NRIs see Indian banks safer

Ahmedabad: The break -down of American banking has turned out to be a blessing for the Indian banks. The NRIs has been in dilemma since the collapse of the American economy and are now choosing Indian banks for their cash abode. In recent weeks, many U.S. based NRIs have switched their funds from U.S. based entities to Indian banks by way of NRI deposits.

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Anand Patel, an hotelier in New Jersey who hails from Nadiad, has just called up his brother Dilip to find out more about NRI deposits in Indian banks. Anand told him he wanted to send him $1, 00,000 for safe keeping, because he was worried about the turmoil in the U.S. financial markets. Anand is only one among a large number of NRIs that have already made the move, much to the delight of public sector banks. Far from being hit by the financial crisis in U.S, the Indian banks are seen as a safer option for their funds. For instance, SBI in Gujarat, which had mopped up NRI deposits worth Rs 290 crore in the last five months, has collected over Rs 150 crore in September alone.

H.C. Pattnaik, Chief General Manager, SBI, Gujarat said,"The spurt can be mainly attributed to the financial crisis in U.S. markets. The depreciation of rupee and rising rate of interest for fixed deposits in foreign currency have made NRI deposits attractive."


In September, rupee has depreciated over 11 percent against the dollar, from Rs 42.85 to Rs 47.68. Besides, in order to lure NRIs, RBI had recently increased rate for deposits in foreign currency from Libor (London Inter Bank Offer Rate) minus 75 basis point to Libor minus 25 basis point.

G.G. Joshi, General Manager, Bank of Baroda said,"We are seeing a surge in NRI deposits and it is expected that momentum will increase. M.V. Nair, Chairman, Managing Director, Union Bank of India said,"Good amount of money will flow back into the country looking at the current scenario."