Remittance

About Remittance

What is Remittance?

Remittance is derived from the word 'remit' which means 'to send back'. Remittance refers to money that is sent or transferred to another party, usually overseas. Remittances can be sent via a wire transfer, electronic payment system, mail, draft, or cheque.

Remittances can be used for any type of payment including invoices for business purposes or other obligations like personal transfers made to family and friends.

According to the World Bank, 2019 Migration and Development Brief, $529 billion in remittances were sent to low and middle-income countries in 2018. An increase of 9.6% over the previous record high of $483 billion recorded in 2017. India, due to its large diaspora and overseas expats population, remained the top receiver of remittances in 2018 and in 2017 as well.

Why remittances are on the rise

1. Migration among people who choose to live abroad for jobs or studies is increasing. Therefore, many remittances are made by people who want to send money back home.

2. Businesses have increasingly relied on the internet as it makes connecting and collaborating with suppliers, employees and clients easier. This has resulted in overseas remittances paying for business invoices.

Remittances to India

Under the Foreign Exchange Management Act (FEMA) of 1999, Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) can open and maintain three types of accounts namely, Non-Resident Ordinary Rupee Account (NRO Account), Non-Resident (External) Rupee Account (NRE Account) and Foreign Currency Non Resident (Bank) Account – FCNR (B) Account. NRO Accounts are not repatriable except for all current income. UAE, US and Saudi Arabia are the top three countries that have seen a growing amount of remittances being sent to India.

Latest Updates on Remittance

Premium

Increase in TCS under LRS is to target discretionary spending: Revenue Secy

TCS on remittances made under the LRS was introduced in 2020

Updated On: 03 Feb 2023 | 11:33 PM IST

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RBI orders SBM Bank to stop transactions under remittance scheme

The scheme allowed Indian residents to freely remit funds abroad up to $250,000 per financial year

Updated On: 23 Jan 2023 | 7:25 PM IST

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Pace of remittance inflows has slowed for India in the past decade

Cash transfers increased in absolute terms but the rate of growth decelerated

Updated On: 11 Jan 2023 | 4:42 PM IST

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Financial inclusion, remittance cost focus areas in G20 meeting

In Kolkata, apart from the plenary meetings, there would be a symposium that would see participation of 12 international speakers

Updated On: 08 Jan 2023 | 11:08 PM IST

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Outward remittance under LSR dips 28% to $1.92 bn in Oct, shows RBI data

International travel contributed over $970 million or 50 per cent of $1.92 billion remitted by Indians in October 2022

Updated On: 20 Dec 2022 | 10:45 PM IST

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Abuse of Liberalised Remittance Scheme for offshore betting under CBIC lens

Separate investigation on home-grown online gaming companies shows tax evasion of up to Rs 80,000 crore

Updated On: 02 Nov 2022 | 10:45 PM IST

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Banks in talks with Singapore's DBS to begin real-time remittance system

At least five Indian banks, including the State Bank of India and ICICI Bank, are in discussions with Singapore's DBS Bank to start a real-time remittance system using UPI as the backbone

Updated On: 07 Sep 2022 | 10:33 AM IST

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Asia-Pacific may see up to $54.3-bn remittance loss due to Covid-19: ADB

The ADB said that employment in host economies of Asian migrants is contracting significantly

Updated On: 09 Aug 2020 | 7:54 PM IST

India world's largest remittance recipient in 2015: World Bank

It retained its top spot in 2015, attracting about $69 billion in remittances, down from $70 billion in 2014

Updated On: 14 Apr 2016 | 2:35 PM IST