Betting on dollar: Non-resident Keralites shun FDs for alternative investment avenues

Source: The New Indian Express

KOCHI : While remittances sent to their home state continue unabated, non-resident Keralites (NRKs) are now avoiding traditional fixed deposits (FDs) and exploring better investment avenues.

In Kerala, banks are noticing a significant change in the saving behaviour of expatriates, who are increasingly favouring dollar-denominated instruments over previously popular FD rupee accounts. Bankers are acknowledging unmistakable signs of substantial shifts within the industry.

According to Federal Bank, which boasts the largest share of the remittance pool among private lenders in the country, there is a trend towards dollar-denominated products among customers.

Post Covid, there has been a noticeable change in customer preferences regarding currency and deposit tenure, said Joy P V, senior vice-president & country head, deposits, wealth & bancassurance, Federal Bank.

"Expatriates with migration and settlement plans are increasingly turning to dollar-denominated products to capitalise on higher interest rates compared to those in their country of residence, as well as to hedge against currency fluctuations. We have witnessed significant growth in the FCNR portfolio, in particular," Joy told TNIE.