Inward Remittance: Meaning and Step-by-Step Guide

A considerable number of people nowadays are going to foreign countries and settling down for their professional lives there. For these people, inward remittance has become an important aspect. One of the important reasons for being sending money to their family members back to their native country. 

So what does inward remittance means? Inward Remittance means transferring money from one account to the other account. The transfer might be domestic or international in nature. In some of these cases, the money that is being remitted into India is governed by the Foreign Exchange Management Act or FEMA. In case of an international money transfer, the guideline of Inward Remittance also means that the financial institution that is transferring the money is liable to issue a Foreign Inward Remittance Certificate. The certificate is of utmost importance. It proves that the money that is flowing in and out of the country is coming from a legal source and it is not linked with terrorist organisations, criminal sources or any such activity termed ‘illegal’ under the law.  

 Although India received one of the highest remittances, there are strict guidelines laid down by the RBI for inward remittance. There are two ways through which a bank can remit the money inwardly, the Rupee Drawing Arrangement (RDA) and the Money Transfer Service Scheme (MTSS)

When it comes to RDA, the Indian banks work with accredited foreign financial institutions and allow cross-border transactions. Through this process, the money would end up in the individual’s bank account without any hassle. There is no specific upper limit for the individual transaction of the RDA. But the business transactions do have limits when it comes to RDA. 

The other way of Inward Remittance is the Money Transfer Service Scheme (MTSS). In this scheme, globally renewed money transfer services work together with their Indian counterparts to transfer money to the Indian banks. But there are several repercussions for the MTSS. There is an upper cap of US$2500 for an individual when it comes to MTSS. Apart from this, an individual can’t do more than 30 transactions in the year. So, it is not good for any kind of charity or donation funding but should be evaluated carefully for other uses. 

So what are the benefits of the inward remittance? Here are some important points that you should always remember while going for an Inward Remittance: 

• The money that is remitted goes directly from a bank account to another bank account. There is no third person involved in the transaction. So, there is no chance of cheating or forgery in the case of inward remittance. One can send money and his sensitive information is kept confidential and far from anyone’s reach.
• The money that is being transferred to the bank account can be spent by the individual on things such as education and healthcare. This wouldn’t have been possible had it been an aid.
• With the Inward Remittance, the person who is receiving the money has much more sovereignty over spending the money. So, the person receiving the money can have a free hand in using the money wherever and whenever he wants.
• When the money is sent by someone, he is sure that the money will be spent in the right way. This gives more assurance than official aid.

The process of inward remittance is extremely simple. Here are the steps through which you can apply for an inward remittance:

Step 1: The remitter has to request for remittance with the bank through which he/she should be remitting

Step 2: The remitter bank will then instruct its corresponding NOSTRO bank to complete the remittance process and transfer the money. 

Step 3: The respondent of the remitting bank then would instruct the NOSTRO correspondent of the concerned bank where the money would be transferred and then the remitted money will be transferred to the remitted amount. 

Step 4: The concerned bank’s NOSTRO correspondent then would credit the amount to the beneficiary bank. 

Step 5: Finally the beneficiary bank would finally transfer the money to the concerned customer’s account after they get a satisfactory statement of the statement of purpose. 

With Standard Chartered’s inward remittance, you get a number of added advantages such as exchange rates that are preferred by the NRI customers, a zero processing fee for the remittance, instant online remittance etc. The remittance facility is available from SCB accounts from several different geographical spaces as well. 

As you can understand, there are a lot of banks that can give you a hand on the Inward Remittance. So, it is essential that you choose the right bank. One of them is Standard Chartered. With the global outreach of the bank, you can easily make inward remittances with easy terms and conditions.   

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