Expats rise as rupee falls: Indians taking loans to send money home

Some Indian expats have started taking personal loans from banks and approached their respective companies for borrowings in a bid to take advantage of a record fall in the value of the Indian rupee against the Saudi riyal. “The Indian rupee touched an all-time low of 16.38 against Saudi riyal and 63.13 against the US dollar on Monday,” said Farid Khan, a local banker.
“Remittance centers in Saudi Arabia were offering between rupees 16.28 and 16.38 for a Saudi riyal on Monday,” said Manzar Khan, who works in one of the Al-Rajhi remittance centers in Riyadh.
The Indian currency has lost 15 percent this year-to-date, said Joy Fernandes, who works at a local exchange, and who himself has taken a loan to remit funds to India.
A teller at a local Enjaz remittance center said: “We received the largest number of Indian expats remitting funds to India from our centers in Riyadh on Monday.”
“Till a few months back, my remittance of SR1,000 translated into rupees 10,000 … and now the same sum gets me more than Rs.16,000,” said Waleed Siddiqui, 32, who’s been working with a leading IT firm in Riyadh for the past 13 years. “I have taken a loan and will be investing it in India,” he said.
He is one of the more than 2.2 million Indians in the Kingdom, who are remitting money back home, or looking to buy real estate or stock to capitalize on the depreciating rupee.
The growth in remittances to India from the Middle East and the Gulf states is also evident from the statistics shared by Indian banks. “Indian expatriates started taking personal loans for remitting money back home,” said a report quoting Rajeev V. G., general manager of Global Money Exchange, which is managed by the State Bank of Travancore.
“We have witnessed a substantial increase in remittance and high volume transactions, which is a clear indication that expatriates are taking loans for arranging funds for remitting money,” said the report, adding that there has been a 10-15 percent growth in remittances over the previous day. Gulf NRIs are borrowing from friends and colleagues as well as taking loans to make the most of the rupee’s slide, he added.
World Bank’s Chief Economist Kaushik Basu said the country’s economic problems were “overplayed.” In a report, he said that India was not in danger of a full-blown economic crisis, despite mounting fears about Asia’s third largest economy.
“Growth may not have bottomed out. We have further to go (down), but the situation is not as bad as is being reflected by the mood and seen in the headlines,” said the report. Basu, who was an adviser in the Indian finance ministry until September, said in the report that the situation was different from 1991 when India had to seek a bailout from the International Monetary Fund in what was considered a national humiliation.