Remittance
Remittance is the transfer of money. Such transfer could be any of the following :
- from one person to another person
- from one bank account to another bank account
- one geographical location to another geographical location
The transfer may also involve a combination of one or more or all of the above.
Modes of transfer
A remittance is a part of the regular business of banks. Banks are the major but not the only players in the this market. The market includes the Indian Postal Service (through money orders) and non-bank Authorised Dealers (for foreign exchange transfers). A remittance could be in the form of a cheque, demand draft, pay order or a banker’s cheque. But, in a technology driven world, the term ‘remittance’ has become synonymous with transfer of funds through electronic channels.
Electronic Transfers
Funds can be transferred electronically through a bank by:
National Electronic Funds Transfer (NEFT)
Any amount of funds could be transferred through NEFT. But, for cash based transactions within India, there is a limit of Rs.50,000/- per transaction. The charges (excluding service tax) range from Rs.2.50/- to Rs.25/- per outward remittance transaction
Real Time Gross Settlement (RTGS)
The minimum transaction value has been set at Rs.2.00 lakh. There is no upper limit. The charges range from Rs.30/- to Rs.55/- per outward remittance transaction.
