Sending money overseas instantly could soon become a reality with the Reserve Bank of India considering proposals to allow non-banking entities like online money transfer portals to undertake wire transfers for outward remittances from India.
At the moment the facility is limited to inward remittances, while only banks are permitted to carry out outward remittance orders.
According to sources close to the development, the central bank has been approached by a number of players to enable outward remittance facilities on their money transfer channels. The banking regulator is in the process of working out the know-your-customer norms that are to be followed while sending cash abroad via online payment web-portals.
The first half of the ongoing financial year has witnessed outward remittances to the tune of $ 431 million, marking a sharp rise compared to $440.5 million during the full financial year of 2007-08, according RBI data.
Under Money Transfer Service Scheme personal remittances are transferred from overseas to beneficiaries in India. Only personal remittances such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible under the scheme.
The system envisages a tie-up between money transfer companies abroad and agents in India such as authorised dealres and full-fledged money changers, who would disburse the funds to the beneficiaries at prevailing exchange rates. At April-end 2008, there were 26 Indian agents and 11 overseas principals under the MTSS. At present, the system, however, does not allow the repatriation of such inward remittances.
Sources said that RBI may soon approve online outward remittance facilities as well for Indian customers.
Money transfer operators such as Western Union Money Transfer, and Moneygram are not allowed to offer outward remittance facilities in India. TimesofMoney is an online money transfer portal which currently provides inward remittance facilties.
Money changers like Wall Street and Thomas Cook offer outward remittance facilities, but these are not on a real time online basis. Outward remittances in India are mostly done at bank-branch levels, and there is an annual remit limit of $200,000 for each customer.