the US gain prominence alongside the Gulf. For now, Keralas Rs 3-trillion milestone isnt just a round number its a testament to the enduring economic power of its diaspora. NRI deposits in Kerala banks head towards Rs 3-trillion mark
11 C
