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Motherland, money and magic of NRIs: banks make a beeline for Bhuj's billions

Ever heard of major nationalised banks vying with each other to open their branches in a nondescript village of only 10,000 population, or posting their senior-level officers there, or even setting up stalls at their religious functions to woo prospective depositors ?

At least two villages in the border district of Bhuj in Gujarat -- Madhapar and Boladia -- are fortunate to have bankers vying with each other for plum postings or opening high-tech branches, braving dust and heat.

The reason: nearly half-the-population of Madhapar comprises non-resident Indians who deposit large sums in their favoured branches. The depositor, mostly an NRI, is the king in this area and banks try to pamper him by every conceivable means, sometimes even at the cost of annoying the local depositors.

According to banking sources, a prominent bank recently posted here a senior officer of the rank of assistant general manager. The bank's deposits crossed the Rs 2 billion mark.

Some other banks, too, were now having senior-level managers in their branches in these villages and one of these banks had even opened Asia's first rural foreign exchange dealing branch. Other banks were also virtually overflowing with deposits and they include cooperative banks and post offices as well.

The post office savings not only achieved their annual targets but crossed the 125 per cent mark this year. Farmers were among the top investors in these banks. Normally, as per the Kutch tradition, they despise loans, repay any loans at the first available opportunity, and reinvest interest on their deposits, the banking sources pointed out.

Due to this peculiar pattern, the deposits with the banks shoot up every year as there were few, if any, creditors. As a result, at least three prominent nationalised banks had opened their regional offices at Bhuj, comprising only one district (Bhuj). Some of the banks even have separate NRI branches at Bhuj.

Apart from the NRIs' habit of depositing as much money as possible in their native village, since Kutch district was devoid of enough water to encourage agriculture and industry, the rate of withdrawal of deposits was also negligible. Loans, if any, were mostly secured and there were hardly any bad-debts. Consequently,the deposits run into several billions in a small village like Madhapar.

Since NRI depositors mostly belong to a particular sect of the prosperous Patel community, some of the banks were reported to have made donations to their temples and trusts and even organised special depositors' counters in their religious congregations to woo them. Officers from the Kutch district were sent to perform this special duty ''religiously'', the sources remarked.

Recently, a number of cooperative banks had also opened their branches in the neck-and-neck tussle for boosting their deposits and a few of these were even attracting depositors on the plea that their own community had opened this or that branch.

In a bid to treat the NRIs as very important persons, some of the banks were also reported to have short-changed their customers in terms of daily or even hourly differences of foreign exchange rates, vis-a-vis the one applicable at Bombay at the time of transaction, the sources added.

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