Bangalore: NRIs are taking loans to remit money into India as the rupee continues to fall rapidly. Few are even borrowing money from their friends and relatives to make the most of gloomy Indian currency, reports Digbijay Mishra of Business Standard.
Remittance into India from foreign countries already witnessed a surge of over 25 percent in last two months, and it is expected to grow further as the weak domestic currency is hovering around 70 mark against the dollar.
India is one of the biggest recipients of global remittance of around $70 billion last year with more than 25 million Non Resident Indians scattered across the globe. "NRIs always used to send money from abroad. But with this kind of freefall the rupee has taken in the last ten days, it has surely seen an impact on remittances. People are taking loans from banks to send money back home in India as this will actually result into more value back home. This practice is picking steam,” said Sudhesh Giriyan, vice president and business head, Xpress Money.
The average loan amounts taken by NRIs are in the range of about 1.5-2 crore. However, the upper limit might differ as some HNIs are borrowing money at a much higher amount.
According to Promoth Manghat, VP (global operations) at UAE exchange it is not only banks that are lending as people are taking money from informal sources as well.
“For example, friends. We have seen NRIs talking money from friends to send money home. One of the big attractions is the fact that interest rate are lower here compared to other geographies. Overall remittances has already seen a jump and which is coming from Europe, UK, some parts of Asia and ofcourse the UAE region,” said Manghat.