Money Transfers

Group 9
Ayush Sharma Mickey Haldia Prerna Makhijani Sanoj George Sushant Jaggi Nitish Dorle 09 19 29 39 49 59

 Overview
Global Scenario

Agenda

Indian Scenario Rules and Regulations Key Players Emerging Trends Conclusion and Recommendation Case study

Overview
Money Transfers

External

Internal

Import/Export Transfers

Inward Outward Foreign Remittance

FOREX

Local Currency

Global Scenario
The global money transfer market is expected to
grow at an annual rate of 10-12%

Major growth drivers are:

Globalization International Migration Efficiency of money transfers

Money transfer methods

Cash Transfers

Money Orders
Bank Transfers Hawala

Indian Scenario
Inter Bank Transfers - Within the country National Electronic Funds Transfer (NEFT) Real Time Gross Settlement Systems (RTGS) International Money Transfer Foreign exchange dealers Money transfer agents and foreign exchange companies Specialized financial institutions Full-Fledged Money Changers:

Outward Remittances

Liberalized remittance scheme of USD 200,000 for resident individuals FEMA Act 1999 provides the legal framework for administration of foreign exchange Remittances can be made in any freely convertible foreign currency Modes of outward remittances: 1) Wire Transfer 2) Foreign currency demand draft

Procedure/Regulations via banks

Eligibility Indian citizen Limit - USD 200,000 per financial year Documents Outward remittance request letter Form A2: Application-cum-Declaration form Permissible purpose Gift, Donation, investments, remittances Not permissible Under the FEMA act

Form: A2

Transfer via internet

Paypal India Receiving limit raised to USD 3000 per transaction Sending limit varies based on the account (USD 100-2500) Requirements for export related payments : Purpose Code, PAN and a bank account

Major Players
Money Order :
Indian Postal Service

Money Transfer Operators :

Western Union Money Transfer

Online Money Transfer :

PayPal, CCAvenue

Foreign Exchange Providers :

Deutsche Bank

Emerging Trends
Mobile Payments :
Use of mobile phones for transaction purposes E.g. Mobile PayUSA
Use of geo location technology

Cash on Delivery (COD) :

COD services offered mainly by E-commerce Retailers

Cash Before Delivery (CBD) :

Gharpay

Recommendations & Conclusion

Minimise costs of remittances Awareness programmes for NRIs to use Indian banks or foreign banks having branches in India to transfer money to India. Create awareness amongst the public Setting up centralized remittance receiving centre Hawala dealers should be registered and should keep adequate records in line with the Financial Action Task Force (FATF) recommendations

Negatives of Ease of Money Transfer: Case Study-Franklin Jurado

During -1990 Harvad educated economist ran a ML network for Columbian drug lord Jose Santa Cruz Londono complex scheme. ML of $ 36 Million Wiring out from Panam Bank to Merril Lynch and other Institutions 100 bank accounts in 68 countries When a Monaco bank collapsed and a subsequent audit revealed numerous accounts that traced back to Jurado. Also a complaint on his money counting machine made all night by his neighbor in Luxembourg. Found guilty convicted sentenced to prison.

Thank you!