Atish Banerjee recently considered taking out a loan in the UAE to park in a fixed deposit savings account in his native India.
The 30-year-old, who moved to Dubai from Mumbai nine months ago, says he had heard it was a lucrative practice.
But after examining the details more closely, he decided against the plan.
“It sounds like a good idea, but my concern is the value of the rupee is not so high right now and interest rates in India have come down,” says Mr Banerjee, who works as an art director at an advertising agency. “I will wait it out. I’d rather do a fixed deposit here in the UAE for now. When things are a bit more stable and the rupee is a little higher, I’ll look at it again.”
In recent years, a number of non-resident Indians (NRIs) have taken out loans in the UAE at relatively low interest rates, which they then place in fixed deposits in India carrying higher rates of interest.