NRI remittances touched the magic figure of USD 24.1 billion in 2005-2006, making India the largest recipient of personal money transfers in the world. Remittances and flow of funds from migrant workers to India is a key resource in its emerging economy.
Remittance services offered by a host of commercial banks or authorized dealers, and money exchange service providers have speeded up money transfers across borders. Technology (internet) has made cash transfers possible in minutes. Extending the scope of existing electronic transfer facilities would help bring down remittance charges further.
Recommendations by the RBI on remittances-
It has suggested an awareness programme through the banks' web sites to encourage NRIs to use Indian banks or foreign banks having branches in India to transfer money to India.
The RBI has advised banks to minimize costs of remittances by reducing their charges at the domestic end and at the foreign end.
NRIs can affect the remittances in foreign currencies with instructions for conversion into Indian Rupees at the Indian end to get the benefit of a better exchange rate.
Moreover, public sector banks can explore the feasibility of setting up centralized remittance receiving centre, extending the scope of real time gross settlement between banks in India.
