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India's Central Bank the Reserve Bank of India (RBI) is considering whether to allow online money transfer portals and other non banking entities to offer outward remittance services from India. Currently such facilities are limited to inward remittances and only banks are permitted to provide outward remittance services.
Sources say that the RBI has been approached by a number of providers asking for permission to offer outward remittance services through their channels. The regulator in theory has agreed and is in the process of establishing the "Know Your Customer" regulations.
The first half of the ongoing financial year has witnessed outward remittances to the tune of $ 431 million, marking a sharp rise compared to $440.5 million during the full financial year of 2007-08, according RBI data. Under Money Transfer Service Scheme (MTSS) personal remittances can be transferred from overseas to beneficiaries in India. Only personal remittances such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible under the scheme.
Sources, according to the Business Standard say that the RBI may soon approve online outward remittance facilities as well for Indian customers. Money transfer operators such as Western Union Money Transfer, and Moneygram are currently not allowed to offer outward remittance facilities in India. Money changers such as Wall Street and Thomas Cook offer outward remittance facilities not on a real time online basis. Outward remittances in India are mostly done at bank-branch levels, and there is an annual remit limit of $200,000 for each customer.
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