India is known to be very restrictive when it comes to the movement of funds both to and from the country. RBI, India’s central bank and financial regulator likes to keep a tight check on inflation and the health of the economy. However, as a result of this, the amount of scrutiny that is done for foreign remittances is quite significant. It is relatively easier to send money to India but to send money from India can be a challenge at times, especially in case the reason for the fund transfer is out of the ordinary.
Banks are the only entities in India that are allowed to process a foreign remittance. Certain forex companies also provide the same service but the final transfer happens only through the banks. In case you want to send money out of India, the first thing any service provider will ask you for is the purpose (reason) for the transfer. There are certain RBI approved purposes for which outward remittances are allowed and then there are some purposes for which RBI specifically disallows foreign remittances. Some of the commonly accepted purposes are:
1. Maintenance of close relatives – This purpose covers paying for any expenses that a close relative living abroad might incur
2. Education – This purpose covers paying for either one’s own educational expenses abroad or the educational expenses of a close relative abroad. Things such as foreign tuition fee, boarding, supplies and even the personal expenses incurred due to the person being abroad are all covered under this scheme
3. Immigration – This purpose covers sending money from India in case someone is immigrating abroad
4. Employment – This purpose covers sending money from India in case someone takes up employment abroad and needs to transfer his/ her funds to his/ her new country of residence
5. Medical – This purpose covers medical expenses that might be borne by an Indian citizen while abroad. This purpose also covers the case where someone from India travels abroad to get a specific procedure done. Lastly, this purpose covers the expenses borne by an attendant that may travel with the patient
6. Personal transfer abroad – This purpose covers making a personal transfer from a person’s Indian bank account to his/ her own bank account in another country
7. Purchase of real estate abroad – This purpose covers transfer of funds from India to purchase real estate abroad
8. Investment in stocks/ other foreign investment – This purpose covers transfers made abroad for the purpose of investing in foreign securities such as stocks, futures, commodities etc. abroad
9. Gift/ donation – This purpose covers paying for gifts or donations made to someone abroad. This purpose can be used for most other miscellaneous types of transfers
Apart from the purpose, there are many other things that restrict a foreign remittance transaction such as documentation and fund transfer limits. To learn more about how to send money from India, visit www.bookmyforex.com. The website also allows you to book an outward remittance order online and guides you the whole process quickly and accurately.
The author have great experience in finance industry. In this article the author has discussed about foreign remittances.