Kerala’s global diaspora is in the limelight for a rich reason. Malayali NRIs are at the forefront of a foreign-currency mobilisation drive, involving the Reserve Bank of India’s special Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit scheme.

With banks offering attractive dollar deposit rates in years, Malayalis – particularly those in the Gulf – have been making huge investments, according to RBI figures.

It is to be noted that Malayali expatriates emerged as one of the largest contributors to the 1998 Resurgent India Bonds (RIBs) scheme almost three decades ago.

In Kerala, NRI deposits continue to be a significant factor in the State economy.

As on March 31, 2026, total NRI deposits with banks in Kerala stood at Rs. 3.24 lakh crore, according to State Level Bankers’ Committee (SLBC) data.

Federal Bank accounted for the largest share with Rs. 92,326.10 crore, followed by State Bank of India (Rs. 84,966.67 crore), South Indian Bank (Rs. 31,947.18 crore), Canara Bank (Rs. 23,351.92 crore), and CSB Bank (Rs. 5,431.74 crore).

The removal of interest rate ceilings has enabled lenders to offer substantially higher returns on foreign-currency deposits.

Depositors can maximise their tax-free (in India) foreign currency holdings at competitive rates over a longer tenure.

So far, South Indian Bank has mobilised around $50 million through the special FCNR(B) drive.

The RBI’s concessional forex swap facility, which effectively removes the hedging cost, is an added attraction to NRIs.

A remarkable share of deposits come from the GCC countries, with Europe and other markets contributing comparatively less.

CSB Bank has reported that a bulk of its deposits came from NRIs in the UAE, Saudi Arabia, Oman, Qatar, Kuwait, and Bahrain.

That said, it is undeniable that Kerala’s Gulf connection is a force, impacting banks as they compete for overseas savings. – editor@nrifocus.com