X works in Dubai as a taxi driver. Every month he makes a transfer of 2,000 dirhams (Rs 30,250) to his family in Kerala towards meeting daily expenses, rent and children’s school fee.

He diligently saves an adequate proportion of his income for meeting future financial goals and also for any medical emergency.

Unfortunately, X’s wife meets with an accident and needs to undergo surgery immediately. However, treatment can only begin after the requisite down payment is made. X’s bank informs him that the money will take at least 48 hours to be remitted.

X’s situation is just one example. A lot of Indians have migrated overseas in search of a better future and to earn more money; their families back home are dependent on funds remitted from abroad by the bread earner.

With over 27 million Indians spread across the world, India has the highest flow of inward remittances in the world.

However, there are challenges faced by remitters such as the time gap for the money to reach the beneficiary apart from the choice of channel for remittance.

India has a large unorganised remittance channel (hawala) which is rife with risks, but a lot of remitters use these channels for lack of awareness. There have been several instances of these middlemen disappearing with people’s hard earned money.

An effective solution could be instant transfer through a money transfer company.

Why opt for this

This facility enables instantaneous remittance of money from hundreds of countries across the world to India within a matter of minutes.

In addition to facilitating rapid transfer, the process is hassle-free for both the remitter and the recipient.

Moreover, this channel makes it possible to transfer money even to someone who does not have a bank account.

This factor assumes great relevance in view of the fact that many such transfers are made to remote rural locations where there is limited access to banking facilities.

You can also be rest assured about the safety of your money as the process is tightly regulated by the RBI.

How it works

The remitter simply needs to visit the nearest authorised agent for his chosen money transfer company, present the relevant identification documents and deposit cash.

The beneficiary can collect the money from the receiving agent in his own location, minutes after the sender has effected the transfer.

While speed is one of the key factors, cost and reach are two other critical considerations while remitting money. Following are a few points one must be keep in mind while availinga remittance facility.

Agent network : Since you will be transferring/receiving money through an authorised agent, it is important that you select a service provider with a widespread agent network for easy accessibility.

Exchange Rates : Before choosing a remittance service, you should conduct a thorough research on the rates offered by various service providers.

It is also advisable to time your remittance appropriately in accordance with the exchange rates.

Transfer fee : Another aspect of cost involved in remittances is the transfer fee. This is a processing fee charged by the service provider for aiding a transaction.

This fee can be fixed or floating. It is advisable to select the fixed fee option for high value transactions.

However, for small value transactions, floating fee is more cost-effective since in this option the fee varies according to the value of the transaction.

Documentation : For safe and effective transfer of money, the Government has implemented stringent know your customer (KYC) norms.

These norms facilitate a smoother and quicker transaction process and nullify various risks associated with money transfers.

It is therefore mandatory for both the remitter and the beneficiary to carry a Government authorised identification document.

Regulatory Guidelines for money transfer : An individual can make a maximum of 30 remittances in a year through this route.

Keeping in mind the above points, you can remit money effectively and be assured of the security of your loved ones.

(The writer is Head, Xpress Money Business)

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