A sharp fall in the rupee since late May is driving Indians abroad, especially those belonging to the high income category, to remit money in higher proportions for real estate and stock market investments.
Remittances have grown 10-12 per cent in the last six months. Remittance services provider UAE Exchange handles India-bound inflows in excess of $7 billion (Rs 42,500 crore today) a year.
Sudesh Giriyan, vice-president, Xpress Money Service, run by UAE Exchange, said the monthly turnover was about $600 million. After the rapid fall in the rupee value against the dollar since May, there is a sharp increase in volumes.
Y Sudhir Kumar Shetty, chief operating officer (global operations), UAE Exchange, said middle and high income earning Indians in West Asia and the developed world had stepped up remittances for real estate and the capital market. In fact, some of them borrow money (abroad) to park funds in India.
The blue collar workers, 75 per cent of the Indian diaspora in West Asia, especially in the Gulf region, are unlikely to increase monthly amounts sent to India, Shetty said, adding annual remittances to India were expected to touch $73 billion in 2013.
According to World Bank data, remittances to the South Asia region are estimated to have increased sharply in 2012, growing 12.3 per cent to $109 billion.
India remains the largest recipient in the world, receiving $70 billion in remittances in 2012. In addition to large numbers of unskilled migrants working mainly in the Gulf, India also has a large skilled diaspora sending money home.
Flows to Bangladesh, Pakistan and Nepal have been particularly robust, helped by strong economic growth in the Gulf Cooperation Council. Remittances to the South Asia region are projected to remain buoyant in the coming years, though growing more slowly than the high rates experienced in 2011 and 2012, the World Bank said.
UAE Exchange and Financial Services and State Bank of India have launched State Bank Xpress Money Card, a co-branded pre-paid card that can be loaded up to Rs 50,000.
