by Moiz Mannan
Overseas Indians who, in 2012, have once again made their country the world’s top recipient of remittances are being offered increasingly more convenient, faster and less expensive services to send money home.
The latest entity to offer such improved services is the public sector giant, Punjab National Bank (PNB), which recently launched a remittance card specifically to cater to money transfers between the Gulf and the south Indian state of Kerala. Many other banks operating in India, with tie-ups in the Gulf, are also offering more efficient services to NRIs.
According to a recent World Bank report, India is expected to receive more than $70bn as remittances from its diaspora by the end of 2012. The report places China second with $66bn. The Philippines and Mexico with $24bn each and Nigeria with $21bn follow. NRI remittances have been consistent and resilient even in the worst of economic times across the globe. Not just that, the money transfers have steadily increased. Remittances by overseas Indians, together with NRI deposits, are estimated at over $135bn this year.
While a bulk of the remittances from the Gulf countries to India are aimed at supporting families back home, the overall trends in the economy are such that this money has served to infuse life into the consumer markets. No longer can it be confined to the term ‘subsistence money.’ Even otherwise, the vast potential in housing and other infrastructural investments and the reasonably steady performance, of late, of the Indian capital markets, have prompted a rise not just on deposits but in remittances for proxy investments as well.
Depreciation in the exchange value of the Indian rupee, attractive bank deposit rates and a slow but steady easing of norms and red tape have all added up to encourage non-resident Indians, especially those in the Gulf, to send more money home one way or the other. In 2011, the inward remittance into India was to the tune of $66.13bn, about 20 percent higher than $55bn inward remittance seen in 2010.
Banks and money transfer companies have been quick to realise the vast potential in this business and one has seen private as well as public sector entities devise new facilities to attract NRIs. Earlier this month, Punjab National Bank (PNB) launched India’s first co-branded remittance card — PNB Remit Card— in association with UAE Exchange and Financial Services Limited in Kochi. The prepaid card will be beneficial to NRIs and their kin for transferring funds from abroad and for using in merchandise establishments.
When an NRI remits money from abroad through the exchange, its office in India will automatically load the funds and send an SMS alert to the beneficiary. On receipt of the SMS alert, the beneficiary can use the PNB remit card for cash withdrawal from any ATM of for merchandise purchase. This is a non-personalised card that can be used on a pan-India basis. A minimum of Rs500 and a maximum of Rs50,000 can be loaded. The card can be used for 30 transactions in a year and will be valid for 36 months. A maximum of Rs25,000 can be withdrawn in a day. There is a provision to transfer funds from the card account to the savings bank account of the beneficiary.
Private sector major, ICICI Bank, also offers the ‘Money2India Remittance card,’ to provide a convenient and hassle-free alternative to receive remittances from NRIs. It is a rupee denominated card which is re-loadable for funding and can be used at any VISA affiliated ATM and merchant establishments in the country. It allows the cardholder to withdraw cash at any ATMs and make payments at merchant establishments across India. The ICICI bank offering is a zero balance card with no recurring, annual or usage charges. It comes with a validity period for up to 10 years and assures anytime cash withdrawal facility from over 40,000 VISA ATMs. The higher daily cash withdrawal limit is
Rs50,000, and direct purchases can be made at over 650,000 merchant establishments using VISA POS terminals.
When transferring funds through Money2India, overseas Indians also have the option to directly credit any Visa Debit Card of your beneficiary in India. According to bank sources, the funds are transferred to the beneficiary’s account in 3 working days. The senders have simply to login to their Money2India account and transfer funds to the beneficiary. The beneficiary can be located anywhere in India so long as they hold a valid Visa card. This service is free for all money transfers made through Money2India above $1,000 or equivalent amounts. However, ICICI Bank does not take responsible for charges or commission that may be charged by the beneficiary’s Bank.
The Internet is increasingly becoming a favoured mode for money transfer even by blue collar workers. Internet money transfers to India are quick, easy and highly economical. An Internet based money transfer can be done by simply using a credit card or a debit card. It helps to transfer funds electronically to virtually all international locations. This type of transfer is completed in 48 hours if the beneficiary resides in any metropolitan cities across India or 72 hours if the beneficiary resides anywhere else in India. The cost of remittances across various modes has also come down significantly.
While sending money back home, the speed and efficiency of transfer are uppermost on the mind of overseas Indians, as they predominantly use electronic wires and Swift (Society for Worldwide Interbank Financial Telecommunication) for remittances, according to a study by the Reserve Bank of India. Besides efficiency factor, the wider network of Indian bank branches abroad offering electronic fund transfer facilities is seen by the study to influence the decision to use a particular channel.
