Indian Rupee touching all time low levels
Rich Indian of Arab Countries are transferring huge volumes of money to homes in India. NRIs are line up for personal loans, cash advance through credit cards and salary advance to send huge amounts back home so that they can collect high profits.
On Tuesday, Indian Ruppe hit a historic low to 52.54 per dollar. The volume of transfer of funds to India flow 20 % more in the recent weeks mainly because wealthy Indians have taken advantage of the situation to transfer their huge savings.
Since the highest transfer of funds rates came through during the middle of the month, NRIs in the salaried class, who form the biggest portion of remitters to India, have not been able to make the most of the situation.
Though the rupee is predicted to drop further, or stay at around the same rate for some more time when most of the Indian employees receive their salaries, many don’t seem to be waiting for a chance.
Several Indians have approached local banks for personal loan and cash advance through credit cards. Industry sources said that the number of Indians seeking loans has gone up and they cited the depreciate value of rupee as a major reason.
Sources said a group of North Indians in a leading professional services firm dealing with accountancy has taken loans to the tunes of many multiples of their salaries from the Dubai branch of an Abu Dhabi based bank. They said the Indian employees of some construction companies have approached an independent finance company in Dubai for personal loans mainly due to the attractive remittance rates.
“With banks offering flexible payment options, many people are opting for cash advance using credit cards also,” said a sales executive from a UK bank that rolled out a special promotion this week.
Staff at many exchange houses also said that they know of customers who sent home millions of rupees after taking bank loans from Dubai. They said it was the right time for Indians to send money for investment.
“This is the best time for investment back home. It is a good idea to transfer the money to a fixed deposit and get 10 per cent or more interest back home so that you can pay the interest for personal loans here,” said Shamsudheen, who is also the Director of Barjeel Geojit Securities.
“But, those who are taking loans through credit card and those who are investing in land should be very careful. Tomorrow, if there is an emergency situation, no liquidity will be immediately possible in cases of those investing in property. I heard that people are taking loans using multiple credit cards. It is not a good trend. People should take only the amounts that they can easily repay without paying much interest.
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