Sending money abroad could be cumbersome and expensive. Pawan Chadha realised this when he wanted to transfer some money to his daughter studying in the US. A public sector bank, though cheaper, required him to do a lot of paperwork. This would have delayed the transfer. On the other hand, a private sector bank was willing to do it fast but at thrice the cost.
State Bank of India, for example, charges Rs 250 per transaction and takes up to three working days once the paperwork is done. HDFC Bank charges Rs 500 for $500 and below and Rs 750 for more than $500. Even HDFC Bank takes up to two days to transfer.
Hariprasad MP, head, treasury & banknotes business at CentrumDirect, says there are two components of outward remittance, speed and cost. Wire transfers are expensive but faster. If a person has time, a demand draft denominated in the foreign currency works out the cheapest but would take seven to 21 days for clearance. There are also additional postage charges. Some banks have added foreign transfers to their internet banking account, which is as convenient as doing an internet banking transaction.
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ICICI Bank’s Money2World recently entered this space, with a facility that makes the entire process online, making it faster. This includes the Know Your Customer (KYC) procedure and other formalities. The bank will charge a flat fee of Rs 750 for the transaction but if the money is transferred before 3 pm, it reaches the beneficiary within one international working day. Else, it will take two days.
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Any resident Indian can use his or her bank account to transfer money outside the country to another bank account. The transfer can happen with 16 currencies, including the Arab Emirates' dirham, Saudi Arabian riyal, Danish kroner, Norwegian kroner, and New Zealand dollar, other than the popular ones.
To use the service, a person will need to register at the website by filling an online form and uploading PAN and Aadhaar details, compulsory for KYC. If you don’t have any, you can’t proceed further. The bank says the details will be approved in one working day. Then, add your bank accounts and the beneficiary's.
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When you want to transfer, you will need to choose the beneficiary, provide details for the purpose of remittance and choose the payment mode between National Electronics Funds Transfer System (NEFT) or Real Time Gross Settlement (RTGS).
The person can only use Money2World for eight types of payments, including education, emigration, employment, maintenance of close relative, medical treatment and private visit. The charge is a flat Rs 750 (tax extra) per transaction, irrespective of the transfer amount. Thomas Cook and CentrumDirect give additional service like a doorstep facility. While Thomas Cook charges a flat fee of Rs 750, CentrumDirect's depends on the amount, the lowest being Rs 250.
The limit for transfer is restricted at $25,000 a month for ICICI Bank customers; for non-customers, it is $25,000 a year. The Reserve Bank of India caps the total money that can be remitted outward at $250,000 a year.