Non-resident Indians (NRIs): Gujarat

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NRI bank deposits in Bhuj-Kutch

The Times of India, Jun 17, 2015

Premal Balan & Kalpesh Damor

Thanks to NRIs, 3 small Gujarat villages each have Rs 2,000cr bank deposits

Eight full-fledged branches of nationalized banks cater to just 1,292 households in the tiny hamlet Baladia, some 15km from Bhuj. The NRI-rich village boasts of bank deposits worth Rs 2,000 crore. Baladia is one of over a dozen wealthy Patel villages around Bhuj. With 7,630 households, bank deposits in Madhapar stand at Rs 5,000 crore. Kera village, home to 1,863 families, too has deposits of Rs 2,000 crore. Almost half of this is NRI money.

No wonder bank hoardings flashing interest rates for NRI deposits (up to 10%) is a common sight in these villages. "Some villages in Kutch like Madhapar and Baladia have very high NRI deposits. To the best of our knowledge, this is the highest in the country," said K C Chippa, former convener of the State Level Banker's Committee (SLBC) Gujarat. Between them, Madhapar, Baladia and Kera have 30 bank branches and 24 ATMs.

According to bankers, other villages with bank deposits in the range of Rs 100 to Rs 500 crore include Nanpura, Sukhpar, Samatra, Kodaki, Bharasar, Rampar-Vekara and Mankuva to name a few.

The top three villages draw majority of deposits from a large number of non-resident Gujaratis (NRGs). While Kutchi Patels dominate Baladia and Madhapar, Kera has a vast number of Khoja community NRGs.

"NRGs form over 60% of Baladia village population. They put all their money in bank deposits," said Jadavji Garasia, a local businessman from Baladia.

According to a Dena Bank official, the district has NRI deposits of around Rs 9,181 crore, the second highest in the state after Ahmedabad. Bank deposits in Kutch total around Rs 24,353 crore.

Residents of these villages are settled mostly in countries like Kenya, Uganda, Mozambique, Tanzania, South Africa, the UK and Australia.

"The high number of deposits is because they feel indebted to their hometowns," said Haribhai Halasia, former president of the Kutch Levua Patel Samaj in the UK. "People like me who are living in the UK come to Kutch every 3-4 years and try to pay back our native place," said Halasia, who frequents his native village Madhapar, 20km from Bhuj. Halasia says there are about 2,500-3,000 people from Madhapar in Britain. Kutch Madhapar Karyalay, a body registered in the UK, has over 1,000 registered families from Madhapar.

Interestingly, those with high amount deposits also negotiate with banks for higher interest on their deposits. In many cases, banks also agree to pay them 0.25% or 0.5% more depending on the amount of deposits.

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