Outward remittances from India have been rising rapidly. Travel and education account for the highest share of outward remittances. Apart from these, remittances against investments in debts and equity, purchase of immovable property, deposits, donations and gifts, maintenance of close relatives and medical treatments also immensely contribute to outward remittances.
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Akash Sinha, CEO and co-founder of Cashfree Payments, said, “The RBI has mandated that Indians remit money via LRS transactions only with the authorised dealers (ADs). These can be banks or financial institutions that the RBI permits to process LRS outward remittances. Although ADs are the regulated entities by the RBI for LRS transactions, fintech and payment gateways can partner with ADs and provide a fully digitalised and compliant solution with technology. This process helps promote the smooth processing of cross-border transactions.”
Several banks and financial institutions offer outward remittance services. Here are some ways to send money abroad:
SWIFT network/ wire transfer: This is an electronic way to transfer funds abroad from one bank to another. Sinha said, “Banks handle the major chunk of outward remittances. However, three more money transfer operators dominate the market: Western Union, MoneyGram, and Ria. You can use online services to transfer funds immediately without any paperwork, and the transactions only take up to 24 hours to complete. Users must submit information like beneficiary account details and SWIFT code for these transfers. Online services provide competitive exchange rates and have no hidden charges applicable to them.”
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For most people and businesses, bank wire transfers remain affordable and convenient. These wire transfers are facilitated through the SWIFT network, ensuring fast delivery within 24 to 48 hours.
Demand draft: You can use this facility to make prepaid payments while sending money abroad. To send money via demand draft, you must visit the nearest bank branch and fill out the complete draft form mentioning recipient details and the funds you want to transfer. While the method is cost-effective, it can be time-consuming too.
International money order: This is the cheapest and safest way to send money abroad. You can place a money order by visiting banks or postal services to convert the currency into the desired country’s currency. Once the beneficiary receives the money order, he can easily cash it in at any post office or cooperating bank. While it is the safest way of money transfer, it is time-consuming.
Online transfer: With UPI going global, one can quickly pay money abroad through smartphones. Few banks currently offer online money transfer services to carry out outward remittances through Netbanking, a mobile app. You can avail these services anytime and from anywhere. You need an internet connection to transfer money via a mobile app.
“Each method caters to different needs, providing competitive exchange rates and secure transfer processes, accommodating the requirements of individuals and businesses alike,” said Sinha.
