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Date : Aug 09, 2018
India’s Inward Remittances Survey 2016-17

Today, the Reserve Bank released the results of its survey on India’s inward remittances in 2016-17, the fourth in the series.1 It captures various aspects relating to remittances – source; destination; purpose of inward remittances; size; prevalent mode of transmission; and receivers’/ senders’ cost of remittances. Responses were received from 42 major authorised dealers (ADs), accounting for 98.3 per cent of total remittances in 2016-17. A separate questionnaire was circulated among three major Money Transfer Operators (MTOs) that have large remittance operations in India.

Highlights

  • Remittances to India were mostly routed through private sector banks (74.2 per cent), followed by public sector banks (17.3 per cent) and foreign banks (8.5 per cent) [Table 1].

  • 82 per cent of the total remittances received by India originated from eight countries, viz., the United Arab Emirates, the United States, Saudi Arabia, Qatar, Kuwait, Oman, the United Kingdom and Malaysia [Table 2].

  • Kerala, Maharashtra, Karnataka and Tamil Nadu together received 58.7 per cent of total remittances [Table 3].

  • The rupee drawing arrangement (RDA) is the most popular channel of remittances which accounts for 75.2 per cent of remittances, followed by SWIFT (19.5 per cent), direct transfers (3.4 per cent) and cheques and drafts (1.9 per cent) [Table 4].

  • Size-wise analysis shows that 70.3 per cent of all reported transactions were of more than US$ 500 and only 2.7 per cent were of less than US$ 200 [Table 5].

  • More than half of remittances received by Indian residents were used for family maintenance, i.e., consumption (59.2 per cent), followed by deposits in banks (20 per cent) and investments in landed property and shares (8.3 per cent) [Table 6].

  • Cost to the remitter for sending remittances through RDA is relatively low in the case of private /foreign banks [Table 7].

  • The cost of receiving remittances through the RDA route is lowest in the case of public sector banks [Table 8].

  • MTOs operate mostly in the cash-to-cash services segment which accounts for 96.8 per cent of the total remittances routed through them [Table 9].

  • The cost of sending remittances through MTOs using the cash mode varies between 0.6 to 11.1 per cent, depending upon the size of remittances [Table 10].

Ajit Prasad
Assistant Adviser

Press Release : 2018-2019/361


Table 1: Bank-wise Distribution of Inward Remittances
Per cent
Bank Group Share in Total Remittances
Private Banks 74.2
Public Sector Banks 17.3
Foreign Banks 8.5
Total 100.0

Table 2: Country-wise Share in Inward Remittances
Per cent
Source Country Share in Total Remittances
United Arab Emirates 26.9
United States 22.9
Saudi Arabia 11.6
Qatar 6.5
Kuwait 5.5
Oman 3.0
United Kingdom 3.0
Malaysia 2.3
Canada 1.0
Hong Kong 0.9
Australia 0.7
Germany 0.6
Italy 0.05
Philippines 0.03
Others 14.8
Total 100.0

Table 3: State-wise Share in Inward Remittances
Per cent
Destination State Share in total remittances
Kerala 19.0
Maharashtra 16.7
Karnataka 15.0
Tamil Nadu 8.0
Delhi 5.9
Andhra Pradesh 4.0
Uttar Pradesh 3.1
West Bengal 2.7
Gujarat 2.1
Punjab 1.7
Bihar 1.3
Rajasthan 1.2
Goa 0.8
Haryana 0.8
Madhya Pradesh 0.4
Orissa 0.4
Jharkhand 0.3
Uttaranchal 0.2
Puducherry 0.2
Chandigarh 0.2
Jammu and Kashmir 0.2
Assam 0.1
Himachal Pradesh 0.1
Chhattisgarh 0.1
Others 15.5
Total 100.0
Note: “Others” also includes those remittances for which banks could not identify the specific destination and therefore covered such transactions under “Others”.

Table 4: Mode-wise Remittances Transfer
Per cent
Mode of Transfer Share in Total Remittances
RDA/Vostro Account 75.2
SWIFT 19.5
Direct Transfer 3.4
Others (including Cheque and draft) 1.9
Total 100.0

Table 5: Size-wise Distribution of Remittances
Per cent
Size of Remittances Share in Total Remittances
Less than or equal to US$ 200 2.7
Between US$200 - US$500 27.0
Greater than or equal to US$ 500 70.3

Table 6: Purpose of Remittances
Per cent
Purpose of Remittances Share in total Remittances
Family maintenance (i.e., consumption) 59.2
Deposits in Banks 20.0
Investments (landed property /equity shares/etc.) 8.3
Others 12.6
Total 100.0

Table 7: Cost of Sending US$ 200 and US$ 500 to India
Per cent
  US$200 US$500
Bank Type/Mode Public Sector Banks Private Sector Banks Foreign Banks Public Sector Banks Private Sector Banks Foreign Banks
Direct Transfer to Bank Account/Electronic Wire 0-6.7 0-4.0 0-2.1 0-5.5 0-1.7 0-3.1
SWIFT 0-21.3 0-22.7 0-12.7 0-8.6 0-9.2 0-7.7
RDA/Vostro Account 0-13.5 0-11.8 0-8.5 0-5.5 0-4.8 0-14.1

Table 8: Cost of Receiving US$ 200 and US$ 500 in India
Per cent
  US$200 US$500
Bank Type/Mode Public Sector Banks Private Sector Banks Foreign Banks Public Sector Banks Private Sector Banks Foreign Banks
Direct Transfer to Bank Account/Electronic Wire 0-1.5 0-1.9 0-2.0 0-0.7 0-1.1 0-0.8
SWIFT 0.5-4.4 0-12.7 0-13.3 0-2.5 0-6.3 0-5.4
RDA/Vostro Account 0-2.4 0-4.5 0-5.5 0-1.0 0-1.8 0-2.0
Others (Including Cheque and draft) 0-2.3 0-12.6 0-40.4 0-1.0 0-5.1 0-16.4

Table 9: Mode-wise Transfer through MTOs
Per cent
Mode of Transfer Share in Remittances of MTOs
Cash 96.8
Direct Transfer to Bank Account 1.5
Others 1.6
Total 100.0

Table 10: Cost of Sending US$ 200 and US$ 500 to India through MTOs
Per cent
Mode of Transfer US$ 200 US$ 500
Cash 1.5 - 11.1 0.6 - 7.1
Direct Transfer to Bank Account 1.2 - 8.1 0.5 - 5.4

1 The third round of the survey was published in the December 2013 issue of the RBI Bulletin.


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