Kerala sees growth in remittance from abroad

Inflows from GCC countries exhibit signs of tapering, while experts highlight that other nations are compensating for the decline

PRAVASISAMWAD.COM

Contrary to earlier reports suggesting a decline, banks operating in Kerala assert that remittances from abroad are steadily increasing, albeit at a more measured pace. While inflows from Gulf Cooperation Council (GCC) countries exhibit signs of tapering, experts highlight that other nations are compensating for the decline, reported newindianexpress.com.

Skilled worker migration has emerged as a significant driver of the overall increase in remittance volumes. Federal Bank, leading in remittance among Indian lenders, reports robust growth, with the bank’s share expanding visibly. Despite Kerala’s historical dominance as a GCC-focused non-resident market, the state has not witnessed a recent slowdown, and there has been exponential growth during the Covid period.

The report quoted Joy P V, Senior Vice President & Country Head of deposits, wealth & bancassurance at Federal Bank, notes, “In the current fiscal, the year-on-year growth in remittance volume to Kerala remains positive, albeit with very minimal expansion.” Additionally, there is a noticeable increase in remittances from specific non-GCC locations not traditionally associated with such flows.

The World Bank anticipates a moderation in remittance growth to India in 2023, influenced by high levels in the previous year and changing demand for highly skilled IT workers, along with lower oil prices affecting remittance flows from the GCC

Anand Subramaniam, Joint General Manager and Head of NRI business at South Indian Bank, emphasizes an increase in inward remittances from NRIs in the ongoing fiscal year, unaffected by global events such as the Ukraine war or economic slowdowns. S Irudaya Rajan, chair of the International Institute for Migration and Development, underscores the resilience of inward remittance and migration from Kerala, attributing it to a shift from unskilled to skilled workers.

According to an RBI survey, while India’s inward remittances have shown resilience, there have been significant changes in geographical and socio-economic composition. Maharashtra has surpassed Kerala as the top recipient state in the remittance landscape. The future outlook remains uncertain, with remittance from GCC countries slowing, and an increasing proportion of student migration.

Narendra Dixit, CSB Bank retail head, observes a decline in Kerala’s share of NRI remittances and notes correlations between the drop in UAE remittance contributions and the overall trends in Kerala’s emigrant population. The World Bank anticipates a moderation in remittance growth to India in 2023, influenced by high levels in the previous year and changing demand for highly skilled IT workers, along with lower oil prices affecting remittance flows from the GCC.

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