Investments Galore

With the rupee depreciation hitting rock bottom, Non Resident Indians are looking for numerous investment options in their homeland. Here are a few tips to utilise NRI money

     While most Indians are not too happy about the falling rupee, it is definitely good news for the Non Resident Indians (NRI) who are repatriating funds to India.  Till date, the rupee has depreciated by about 13 per cent since May which means for an NRI investor will hugely benefit from the increased conversion rate. Cashing in on the falling rupee, banks and investment firms are out to woo its NRI customers as well as potential customers with ways to park their money safely. 

According to a report by UAE exchange, a sharp decline in the rupee value have urged NRI’s to step up their remittances by 12%. “Remittance from the Middle East has increased but not as much from US and Europe,” says Eapen Joseph, chief regional manager, Indian Overseas Bank. A top official of SBT also confirms that NRI remittances have increased to an extent and NRI’s will earn more value on the Indian rupee now. “In the last two months, there has been a 100 crore increase in NRI remittances in 5 districts of Kerala alone, due to falling rupee,” states Eapen.

Investment opportunities

Rupee depreciation opens a world of possibilities for NRI’s in terms of investing in bank deposits, mutual funds, property, etc. Deposits are the most common option for investments. “Be it recurring deposits, fixed deposits or any other, it is a safe haven for NRI money,” says Eapen. “One can also choose to avail reinvestment deposit plan, which basically allows you to reinvest the interest earned on your deposit as well as earn interest on your deposit,” he adds.

NRE and NRO fixed deposits are emerging as an attractive investment option, as it allows them to lock their funds at high levels for longer period of time. It also helps to transfer funds from India to foreign country effortlessly.

Similarly, investing in chit funds is another option. “Chit is the only savings account that can be converted into a credit instrument,” says Rajendran, managing director, KSFE. “Chits help in long term financial planning and one can develop assets through chits for savings and building assets,” he adds. However, one must careful to verify the authenticity of these chit funds as there are many illegal ones operating in the Gulf.

      Apart from this, choices are aplenty for those willing to take risks. NRI fund flows can be diverted to capital market-linked instruments such as stocks, mutual funds, debentures, etc. “NRIs may choose to invest through mutual funds including money market funds or through a Portfolio Management Service (PMS), which provide a passive way to investment,” says Sony Mathews, regional head – Kochi, Geojit BNP Paribas. “Other options available are to invest in dated Government securities or treasury bills, bonds issued by a PSU and also in the shares of a public sector enterprise,” adds Sony.

Nevertheless, experts predict the rupee depreciation is just a passing phase and is not beneficial in the longer run. Therefore, even though in the short term an NRI can earn a few quick bucks due to the falling rupee, in the long term, their investments in India will be stronger only if the rupee gets stronger.

-  Sherene Joseph