6 Must-Know Guidelines on Availing Money Transfer Services in Punjab
The money remittance market in India is one of the biggest in the world. A record number of people are transferring money abroad and the figures are reaching new heights every year. Projections for even further expansion have been able to show just how much potential is still there to explore in the money remittance industry. With money transfer services in Punjab, Delhi, Maharashtra and many other states in India becoming even more household, there are a number of guidelines being laid down. These guidelines aim to make the process safer and smoother for the customers.
Maximum Limit for Money Remittance by an Indian Citizen:
According to the Liberalized Remittance Scheme (LRS), an Indian citizen who is a resident can transfer a maximum of USD 250000 in one financial year. This amount can be transferred either all at once or broken down into multiple transfers.
Producing PAN Card:
PAN card has been made mandatory for all money remittance transactions. Earlier PAN cards were required to be produced only for transactions involving sums exceeding USD 25000. However, since 2018, this rule has been amended and now PAN cards are necessary to remit any sum of money. This has been implemented to ensure that the limits imposed by the Liberalized Remittance Scheme are maintained.
Institutions Approved for Offering Money Remittance Services:
The Reserve Bank of India is the supervisory body in India for all financial institutions, including institutions that offer money remittance services. Under the licence from the Reserve Bank of India, only two categories of institutions can offer money remittance services:
● Banks (Authorised Dealer I)
● Money Exchange Companies ( Authorised Dealer II)
Only these licensed institutions are permitted to conduct money remittance services in Punjab, Delhi, Karnataka, West Bengal and other places in India. Wallets like Paypal are not authorised by the Reserve Bank of India. They can only be used for payment against invoices raised by foreign businesses whose services have been availed by a citizen in India. These transactions fall under the category of business payments and are not considered under the Liberalized Remittance Scheme.
Mandatory Documents for Outward Money Remittance:
The following documents are mandatory for outward remittances in India:
● Purpose of remittance
● KYC documents
The requirements of KYC documents are self-explanatory. The Reserve Bank of India insists on knowing the purpose behind transferring money abroad for various reasons, mainly financial security.
Types of Banned Transactions:
There are several rules regarding banned transactions when it comes to money remittance services from Punjab, Gujarat, Chandigarh, Andhra Pradesh, and in fact all over India.
- Items banned under Schedule 2 of the Foreign Exchange Management Rule, 2000 like lottery tickets, banned products, sweepstakes, etc. cannot be paid for through remittance.
- The purchasing of FCCB that have been issued by Indian companies in foreign secondary markets through remittance is prohibited. Remittance is also prohibited for trading in foreign exchange.
- Money remittance to countries demarcated as “non-cooperative countries and territories” by the Financial Action Task Force (FATF) is prohibited.
- Money remittance to individuals or entities that are deemed as a risk related to acts of terrorism is banned.
Types of Money Transfers:
As of now, the Reserve Bank of India permits only two types of transfer methods:
● Wire or telegraphic transfer
● Demand draft
It is mandated that the money to be transferred must be sent to the bank or the preferred money transfer company through online bank transfer only like NEFT, RTGS, payment gateways, etc. Cash or cheque are not allowed. The origin of the money to be transferred must be from an Indian resident’s personal bank account.
These guidelines are in place by the concerned authorities to mandate a safer market for money transfer services in Punjab, Haryana, Tamil Nadu, Kerala and all over India. Following these guidelines will help customers experience a smooth process without any issues.