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 |
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