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Rupee depreciation has swelled Federal Bank’s NRI funds kitty with 21 per cent of India’s remittance now coming through the bank. Last fiscal saw remittances reach ₹1,40,000 crore, said Shyam Srinivasan, the bank’s Managing Director and CEO.
NRI remittance
“But its utilization has changed. Earlier, these remittances used to remain in the bank as deposits. But now, it is being used by customers to invest in properties and finance businesses and construction activities, he said.
Srinivasan was addressing a meet-the-press programme titled, “Take off Kerala,” organized by Ernakulam Press Club.
He said the upward trend in the NRI remittances is expected to continue in the forthcoming quarters as well.
ALSO READ: Remittances from advanced nations beat flows from Gulf region in FY21
The credit growth, for the first time in the last 8 to 9 years, witnessed a 15-17 per cent growth, which is encouraging. Moreover, the growth has been well diversified across all segments, and even corporates are availing themselves of more loans, Srinivasan said.
Impact of Covid-19
To a question on the impact of Covid-19 on NPA, he said the ratio has improved by 100 basis points compared with that in 2020. To a great extent, the government welfare programmes and moratoriums helped in keeping NPAs under check. But, the next six months will be crucial as the moratoriums will be withdrawn.
Asked on the effect of Covid on the economy, Srinivasan said, “Covid has taught us that we are in a fragile world. But we came out largely after restoring normalcy in every sphere of activity, thus proving our capability to deal with any untoward circumstances. The pandemic did not worsen as was expected because of the resilience of the people. At the same time, Covid has taught us to convert any challenges into opportunities”.
Inflationary trends
To a question on the rising inflationary trends, he said, globally, inflation is a big challenge in all the developed markets, which could lead to a recession. But India is by and large insulated from the global trends, thanks to the timely intervention of the Reserve Bank and this has paved the way for an economic recovery.
ALSO READ: Inflation steadily easing: RBI Chief
There could be a further increase in inflation rates, which could keep interest rates high, and it is expected to start softening after two quarters.
However, the economy may witness positive signs as the onset of the festival season in the second half of the year could spur further growth.
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