Kerala becomes battleground in banks’ fight for NRI deposits

Kolkata: Competition among banks to grab deposits of non-resident Indians is getting intense even as it becomes tougher for them to attract resident Indians who are increasingly looking for alternative investment ideas for higher returns.

Banks are ramping up their operations in Kerala, known to be the hub for NRI deposits and remittances, while they strengthen their operations in the Gulf countries to deepen the customer connection.

"NRI deposits, characterised by larger ticket sizes and consistent inflows provide a valuable source of long-term funding. NRIs often seek secure and profitable avenues to park funds domestically, making this segment a stable and resilient deposit base," said Federal Bank executive director Shalini Warrier.

Tamilnad Mercantile Bank has decided to set up a global NRI centre in Kochi with an aim to tap customers in West Asia as well as in Singapore and Malaysia.

"We are seriously looking at the NRI clientele. The NRI deposit segment is contributing just about 4% of the total deposit and we expect to ramp it up to over 10%," TMB managing director Salee Nair said.

Thrissur-based CSB Bank has proposed a representative office in the UAE and is separately planning to set up a global remittances platform. It opened a dedicated NRI branch near the Kozhikode International Airport in September, with round the clock lounge facilities to woo customers.

Kozhikode is one of the top three airports in Kerala for NRI traffic, said a bank official.

Kerala's very own South Indian Bank has introduced NRI-SAGA, a special product targeting salaried NRIs.

The God's Own Country is the most significant market for deposits and remittances from abroad with every household in the state receiving an estimated Rs 2.2 lakh a year. The size of NRI deposits grew 11% year-on-year to Rs 2.74 lakh crore at the end of June from Rs 2.47 lakh crore a year back, according to the state level bankers' committee report.

Bengaluru-headquartered Canara Bank has an NRI processing hub in Ernakulam. “We have been targeting deposits in Kerala by doing NRI meets during festive seasons like Onam, Christmas and Eid. We have regular liaison with Norka Roots, a department of the Kerala government (handling affairs of non-resident Keralites)," said managing director K Satyanarayana Raju.

To be sure, banks originating in the state have their natural strength in the Kerala-Gulf Cooperation Council (GCC) corridor.

"Taking advantage of that natural strength, we have now diversified our presence in the GCC to capture a significant share of the non-Kerala–GCC corridor. By establishing branches in the newer migration states of Jharkhand, Chhattisgarh, Uttar Pradesh and so on, we are able to start capturing a share of the flows from GCC to these locations," Warrier of Federal Bank said.

Echoed ESAF Small Finance Bank managing director K Paul Thomas. "Over the years our primary market for NRI business has been Kerala. While we continue to focus on the Kerala market, we are also concentrating our efforts on mobilising more deposits from markets outside Kerala, such as Maharashtra, Tamil Nadu, Karnataka, Delhi and Hyderabad," he said.

Canara Bank said it is sourcing NRI business through representative offices at Sharjah and branches in London and New York. It also has arrangements with exchange houses in the Middle East for facilitating remittances.