Foreign exchange transfer, or transferring money, or remittance (as it is called) is increasing with a greater emphasis on globalization and integration of India with the global economy. The biggest beneficiaries of foreign exchange transfer facilities are the NRIs, many of whom send money back to parents or other dependants. Every year, billions of dollars worth of foreign exchange is remitted every year to India – in fact – India is the biggest global recipient of remittances from its non-residents, with about USD 55 billion (INR 2,47,000 crores) received in 2009. A sizable proportion of this amount is contributed by the millions of humble workers, especially in Gulf countries, who toil in less than human conditions to save and send money to their homes in India.
Points to Remember before Selecting an Option
When transferring money, various factors may affect your choice of method for remittance. Sometimes, speed is of essence, while sometimes, you may want a cost effective service. While it is desirable to get all these qualities in a single method, it is not always possible in practical terms. Therefore, you should keep he following points in mind while deciding on which service to use -
- Cost of funds transfer
- Speed / Timeliness of funds transfer
- Exchange Rates
- Insurance facility
- Ability to track the funds while transfer – made possible through online portals and websites.
Ways to Transfer Foreign Exchange to India
The major proportion of the money remitted to India is through the conventional channels, which have been operating since very long time in this field. The major ways to transfer money in the conventional manner are as follows -
- Cheques / Demand Drafts – A cheque or demand draft is the simplest method, though it is slowly decreasing in popularity, mainly because it might take weeks to get the instruments cleared. Some banks, like SBI, make this this process easier by offering to make cheques /DD in Indian rupees.
- Wire Transfer / Telegraphic Transfer – This is perhaps the most popular and the fastest way to transfer foreign exchange to India. The funds become available almost immediately in the recipients’ account. This service is offered by all the major banks in India and abroad.
- Western Union / Moneygram – These are specialized money transfer services, and they are gradually increasing in popularity. They have a large network of agents, and the process is usually easy and painless.
- Banks – Almost all the major banks, both private sector and public sector, offer a number of very specialized services for remittances. You can contact your bank for more details. The major players in this segment are SBI, HDFC Bank, ICICI Bank and Citibank.
- Online Portals – Paypal and Remit2India are the major players. While Paypal is usually favored by freelancers who render services to foreign based clients, Remit2India is the favored method of NRIs who want to transfer foreign exchange with minimum hassles.
- Prepaid Cards – This method is also slowly gaining ground, especially among the freelancing community. In this, the recipient is issued a prepaid card by a third party (e.g., Payoneer), which is credited by the employer or the person who is remitting the money. The recipient can then use the card to withdraw money from the nearest ATM.
- Others – There are various other options such as Xoom, iKobo and Moneybookers which are available, and can be used as per the convenience of the parties involved.