G20 commit to cut cost of remitting funds to 5 percent

Taking into account India's concerns on the matter, G20 leaders Sunday resolved to take strong and practical measures to reduce to five percent the global average cost of transferring remittances.

"We commit to take strong practical measures to reduce the global average cost of transferring remittances to five percent and to enhance financial inclusion as a priority," a communique by the G20 group leaders said here.

The world's largest recipient of remittances with $71 billion remitted inward last year, India lobbied for a reduction in non-residents remittance costs from abroad, which are currently as high as 10 percent in some countries.

"It's an ethical, logical and economic issue. We are pushing for some understanding in the G20 that the cost should not be more than 5 percent", Railway Minister Suresh Prabhu, who was present at the deliberations, said

India has been able to convince Saudi Arabia to reduce remittance costs to 3.5 percent, he added.

The G20 also recognised the value of remittance flows in helping to drive strong, sustainable and balanced growth,

Noting that remittances to developing countries in 2014 are expected to reach $436 billion, the communique said remittances to and from G20 countries account for almost 80 percent of global remittance flows.

"The G20 recognises the value of remittance flows in helping to drive strong, sustainable and balanced growth. Remittances represent a major source of income for millions of families and businesses globally, and are an important avenue to greater financial inclusion," it said.