With the advancements in technology and banking services, individuals now can easily transfer money abroad with just a few clicks on their smartphones or computers.
In this article, we will discuss various methods and procedures to send money from India to an international bank account under the Reserve Bank of India's liberalised remittance scheme (LRS).
How Indians can use LRS:
The Reserve Bank of India's liberalised remittance scheme (LRS) allows resident individuals to remit up to USD 250,000 per financial year without prior approval from the RBI for investment, expenditure or any other purpose. However, it is important to note that this money cannot be used for margin trading, buying lottery tickets or donations to organisations that pose a security risk for the country.
Prerequisites for sending money through LRS facilities:
- Selecting a specific branch of an authorised dealer bank for all remittances to be made through.
- Completing Form A2 to purchase foreign exchange.
- Supplying their Permanent Account Number (PAN).
- Adhering to the Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines that are prescribed.
It should be noted that banks are not permitted to offer any credit facilities to resident individuals to facilitate capital.
Now let's take a look at some of the methods to send money from India to an international bank account.
Online money transfer services:
One of the easiest and most convenient ways to send money abroad is through online money transfer services. These services allow individuals to transfer money from their Indian bank account to an international bank account at a low cost. Some of the popular online money transfer services are PayPal, TransferWise, and Remit2India. These services charge a minimal fee for the transaction, which is usually lower than the charges incurred by traditional banks.
International Wire transfer:
International wire transfer is a popular method for sending money from India to an international bank account. This method involves transferring money through a bank's SWIFT network. The process involves filling out a wire transfer form at the bank, providing the recipient's bank details, and paying the transfer fee. The bank will then transfer the funds to the recipient's bank account. However, this method is relatively expensive compared to online money transfer services.
Foreign Currency Demand Draft:
A foreign currency demand draft is another option to transfer money from India to an international bank account. This method involves purchasing a demand draft from a bank, which can then be sent to the recipient's bank abroad. The demand draft is payable in the foreign currency of the recipient's country. This method is generally suitable for smaller amounts and is relatively inexpensive.
By using the above methods, individuals can easily transfer money abroad at a low cost. However, it is essential to follow the rules and regulations set by the Reserve Bank of India to avoid any legal complications.