Sending money home to India is an important element of the Indian living abroad. He may wish to send money to India to care for elderly parents, pay school tuition for his children, pay bills or continue work on a new home. These money matters are of the up-most importance and choosing the best way to see that the funds are transferred safely is critical. There are many options available for transferring money. Each option has its advantages and disadvantages. Before the expat sends his money to India, he should have a complete understanding of the process, the costs associated with the transfer, the exchange rates used and the security issues. It was not too many years ago when the only ways to send money to India was by wire transfer or through the use of a remittance agency. Today, there are other ways to accomplish the transfer. Wire transfer: A wire transfer is commonly called a SWIFT transfer. It is a way to send money directly from your foreign currency account in the country where you live to the recipient’s rupee account in India. To accomplish a wire transfer, the norm is to visit your bank, fill in the form with all detail and give the transfer instructions to the remitter bank. The charges to wire money are quite high; they can be as much as $25 and as they are being arranged through a bank, the exchange rates are often poor. Many times, the actual cost of the transaction is not known when the transfer is arranged. The total cost all depends on the charges that are incurred by correspondent banks, known as third parties. The use of bank to bank services guarantees high security, but the costs are high and there is no confirmation given at the time as to when the money will arrive. At times, it may take a week or more for the money to be available to the recipient in India. Agency transfer: Another way to send money to India is through the use of an agent. For this method to be used, the remitter, once he has located a local correspondent, has to give the agent the funds in cash, along with specific instructions for the transfer. Instructions are then sent to the agency closest to the recipient’s home and the money is delivered, in cash, to the beneficiary. Similar to wire transfers, the costs are quite high and the exchange rates are often poor. The disadvantages also include risk as you have no way of assessing the agent’s performance. On-line transfer: This method allows people to send money directly from their home, there is no need to visit a bank or an agency. There are a number of on-line services so it is suggested that you check their exchange rates, any fees that are levied on both ends and the transfer time.
