INDIA
BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...
NRIS MAY BE ALLOWED TO SEND $5,000 AT A TIME SOON
The legal channels for NRIs to send money home will soon be more attractive, with the Centre planning to double the amount per transaction allowed through money transfer operators (MTO) like post offices. Currently, an NRI can send a maximum of 12 transactions in a calendar year, each not exceeding $2,500, as per RBI regulations. This amount may be upped to $5,000.
This would spread cheer, especially among low-waged NRIs, as high-volume transactions are now out of the purview of the remittance business coming through this route. Since the charges for funds send through MTOs are far higher than those through the banking route, doubling the amount per transaction would make life easier for low-waged NRIs.
An RBI working group report on NRI remittances has found that the cost of sending money from the US ranged between $22 to $39 per transaction through the MTO route. From the Gulf states, it stood at about $6 per transaction.
Policy mavens hope that upping the ceiling would also clip the attractiveness of the hawala route for sending in money. “The government is keen on revising the limits for remittances to curb the hawala route,” a government official said. Though there are no official figures, experts estimate that a sizeable chunk of the total remittances to India could be through the hawala route
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