There was a time when sending money to India was a hassle that every non-resident Indian (NRI) had to grapple with. India has a long history of regulation of foreign funds being channeled into the country. India’s central bank, the Reserve Bank of India (RBI) lays out strict guidelines to adhere to when transferring money into the country. However, today there are far more convenient and flexible methods of transferring funds to India than before. In this article, we survey these methods.

There are 5 ways to transfer money to India. These are:

• Bank Wire Transfer
• Money Transfer Companies/Agents
• International Bank Draft
• Online Money Transfer

Let us take a look at each of these methods in detail.

Bank Money Transfer

This is one of the oldest methods of transferring money to India.

Advantages:

• Since it is routed via a bank, this is a very secure means of transferring money.
• Attractive exchange rates
• Typically, these entail a moderate service/processing fee
• Both small and large sums of money (in excess of $2500) can be transferred via this method

Disadvantages:

• Subject to the stringent processing requirements that banks follow, as a result these can take 2-3 days of time
• Transferring large sums of money require a lot of paperwork
• Recipients need to have a bank account, no direct cash payment to beneficiary
• Inter bank transfers entail slightly longer processing times

Money Transfer Agents/Agents

Money transfer companies are also a traditional payment method. There are a number of companies such as ThomasCook and Western Union Money transfer that have been operating in this space for several years. The sender must remit money at one of the agent’s offices abroad, and the benefactor can collect the money in Indian rupees at any of the agent’s offices in India

Advantages:

• Typically, this method of payment is faster than bank transfer
• Beneficiaries do not need bank accounts, they can receive direct payments in cash
• Some companies offer delivery of cash to doorstep

Disadvantages:

• Cash transfers are limited (typically Rs. 50,000 or less)
• Transfers possible for non-commercial purposes only
• Higher processing fees
• You need to physically go to the agent’s offices to transact

International Bank Drafts

Most Indian banks have branches abroad that let you draw a demand draft, that can then be mailed to beneficiaries in India. This draft can be placed in any of the banks branches across the country.

Advantages:

• Secure, since they are routed through banks
• beneficiary can receive money directly in Indian currency, when he/she encashes the draft at a bank
• Moderate processing fees and attractive interest rates

Disadvantages:

• One must physically go to the international branch of one’s bank to draw this draft
• Longer processing times since the draft needs to be mailed to the recipient and then processed by the bank when he/she claims it

Online Money Transfer

With the advent of the internet and the conveniences it offers, there has been a shift in the preferred way to transfer money towards online methods. With simple transaction methods, attractive exchange rates and  fast processing times, online money transfer companies are the most modern and hassle free way of remitting money to India.

Advantages:

• Payment can be made online via credit card or debit card at the click of a button
• Transfer of funds from just about anywhere to any bank in India
• Attractive exchange rates and reasonable processing fees
• Transfers take less than 48 hours to urban Indian cities (under 72 hours to rural areas). For some emergency transactions schemes, processing can be done within minutes.

Disadvantages:

• Cash payments are limited by an upper limit (Rs.50000 typically)
• For personal purposes only, commercial transfers are generally disallowed

Now we look at some of the popular Online Money Transfer companies: 

Xoom:

• Payment from U.S based bank account possible, in addition to credit and debit cards
• No processing fee upward of $1000 (and when paying via bank account)
• Locked in interest rates (rates do not change when transaction is in process)
• ICICI, Punjab National Bank, HDFC, SBI, Axis Bank, Citibank and many more
• Money reaches beneficiary’s account within 24 hours

Money Gram:

• Money gram lets you send money to any where in the world from United States
• When you consider India, there are many money gram centers, actually some hundreds in just one city.
• You could send a maximum of 1000$ with out any ID proof and the other person could receive it in cash (upto 1000$), when they show their ID proof and give the confirmation number.
• If you would want to send more than 1000$, you need to have an ID proof and give your SSN details. Money gram would then allow you to send a maximum amount then.
• Money gram is commonly found in any walmarts in the United States.

Remit2India

• Attractive exchange rates (close to market price)
• 5p per dollar up to $5000 when transferring from the US
• No upper limit on amount of money to be transferred
• Money reaches beneficiary’s account within 5 days
• Transfer to 90 banks all over India
• Online status tracker to help you track progress of transfer

Money2India

• Payment via internet banking from most international banks, apart from direct debit and credit card transfers
• Attractive exchange rates and low service fees
• Remit to over 75,000 bank branches across India
• Online tracking facilities
• Ready cash payout from any of the 195 ICICI Bank branches across 23 cities in India.

I have just discussed the most commonly used means of money transfer to India. There are definitely lot more like sbiremit, money2anywhere, etc. Please kindly share what do you use and how helpful it is.