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NRI Remittance

NRI Remittances refer to the money sent home by NRIs to their homeland or home towns. NRI remittances as equivalent to prevalent remittances in other countries globally; have been playing a pivotal role in economic growth of India just as across the world.

India enjoys the status of receiving the highest remittances in the world. With an increasing number of Non Resident Indians (NRIs) living overseas, either for work or having settled there, flows into the country have certainly grown dramatically in the past few years. The figures have gone up touching US$ 23 billion in 2006, up from US$2 billion a year in the late 1980’s. Interestingly, a large chunk of this money is flowing into the India’s promising property market. 

Several factors have contributed to this increased remittance to India on the part of expatriate Indians or NRIs. The continued tax exemption on interest income has worked as an incentive. In the early 1990s, when the country was experiencing a balance of payment crisis, NRI deposits were given tax benefits for attracting foreign exchange.
An upsurge in NRI deposits can be attributed to incessant tax exemption, attractive interest rates and better facilities provided by banks and finance institutions in India. This has led to a large inflow during FY06 as against the outflow during the last fiscal. Many NRIs also found it attractive to invest in India considering the higher rates of interest as compared to other countries.

After Foreign Direct Investments (FDI), remittances have emerged as the largest external capital source for developing nations like India. Amount of NRI remittances have been exceeding FDI inflows in India for the last few years.  The chart below shows the NRI remittances started rolling over against the FDI in India.

Check out the comparison chart for FDI inflows and NRI remittances in India.

NRI Remittance to India

Remittance Facilities to NRIs is subject To RBI Approval
With RBI changed stand on overseas remittances limits for NRIs and lifting the 10 year lock-in together with better facilities, sending or remitting money to India for investment purpose is not difficult anymore.

  • The limit for overseas remittance has now been lifted for good. It has been doubled from $25,000 at present to $50,000 per fiscal year. NRIs can use the amount for both the current or capital account transactions.
  • NRIs can now cash out on the property they acquire in India and have also been offered an incentive to make investments in Indian real estate. According to the latest guidelines released by RBI, Indians living abroad are allowed to remit the money from the sale of immovable property.
  • As per the prevailing guidelines, NRIs and PIOs can remit the money up to $1 million per year for valid use out of the balances in their non-resident ordinary (NRO) accounts.

Facilities in India to Remit the Money
Banks are now going all out to woo the NRIs.  Some of them have also gone to the extent of launching remittance products with foreign tie-ups. Most banks have seen a 7-8 per cent surge in NRI deposits because of the initiatives and because India has now become a more attractive destination for its expatriates to invest in.

With the help of Money Exchange Service Providers, you can send money directly into any bank account; track your status and make PayPal transfers. Most of these service providers offer, 24x7 Customer Support and Mobile Alerts for your convenience. Also, overseas remittance services have been overtaken by online remittances.

Outlined below are details of prominent money exchange providers in India at a glance:
HSBC Bank: One of the most trusted banks is currently offering FREE Remittances from USA/Canada and NRI Savings Accounts and NRI Services are offered by HSBC India.

Western Union: A renowned money exchange service provider which has tied up with Indian Postal Service. They have thousands of location in every corner of the world and the money can be picked up anywhere. The only disadvantage is that it is quite expensive and there is a limit on the maximum amount transferable.

ICICI Bank: ICICI Bank has tied up with the Wells Fargo Bank. Indians in the US can now send money directly from their Wells Fargo Bank accounts to their beneficiaries' ICICI Bank accounts.

IndusInd Bank: About 35-40 per cent of remittances into India are from the US. IndusInd Bank has tied up with the Bank of New York to offer online remittances.

Dhanalakshmi Bank: It has launched NRI boutiques at eight locations in Kerala. This boutique is a one-stop-shop offering a range of value-added services to NRIs and their next of kin.

Things to watch out for while transferring money:

  • Some online service providers will not refund your money in case of error, claiming inability to reconvert from rupees or other converted currency. Stay away from such service providers.
  • Not all service providers’ offer 24/7 customer service and most of them do not have the same level of efficiency when it comes to customer service.
  • Exchange Rates provided by service providers can vary.
  • There may be limits on maximum amount that can be transferred.





- NRI Investment in India
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