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Non-resident Indians in the Gulf may not have been able to capitalise on the weak rupee, which hovered above the 60-to-the-dollar mark over the last few days, to remit funds back home, banking sources say.
Bankers told Business Line that the upsurge noticed in remittances from the Gulf countries through the banking channels last week had tapered off, despite the continuing value depreciation.
One reason for this was that the salary cycle of Gulf employees had passed. Normally, in many Gulf countries, salaries are paid around seventh of each month.
As a result, the inflow of remittances would last until a fortnight later and would gradually peter out.
Another reason was, according to a banker, is that after the rupee hit 58, the NRIs, expecting that the fall would continue, might have chosen to wait.
Not expected
The rupee hit the all-time low of 60.72 on Wednesday, though it recovered to 60.40 on Thursday.
Money market analysts, who had considered Rs 60/dollar a psychological resistance, had not expected the rupee to breach that level so quickly — neither had the NRIs.
This month, the inflow period coincided with the depreciation of the rupee and, hence, the inflow picked up as the NRIs wanted to cash in on the value decline.
But once the salary cycle ended, the employees had no money to remit.
Only businesspeople and those who had saved their earnings in the Gulf banks could benefit from the fall. Kerala gets a substantial slice of the Gulf remittances to India. State Bank of Travancore and Federal Bank, between them, get a major share of the Gulf remittances.
A senior official in Federal Bank said that while the average daily remittance in the last week was close to Rs 150 crore, on Wednesday, when the rupee value sank to 60.72, the remittance had fallen to Rs 115 crore.
He claimed that the bank had received over Rs 3,000 crore by way of Gulf remittances so far this year.
However, this was lower than in May 2012, when the rupee value had nosedived.
At that time the bank had received Rs 3,200 crore in remittances in just one month.
No increase
In fiscal 2012-13 fiscal, Federal Bank got nearly Rs 28,000 crore.
A senior official of the SBT, which gets the largest chunk of Gulf remittances in Kerala (Rs 30,000 crore last fiscal), pointed out that there was no increase in the inflows this week despite the further fall in the rupee.
After it reached 57-58/$, the inflows had not picked up.
However, the impact of the rupee fall on remittances through non-banking channels — via money transfer companies such as Western Union and MoneyGram, and the hawala route — are still unclear.
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