The Hindu : Business : `Widen scope of exchange houses'

Online edition of India's National Newspaper
Wednesday, Sep 27, 2006
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`Widen scope of exchange houses'

Special Correspondent

RBI panel favours cost cutting in handling NRI remittances

MUMBAI: The Reserve Bank of India-constituted panel on `Cost of NRI remittances' on Tuesday suggested that the ceiling on the number of branches of Indian banks withdrawal arrangements with the exchange houses be reviewed. At present, there is a restriction on the number of exchange house relationships that an Indian bank can enter into.

Due to this, many mid-sized and smaller exchange houses are unable to tie up with some leading banks and cater to the needs of non-resident Indians.

The panel favoured NRIs routing their remittances through a branch of an Indian bank or a foreign bank having a branch in India.

"NRIs should be advised, as far as possible, to convert foreign currencies into Indian rupees at the Indian end to get the benefit of a better exchange rate,'' it added.

It also suggested to banks to improve their infrastructure by extending the scope of existing electronic transfer facilities like the real time gross settlement (RTGS) and setting up centralised remittance receiving centres "for efficiency and better services'' and widening the scope of exchange houses.

The committee recommended that branches of exchange companies in the Middle East managed by Indian banks or their joint ventures should consider extending the banking hours to enable the NRI working community to access their services beyond their usual working hours.

It recommends that banks in India should review their existing scale of charges both at the foreign and domestic centres and resort to the latest technology for handling large volume of transactions.

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