India for lowering remittance costs
Cross-border transfers have the potential to contribute to economic growth, financial inclusion, and digitisation efforts in India
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It brings convenience, cost effectiveness, speed, transparency, and security for the beneficiary and will benefit the Indian economy in multiple ways - CA Krishnan R, Director & CEO, Unimoni Financial Services, tells Bizz Buzz
Cost Advantage
- Cost reduction increases remittance inflows
- And, also creates vantage for India’s UPI for global penetration
- WTO, EU supporting India’s proposal
- UPI-enabled cross-border transfers boost foreign trade
Mumbai: India’s proposal to lower the cost of cross-border remittances will benefit the economy in multiple ways, on its implementation. Further, WTO and other countries are also supporting it. India has garnered support from many World Trade Organisation (WTO) members, including the European Union (EU), for its proposal to reduce the cost of cross-border remittances.
Cross-border transfers have the potential to contribute to economic growth, financial inclusion, and digitisation efforts in India. They will also facilitate smoother international trade and financial transactions.
A cost reduction can’t only increase the inflow of remittance to developing countries like India, but also create vantage for the country’s Unified Payments Interface (UPI) for global penetration.
Talking to Bizz Buzz, CA Krishnan R, Director & CEO, Unimoni Financial Services, says: “It brings convenience, cost-effectiveness, speed, transparency, and security for the beneficiary and will benefit the Indian economy in multiple ways.”
Indian citizens sending money to family members, friends, or for personal reasons from abroad can benefit from the convenience, lower costs, and faster processing times offered by UPI-enabled cross-border transfers. They may experience reduced transaction fees, quicker transfer times, and greater control over their remittance transactions. Indian businesses involved in import and export activities can benefit from UPI-enabled cross-border transfers by streamlining payment processes, reducing transaction costs, and minimising delays in trade transactions, he said.
India’s initiative in pushing for adoption of digital payments in remittances is a significant move which can have far reaching consequences. India, being the world leader in digital payments, is in a vantage position to push this move. Presently, the cost of cash remittances is excessive, around 6.18 per cent since a few large players dominate the market.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, says: “This will change on adoption of digital transactions since it will promote competition and enhance transparency. Individuals sending remittances and individuals/households receiving remittances will be major beneficiaries if the costs can be brought down below three per cent and eventually to two per cent.”
India being the largest recipient of remittances in the world will stand to gain. The macro impact from higher and more cost-effective remittances will be positive with marginal benefits to the domestic currency too.
