19 May 2012
Muscat: As the rupee hit a record low against the dollar, Indian expatriates are cashing in on the situation -" sending home more money than ever.
With the Omani rial now fetching more than Rs142, as against Rs100 a few years ago, every Indian living in Oman now earns 42 per cent more (if Oman inflation is excluded) without a salary hike.
Take the example of a labourer who would send Rs20,000 home a few years ago; today, he can send Rs28,400 without any increment in his salary.
According to Sasidharan K.P., general manager, Global Money Exchange Company LLC, a large number of Indians are even going for huge personal loans from the banks here so that they can remit cash in bulk, to take advantage of favourable exchange rate. "I had applied for a personal loan of RO10,000 from a bank here and on Wednesday I got the cheque. Immediately I fixed Rs14.1 lakh in my NRE [non-resident external] account in India for 10 years,- said S. Majumder, an Indian expatriate. (1 lakh = 100,000).
Majumder has to pay around RO460 every month for a period of two years and after 10 years he will get around Rs35 lakh. "This money is totally tax free in India if you keep it in NRE account,- he said.
There is another catch. Here, he has to pay an interest rate of seven per cent flat in a personal loan, while he will get nine per cent per annum compound interest as return from banks in India.
"At any moment you decide to move out of Oman, just repatriate the money back. Then also you can make huge money from the interest rate,- he added.
Some Indians are even taking loans from banks here to close the liabilities back home. "I bought an apartment in 2007 in Kerala with a housing loan of Rs25 lakh from a nationalised bank in India. As we are getting the best value for the rupee these days, I took a personal loan from here so that I can clear my housing loan,- said Benoy Kattokaran, a sales executive working in Muscat.
Benoy took the housing loan at 6.25 per cent floating rate in India, which rose to 13 per cent at one point, but it's 12 per cent now. "My first priority is to repay my home loan so that I can live a peaceful life,- he quipped.
Confirming this, Sasidharan K.P said that a large number of Indian expats are sending up to Rs25 lakh at one go now. "This is the maximum money you can remit from here on one day. Next day, you can send another Rs25 lakh -" there is no bar on sending money from here,- he said.
When contacted, a senior official of BankMuscat, however, said there are chances of the rupee falling even more. "This is simply because there are problems within India and things are not looking good globally. So, chances are there that this rate might reach Rs145 when one dollar crosses Rs55 in India,- he explained.
Sasidharan said the amount of cash being sent to India alone had gone up drastically in the last few days. "Our figures of remittances made to India through our bank during the last few days indicate an increase of 10 to 15 per cent as more and more white-collar workers are remitting cash -" a practice most common among blue collar workers,- he said.
Interestingly, India is the highest recipient of remittances from all over the world and last year they got around $64 billion. "From Oman the remittance figure was around $3 billion last year,- Sasidharan said.
Muscat: As the rupee hit a record low against the dollar, Indian expatriates are cashing in on the situation -" sending home more money than ever.
With the Omani rial now fetching more than Rs142, as against Rs100 a few years ago, every Indian living in Oman now earns 42 per cent more (if Oman inflation is excluded) without a salary hike.
Take the example of a labourer who would send Rs20,000 home a few years ago; today, he can send Rs28,400 without any increment in his salary.
According to Sasidharan K.P., general manager, Global Money Exchange Company LLC, a large number of Indians are even going for huge personal loans from the banks here so that they can remit cash in bulk, to take advantage of favourable exchange rate. "I had applied for a personal loan of RO10,000 from a bank here and on Wednesday I got the cheque. Immediately I fixed Rs14.1 lakh in my NRE [non-resident external] account in India for 10 years,- said S. Majumder, an Indian expatriate. (1 lakh = 100,000).
Majumder has to pay around RO460 every month for a period of two years and after 10 years he will get around Rs35 lakh. "This money is totally tax free in India if you keep it in NRE account,- he said.
There is another catch. Here, he has to pay an interest rate of seven per cent flat in a personal loan, while he will get nine per cent per annum compound interest as return from banks in India.
"At any moment you decide to move out of Oman, just repatriate the money back. Then also you can make huge money from the interest rate,- he added.
Some Indians are even taking loans from banks here to close the liabilities back home. "I bought an apartment in 2007 in Kerala with a housing loan of Rs25 lakh from a nationalised bank in India. As we are getting the best value for the rupee these days, I took a personal loan from here so that I can clear my housing loan,- said Benoy Kattokaran, a sales executive working in Muscat.
Benoy took the housing loan at 6.25 per cent floating rate in India, which rose to 13 per cent at one point, but it's 12 per cent now. "My first priority is to repay my home loan so that I can live a peaceful life,- he quipped.
Confirming this, Sasidharan K.P said that a large number of Indian expats are sending up to Rs25 lakh at one go now. "This is the maximum money you can remit from here on one day. Next day, you can send another Rs25 lakh -" there is no bar on sending money from here,- he said.
When contacted, a senior official of BankMuscat, however, said there are chances of the rupee falling even more. "This is simply because there are problems within India and things are not looking good globally. So, chances are there that this rate might reach Rs145 when one dollar crosses Rs55 in India,- he explained.
Sasidharan said the amount of cash being sent to India alone had gone up drastically in the last few days. "Our figures of remittances made to India through our bank during the last few days indicate an increase of 10 to 15 per cent as more and more white-collar workers are remitting cash -" a practice most common among blue collar workers,- he said.
Interestingly, India is the highest recipient of remittances from all over the world and last year they got around $64 billion. "From Oman the remittance figure was around $3 billion last year,- Sasidharan said.
© Times of Oman 2012
