Kerala's NRI deposits surge towards Rs 3 trillion mark amid fierce banking competition

Kerala’s dominance in this sector has prompted banks to ramp up their presence in the state and deepen connections with the Gulf region, where a vast majority of Kerala’s expatriates reside.

Federal Bank’s executive director, Shalini Warrier was quoted by The Economic Times highlighting the strategic importance of NRI deposits, noting, “NRI deposits, characterised by larger ticket sizes and consistent inflows, provide a valuable source of long-term funding. NRIs often seek secure and profitable avenues to park funds domestically, making this segment a stable and resilient deposit base”.

Banks such as Tamilnad Mercantile Bank are setting up global NRI centres in Kochi to tap into customers in West Asia, Singapore and Malaysia.

Canara Bank, meanwhile, has established an NRI processing hub in Ernakulam and maintains regular engagement with the Kerala government’s Norka Roots department, which handles the affairs of non-resident Keralites. The bank is also leveraging its representative offices in Sharjah and branches in London and New York to facilitate remittances and source NRI business, as per The Economic Times report.

While Kerala remains the primary market, banks are increasingly targeting NRI deposits from other states and cities. ESAF Small Finance Bank’s managing director, K Paul Thomas, told The Economic Times, “Over the years our primary market for NRI business has been Kerala. While we continue to focus on the Kerala market, we are also concentrating our efforts on mobilising more deposits from markets outside Kerala, such as Maharashtra, Tamil Nadu, Karnataka, Delhi and Hyderabad”.

Federal Bank, leveraging its historic strength in the Kerala-Gulf corridor, is now expanding its reach to capture NRI flows from newer migration states like Jharkhand, Chhattisgarh and Uttar Pradesh.Even as remittances from abroad have fluctuated due to economic uncertainties and migration trends, the appetite for secure savings among NRIs remains strong. As banks compete for a larger share of this resilient deposit base, Kerala is set to remain at the heart of India’s NRI banking landscape.