The world bank shows that inbound transfers to India currently equal roughly 3% of the country’s GDP. India and other key remittance markets have driven the growth of the sector with a glut of companies offering to convert your currency to INR. But how can you ensure you are working with the best provider?
Ensuring you have partnered with the best company will be subject to your needs. If for example, you send small infrequent transfers to India a fully regulated remittance company with a positive Trustpilot or Feefo rating will more than suffice. Rates are typically attractive and transfers normally incur no fees when compared to banks.
If however, you are looking at making more significant transfers, either for your own personal money transfer requirements or for a business you run or make money transfers on behalf a business, an expert currency broker might be more befitting.
Typically, international transfers when compared to those made by banks to India are very prompt. Those looking at making transfers to India should expect the money to be received within 1-3 days subject to the receiver bank or beneficiary account.
Sending money to India – what you need to know
For those looking to make significant transfer which exceeds £10,000 of currency equivalent. A report must be made to the Indian Revenue Service (IRS). This must be completed by yourself as it can hold up the transfer if not declared beforehand.
A large number of transfers made to India are to relatives. Your relatives will not be liable for taxation, however, if you make a transfer of more than 50,000 INR to a business, they will be liable for the tax.
Non-resident Indians will be subject to taxation on transfers and this charge equates to about 12.36%, payable in fees. Non-resident very often create a nest egg in their place of birth with the most popular ways of investing including
- Fixed deposit bank account – a sum of money is paid into the account for a fixed period and can’t be withdrawn. The initial deposit and any interest are paid once the term is complete.
- Mutual funds – mutual funds pool together a number of fund investment from many investors. The funds typically generate better returns than fixed deposit account but are a riskier investment.
- Real estate – property in India typically deliver steady growth if owned over a number of years. If you are looking at renovating to sell a property at a later stage, make sure the proceeds are sent to the correct account as some can limit future currency repatriations.
- Direct equity – essentially a direct investment on the NSE (National Stock Exchange of India Ltd). In order to invest in this index investors will have to adopt a portfolio Investment Scheme (PINS).
Leading Indian banks
- HDFC – this privately owned bank was created in 1994, it boasts roughly 5300 branches, 13,514 ATM’s and US$170 billion in assets.
- State Bank of India – as the name suggested this bank is state-owned. Was created in 1955 and nationalised just a year later holds US$520 billion in assets, boast 24,000 branches and has a worldwide presence.
- ICICI Bank – created in 1994 ICICI bank boast in excess of 5200 branches and enjoys worldwide coverage. It currently holds US$140 Billion in assets.
- AXIS Bank – with over 4000 branches clients also enjoy worldwide coverage. AXIS currently has US$110 billion in assets and employs 72,000
Transferring money from India
Whilst transferring money to India can be relatively straightforward providing you have the correct documents and IRS approval has been granted for larger transfers, transferring money out of India can only be processed in rupee by residents and NRI’s. Transfers from India typically can only be facilitated by banks and are subject to a lot of scrutiny and limitations.
The permitted reasons to transfer money from India
- Education expenses
- Emigration fees
- Employment
- Care for a close relative
- Medical treatments
- Visa fees
- Police verification
- Visits abroad for private purposes
Setting up an account to transfer money to India
As outlined above you will firstly need to select the provider you are wanting to use. Experts such as Rational FX, Currencies Direct or MoneyCorp offer excellent rates and charge 0 fees. Once selected you will typically have to take the following steps.
- Apply for your account online or by phone
- Submit any required documentation
- Log in and book a transfer or agree on a transfer by phone
- Transfer the pre-agreed amount of currency to convert to INR
- Provide a beneficiary to transfer the rupees to India
You can then await your beneficiary to confirm the rupees have arrived within 3 days.
