Sending money to India: Internet remittances for NRI and PIO

Non Resident Indians (NRI) and Persons of Indian Origin (PIO) remit several billions of dollars to India each year. A lot of this is in the form of small amounts sent to family members. Internet remittances, a fast growing service, is an interesting option for them to remit money to India.

There’s a chance that for some of you who have been at the receiving end, the process of getting money from overseas could have been an inconvenient experience. The traditional ways of remitting money come with several encumbrances. You would have found that it takes time to cash cheques, and large charges are levied by the banks. Or in the case of a wire transfer, you could have a tough time trying to locate where your money is held up in the correspondent bank network.

But all that has changed. Communications technology has made the business of international payments fast, flexible and even free at times. The more proactive private banks such as HDFC and ICICI have started internet based remittance services, to serve the needs of those who send small to mid sized amounts back to their home country. Non banking company, Times of Money has also been active in this business.

Now, if a relative overseas wants to send you money, ask him or her to log on to the website of any of the banks that offer internet remittances. Upon completion of a simple account verification procedure, he or she is given a tracking number, which will enable the transfer of funds online from his or her bank account to where it is destined.

Not only is this process simple and paper free, it also gives the remitter a measure of control, since the tracking number helps him or her know where the money is at any given time.

What’s more, money can be sent to remote locations easily. The banks will either transfer the money to their nearest banking branch or deliver a demand draft to the recipient’s doorstep. Even the delivery options are flexible – payments can go into a bank account, be handed over as a draft or be credited to a debit or ATM card.

For the remitter, one more advantage is that there is no need to hold an account in the bank that is being used to make the transfer. Money can be transferred from any of their accounts, even through PayPal.

At a US$ 3 to 5 transaction fee for transfers up to US$ 1,000, online remittances are way cheaper than wire transfers. Even this fee is waived for higher amounts. One can also specify the exact amount that is to be credited in Indian rupees, if need be.

Usually service providers quote a delivery of 3 to 5 working days. That works well for most people. Some online remittance services "guarantee" that the money will be delivered – since all the current players are of high repute, and have the necessary infrastructure and security systems in place, guaranteed delivery is implicit anyway.

The only limitations are regarding the amount of money that can be transferred at a go and within a certain period, which is of the order of a few thousand dollars. Some banks allow higher transfers in special cases. Also, only those based in select countries can make internet remittances to India.

But for a lot of people who want to send some funds to the folks back home, the system works well enough.

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