By Vipin Agnihotri
It’s official; Indians are the world’s top remitters. According to latest World Bank report, India received a whopping $27 billion in remittances, beating the likes of China and Mexico. Point to be noted here is that the inward remittances to India has more than doubled from about $12.89 billion in 2000 to $27 billion in 2007.
It is worth mentioning in this regard that in 2006, inward remittances were $25.43 billion, while the outward flow constituted around $1.58 billion. The top five recipients of remittances in 2007 were India ($27 billion), China ($25.7 billion), Mexico ($25 billion), the Philippines ($17 billion), and France ($12.5 billion).
In my opinion, majority of the remittances happen by traditional channels such as Western Union and Moneygram. Online money transfer has also gained momentum in India with the increasing reach of the Internet. The pivotal factor here is that remittances can come in real handy during disasters or emergencies.
It has been noticed that rich countries are still the main source of remittances with the United States heading the list. Most of the experts feel that the recent effort to stop funding of terrorist organizations has had a negative impact on the sending of remittances.
Remittance can be termed as the sum of money paid to someone at a distance. On the other hand, a 'remittance transfer' refers to the transfer of money from an individual, normally a person who has emigrated from her city or country of origin, to another individual, normally a relative who remains at home.
Generally speaking, remittance transfers are basically person-to-person payments and of low monetary value. Two basic categories of remittance transfers are domestic and international. The World Bank and the Bank for International Settlements have developed international standards for remittance services.
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