Reserve Bank of India and NRI Remittances



Till a few years ago, Indian banks gave special treatment to NRIs. Inward remittances were given instant credit on ‘at par’ conditions. Foreign currency instruments sent from abroad were credited in India based fairly on RBI’s daily rates. Bank Managers strived to keep a cordial relationship with good NRI customers and knew most of them by name.

Things have changed much of late. The need to make the bottom line look rosy has sidelined commitment to NRIs. Banks have been given more freedom by the Finance Ministry and they have begun to take an unfair cut from NRI remittances. Not only are the banks claiming discount / collection charges, but also dilute the day’s exchange rate for a sneaky profit. There is also some sort of a new government levy on discounted banking instruments. Another trick is to hold on to your money for a few days and exchange the transferred amount for the worst rate in three days. I personally had such an experience from an online money transfer agency called ‘Quickremit’, the link to which can be found on the very website of HDFC Bank among others.

Quickremit offers on line what is called the ‘Day’s Notional Rate’ and this has got nothing to do with the money you get ultimately. Any complaints you send are answered by a headless virtual monster that takes you around in circles and talks gibberish.

It is high time RBI took a careful look at this scenario. Most NRIs are not businessmen laying a pipeline to India, but just plain working folks, and quite helpless. Soon NRIs might choose not to send an extra Pound or Dollar to their accounts in India. They might choose to transfer only the exact amount to cover a loan repayment or another commitment. Curiously, there is a thriving, perfectly legal, parallel banking market in India that offers an exchange rate which is a good 70 paise to the Pound more than my nationalised bank. And if I do not want a receipt, it would be about almost a Rupee more. (Here, I am not talking about some smuggler’s agent in Varkala or Valiathura).

Mind you, even an average Indian city has quite a few of such licensed exchange agents on its main streets. Now, someone at RBI should advise an NRI whether he should send a few hundreds every month to his bank or whether he should bring along a few thousands in cash and visit the exchange centres.

I am a moderately patriotic man and would be glad if my modest remittances would help my nation’s economy and foreign reserves. But also, I hate to stand by and watch the sly bankers take away my hard earned cash under my very nose.

It would be very constructive if RBI would step in and insist that the bankers offer an exact exchange rate each day as stipulated by RBI and minimum handling charges and commission, if at all the same are necessary. Also, there can be an online banking portal for RBI, something that works through the new fangled core banking, which takes the money directly from NRIs and forwards it to the respective accounts AFTER a fair exchange. Banks like HDFC, Bank of Baroda etc are already using such privately owned online agents, one of them the aforesaid ‘Quickremit’.

I hope the RBI does something positive. Or one of these days, the privately owned Exchange Companies in India might take over RBI’s Foreign Reserves. God forbid.


  • Looks like the good days of the NRIs are coming to an end. There was a time when Ministers lauded their efforts openly. Under the excuse of ensuring NRI welfare, they still make several foreign trips each year, mainly to shop for their wives or for a discreet glass of bubbly and other associated entertainment. Often the guests of barely legal recruiting agents and assorted spin artists, they seldom look into the real issues.
  • The day’s RBI exchange rates can be found at under ‘Current Rates’. This significantly varies from the ones actually offered by the banks each day.
  • I did try to leave a letter highlighting the above issues at the RBI feedback page. But it was rejected with the comment ‘Enter Valid Query’, a standard evasiveness expected more from a corporate house.

One response to “Reserve Bank of India and NRI Remittances

  1. Only a PIL (Public Interest Litigation) can solve this issue and alternatively the mail can be sent to RBI Ombudsman and Union Finance Ministry.

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