RBI group for remittance charges review

The Reserve Bank of India working group has asked banks to review charges they levy on funds remitted by non-resident Indians (NRIs) into country.

They should also adopt latest technology for handling large volume of NRI remittance transactions. It advised NRIs to route their remittances through a branch of an Indian bank or a foreign bank having a branch in India. They should convert foreign currencies into Indian Rupees at the Indian end to get a better exchange rate.

RBI, in its annual policy for 2006-07, had observed that NRI remittances enjoyed a significant segment of the country's foreign exchange flows.

However, there were concerns on the relatively high cost of remittance faced by the migrants especially for small value remittances.

Banks should improve infrastructure by extending the scope of existing electronic transfer facilities such as real time gross settlement (RTGS) or setting up centralised remittance receiving centres, RBI working group said.

Indian banks should explore tie-ups with more correspondent banks which would bring down the cost for the NRIs at the foreign centres.

The existing cap on number of branches of Indian banks with drawal arrangements with Exchange Houses should be reviewed, RBI group said.