INTERNATIONAL MONEY TRANSFER FOR YOUR FAMILY MAINTENANCE NEEDS: A BEGINNER’S GUIDE
The globalised environment of the modern world has necessitated a free and fast flow of capital across national borders. However, outward remittance remains a complex topic for many ordinary Indians as they grapple with the regulatory issues surrounding the international money transfer process. Data from the Reserve Bank of India (RBI) shows that Indians sent US$ 18751.4 million abroad in 2019-20. Travel and education together accounted for over 60% of it, while outward remittance for family maintenance formed 18% of the total amount.
As more and more Indians move abroad to pursue new opportunities, international remittance for family support garners increasing relevance. What do international transfers for family maintenance entail? What is the easiest way to send money to family members living abroad? Let’s answer these questions and more in the following sections!
Outward Remittance for Family Maintenance: A Growing Necessity in Recent Times
In the earlier days, foreign remittances for family maintenance resulted in capital inflows. Children settled abroad would send money to their parents in India and support them in running their households. But now, the situation has changed drastically. A large number of Indians emigrate every year to pursue promising opportunities across the globe. Their families in India offer assistance by sending them money with outward remittance systems. RBI categorises these payments as “Maintenance for Close Relatives”. This category can cover several aspects:
- Maintenance of the household while the primary income earner is living in India
- Financial support for close family members related by blood or marriage
- Financial assistance for children who are studying or setting up a livelihood abroad
RBI’s Rules for Outward Remittance: Decoding the Regulations for Sending Money Abroad
RBI has a “Liberalised Remittance Scheme” (LRS), laying down the rules for an overseas transfer. The following points highlight the regulations under LRS:
- Resident Indians (including minor children) are eligible for outward remittances up to US$250,000 in each financial year between April to March.
- These transfers are allowed for capital account transfers, current account transfers, or a combination of the two.
- This limit includes the foreign exchange facilities available to a resident Indian.
LRS does not allow Indians to make capital account transfers to countries that the Financial Action Task Force (FATF) deems non-cooperative. Moreover, RBI issues advisories to banks with the names of people who pose risks of terrorism. Resident Indians cannot send money to these individuals under the LRS. Besides these limitations, the LRS offers substantial flexibility to Indians for sending their money abroad.
How to Send Money to Your Family Abroad?
There are two popular approaches for sending money to family members living abroad:
- Remittance Via Banks: Indians have traditionally relied on banks to manage their international transfers. You can get a foreign currency demand draft (FCDD) from your preferred bank and send it to your family member. They can present the FCDD to their drawee bank and receive the amount. However, this is a time-consuming and complicated process. Nowadays, banks use SWIFT transfers for direct interbank remittances. You can submit your request for a bank transfer and wait for up to five working days. While this is a trustworthy process, it is not as fast and convenient as the modern fintech-enabled remittance services available in the market.
- Remittance through a Money Transfer Platform: Money transfer platforms can help you send money to more than 40 countries from the comfort of your couch. Top outward remittance platforms allow users to send money on the go with their cutting-edge fintech model. The hassle-free system of online money transfers is convenient and quick, helping people manage their family maintenance needs.
Sending Money with Transwire- The Best Money Transfer Platform
Unsure which Forex organisation you should approach? Transwire can simplify your outward remittance woes.
Transwire has the ability in managing international money transfers. They provide an easy-to-use online system to initiate overseas payments for family maintenance needs.
Transwire is a trusted money transfer platform because it ensures secure payments and strict compliance with RBI norms. The RBI has recognised Transwire as an authorised category II dealer, facilitating secure transactions across national borders. We have supported customers in sending money to more than seventy countries and continue to do so with a complete commitment to transparency and customer service.
The process for remitting money with Transwire is quick and effortless. The following steps will help you complete your payment:
- Register on the Transwire site and complete the self-onboarding process.
- Upload relevant documents for making a transaction under LRS.
- Initiate the transaction.
- Book the exchange rate and pay for the transaction.
- Download the SWIFT data or invoice.
Before initiating this process, you should prepare your remittance documents. You will need the following:
- An Identity Card as per RBI norms
- A PAN Card
- A2 declaration
The experts at Transwire can help you understand the documentation process and provide support as you navigate it. The A2-cum-LRS document is an essential requirement under RBI guidelines. You can reach out to the Transwire team and take their assistance in preparing these documents.
The self-onboarding system on the Transwire website is available to you 24*7. However, the remittance process is only permissible during the business hours of your target location. You can speak to your Transwire agent to understand relevant exemptions for this.
Now that you know how easy this process is, it is time to initiate your overseas payment! Contact the Transwire team today to simplify your outward remittances.
