Unattractive interest rates, better investment options elsewhere and parking of funds in Europe by Keralites living abroad have triggered a fall in non-resident (NR) deposits in the state's banks.

The NR deposits fell from Rs.301 billion in 2003-04 to Rs 291.2 billion in the 2004-05 fiscal, according to the State Level Banker's Committee (SLBC) report released here Tuesday.

This is the first time there has been a fall in NR deposits in Kerala.

"The growth in total deposits in the state during the last fiscal fell because of the fall in NR deposits during the first three quarters," the report said.

"But during the last quarter, the total deposits witnessed a healthy growth of Rs.29,560 million as against a mere Rs.4,790 million in the first three quarters."

P. Mohanan, SLBC convenor and a senior Canara Bank official, explained: "There was a time when banks here offered interest rates of 18 percent on NR deposits, now it's just 3.6 percent. So people have started investing in real estate."

The total deposits in Kerala's banks, however, rose from Rs.659.6 billion to Rs.693.9 billion, but the growth percentage was less compared to the previous year.

The credit-deposit ratio witnessed a huge growth from 48.31 percent in 2003-04 to 59.01 percent in the last fiscal. So the total advances grew from Rs.318.6 billion in 2003-04 to Rs.409.4 billion in 2004-05.

The State Bank of Travancore recorded the highest NR deposits of Rs.68.6 billion followed by the private Federal Bank (Rs.42.8 billion) and State Bank of India (Rs.36.5 billion).

K.P. Thomas, who lived in the Middle-East for three decades, said that gone were the days when people used to invest in Kerala's banks.

"When I was in the Middle-East, there was very little choice but to deposit in the banks here. Now my children abroad have options such as parking funds in tax havens and even investing in real estate in Europe," Thomas said.