Remittances give boost to economic stability The confidence of around 25 million NRIs around the world is leading to doubled remittances
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■■Ishtiaq Ali Mehkri emittances are an indispensable component of foreign exchange for any country, and reflect the stability of its economy. India is fortunate enough to retain the top position as recipient of remittances from its diaspora, who sent in around $69 billion during the fiscal year 2017. This accounts for roughly 4 per cent of country’s GDP. The figures are set to rise as Indians abroad have cultivated renewed interest in the economic policies of the current government, and it is hoped that an increase of 9 per cent will be posted in remittances. A major chunk of India’s remittances come from the Middle East, which houses the largest number of immigrant workers. The plus point is that a large number of expatriates in the UAE and Saudi Arabia are affluent people, and by virtue of investments and profits are major
foreign exchange contributors back home. Likewise, India has the world’s second largest population and a booming economy, which has inadvertently contributed to the health of its foreign exchange earnings. Moreover, India has more than two dozen banks and other financial and insurance-related entities listed in the UAE, and they are doing a roaring business dealing with deposits, mortgages, remittances, wealth management and overseas stakeholder investments. The UAE is home to more than three million Indians, and they have contributed 34 per cent of total outward remittances in 2017. The estimates go beyond $4.5 billion per quarter. Incidentally, depreciating value of rupee, especially against the green back, has increased the value of foreign exchange received at the destination. A large number of expatriates (NRIs) residing in the Middle East, Australia, Europe and the US chose formal financial
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UAE Exchange
NRIs cash in on the Rupee dip UAE Exchange notes rise in remittances to India with rewards in store
institutions and money exchange avenues to transfer money back home. This not only reflected the confidence of around 25 million NRIs around the world, but also the faith in financial institutions, a marked departure from yesteryears reliance on ‘hundi and hawala’ systems. In terms of remittances, India ($69 billion) is followed by China ($64 billion) — though world’s most populous state and second largest economy; the Philippines ($33 billion), and Egypt ($20 billion). These statistics go on to confirm India as the largest source of labour for the world market. Upheavals in global economy have also led to more remittances to India. The fall of the Indian rupee is a case in point. The rupee has lost nearly four per cent of its value since the start of 2018, and is said to be the second-biggest loser in the BRICS group. Higher oil prices and the monetary correction that New Delhi came up with its currency are other factors associated with it. Oil accounts for the highest import bill in the country followed by gold. Moreover, the Indian rupee has crossed the threshold of 18.5 rupees, against a UAE dirham. This is why exchange houses in the UAE
have witnessed more remittances to India after rupee started its fall recently, leading to around 10 per cent increase in remittances. The World Bank says that India’s remittances are expected to grow at 2.5 per cent in 2018. India was also categorised as the top remittance receiving nation from the UAE in the fourth quarter of 2017. India received a total of Dh14.8 billion, which comprised 34.2 per cent of the total remittances worth Dh43.2 billion from the UAE during the fourth quarter. The health of Indian economy and its sustainable policies are driving more and more foreign exchange back home. Coupled with this is the inroads that expatriate Indians have made in global economy, contributing their best to the financial soundness back home. The trend and culture of investing money back home in the form of cash deposits in their respective accounts, building homes and setting up industrial ventures will go a long way in ensuring sound foreign exchange remittances. The psychological barrier of $100 billion is no big deal to cross taking into account the resilience and aptitude of Indian expatriates. — mehkri@khaleejtimes.com
India retained its title of being the top recipient of remittances globally, with $69 billion in 2017, as per the recent World Bank report. And with the current favourable economic conditions, remittances from the Indian diaspora continue to be high. For instance, the unexpected depreciation of the Indian Rupee against the US Dollar in the last few weeks accelerated remittance volumes to India when compared to the previous month. Many non-resident Indians (NRIs) residing in the UAE were seen queuing up at financial institutions and transferring money back home. One such financial house was UAE Exchange, a leading money transfer, foreign exchange and payment solutions brand in the country that offers a broad range of financial solutions at competitive rates to its customers. Apart from the opportunity to remit more, what also attracted the NRIs while sending money through UAE Exchange was the prospect of winning the mega prize of $100,000 in the brand’s ongoing summer promotion ‘Win Big. Win More.’ The beauty of the promotion is that it is open to all communities. Any customer who is remitting via UAE Exchange retail or digital channels, exchanging foreign currency, reloading gocash card, investing in National Bonds or is a Smart Pay employee collecting salary from UAE Exchange, is eligible for the draw. Open till June 16, customers transacting during the promotion period also stand a chance to win daily cash prize of $2,500, weekly cash prize of $5,000, and surprise gifts through onground and online contests. With the onset of Ramadan, UAE Exchange foresees remittances to India further jump as this is the time when most of the Indian expatriates send money to their loved ones.
Remittances to India
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India records upsurge in remittances
This growth is likely to continue into 2018 on the back of strong economic conditions in advanced economies
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■■ Issac John
ndia retained its position as the world’s top remittance recipient as global remittances rebounded 7 per cent to $613 billion in 2017, from $573 billion in 2016, driven by higher oil prices and a strengthening of the euro and rouble, according to a recent World Bank report. Remittance inflows improved in all regions and the top remittance recipients were India with $69 billion, followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion), Nigeria ($22 billion) and Egypt ($20 billion), the Bank said in its latest “Migration and Development Brief” report. In 2018, remittances are expected to continue to increase by 4.1 per cent to reach $485 billion. Global remittances are expected to grow 4.6 per cent to $642 billion in 2018, said the report. The upsurge in remittances to India is likely to continue into 2018 on the back of stronger economic conditions in advanced economies (particularly the US) and an increase in oil prices that
should have a positive impact on the GCC countries. Promoth Manghat, Chief Executive Officer, UAE Exchange, said that the surge in transfers is mainly due to strong economic conditions in developed economies like GCC, US and Europe. “The rise in oil prices has further impacted the same. Indian economy’s promising growth, depreciating INR and speculation on interest rate increase triggered remittances, especially high ticket transactions.” As per the UAE Central Bank report, the total remittances outflows from individuals in the UAE stood at Dh164.4 billion, with India being the primary receiving destination accounting for 35.2 per cent of the total outflows at Dh57.9 billion, said Manghat. Adeeb Ahamed, Managing Director, LuLu Financial Group, said that while global remittance picked up due to strong economic revival in the developed nations, including Europe and the US, there was limited growth for remittances from the GCC region to outside countries. “In 2018, we expect remittances to
pick up on account of recovery of oil prices, which might give scope for better employment opportunities and weakening of currencies. By and large, the geopolitical situation in the region that results in the hike in oil prices is the major factor which is dictating the currency movement currently,” said Ahamed. While India retained the top position with nearly $69 billion in remittances, it has reversed the previous year’s decline by a substantial percentage. However, remittances to other south Asian countries including Pakistan, Bangladesh and Sri Lanka remained rather subdued. “While remittances are growing, countries, institutions and development agencies must continue to chip away at high costs of remitting so that families receive more of the money. Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues,” said Dilip Ratha, lead author of the World Bank report. The World Bank noted that South Asia had the lowest average remittance costs of any world region (at 5.2 per cent) in the first quarter of 2018 while the global average cost of sending $200 was 7.1 per cent in the first quarter of 2018, more than twice as high as the Sustainable Development Goal (SDG) target of three per cent. Some of the lowest cost corridors (in 2017), originating in the GCC and the Association of Southeast Asian Nations countries, had costs below the SDG target. Longer-term risks to growth of remittances include stricter immigration policies in many remittance-source countries. Also, de-risking by banks and increased regulation of money transfer operators, both aimed at reducing financial crime, continue to constrain the growth of formal remittances. Major barriers to reducing remittance costs are de-risking by banks and exclusive partnerships between national post office systems and money transfer operators. These factors constrain the introduction of more efficient technologies, such as internet and smartphone apps, and the use of crypto-currency and blockchain in remittance services. — issacjohn@khaleejtimes.com
LuLu Exchange
Enhancing innovation, delivering happiness A trusted brand with easily accessible and widely networked branches Countries in the GCC are home to more than 25 million expats from across the world. Adding to this, millions of visitors drop by each country every year for short and long vacations. Furthermore, the region is fast becoming the business hub of the world, with many developments in the pipeline ranging from infrastructure to technology to commerce and trade. The growth story of the region has enhanced the flow of money in and out of the region. Services like currency conversion, transfer of funds between banks accounts, remittances, personal or business loans, financing and future savings, have all vastly increased over the past few years. In relation to the increased need for financial services, companies in the region have evolved likewise to cater to the expat community. LuLu Exchange, an ISO 9001: 2015 certified organisation, with easily accessible and widely networked branches across the region, acts as the go-to financial services
outlet for expats. With products like ‘LuLu Now’, which allows immediate credit to designated bank accounts instantly, LuLu Exchange remains at the forefront of technological innovation in this sector. The upcoming ‘LuLu Money’ app will have various features including instant online transactions, payment tracking in real time and payment history, among others. With plans to move nearly 30 per cent of its transactions on to the digital platform by 2020, LuLu Exchange is committed to remain on the digital fast track. Besides remittances, customers can exchange foreign currency at competitive rates and avail other valueadded services like credit card payments and mobile top-up for their home country, among others. The organisation also offers its customers the Gold Card, which allows them to obtain a host of benefits at LuLu Exchange bureaus, and discounts at various other shopping and hospitality partners. LuLu Exchange currently has over 180 branches spread across UAE, Oman, Kuwait, Qatar, Bahrain, India, Seychelles, Hong Kong and Philippines.
Remittances to India
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Mashreq
The changing trend in remittances with digital banking Technology is brining convenience, predictability and choice to customers The remittance space in the UAE has traditionally been dominated by the money exchange companies. Banks kept away from this space in spite of having the banking relationship with the customer. Up until a few years ago, sending money home for expatriates consisted of a physical visit to the intermediary, funding it with cash and paying high transaction fees. Even as other parts of banking became convenient and cashless, this service did not change much. This anomaly started changing in the last few years. As the banking system across countries started moving towards instant or near instant local bank transfers within the country, the opportunity to provide customer convenience opened up. Banks in the UAE started offering this service and invested in technology to provide convenience, speed and lower charges to its customers. To put some context, the size of the remittance market in the UAE is huge and it is the fourth largest outward remittance market in the world. As per Central Bank data, in the Q4 of 2017 alone, expatriates remitted Dh43.2 billion out of the UAE. Of these 70 per cent were to seven countries, with India topping the charts at Dh14.8 billion or 34 per cent of the total outflows. The cost of remittance is a
real issue. The global average cost of remittance is 7.13 per cent which is extremely high. While the south Asia region benefits from being the cheapest cost receiving region, Sub Saharan Africa remains the costliest region to send money to where the cost can be as high as 9.44 per cent. Increased regulation and scrutiny of the cross-border flows is also now emerging as a global trend across all jurisdictions. This comes with the challenge of ensuring that legitimate remittance carries enough information so that it passes all scrutiny. Hence the post transaction service provided by the remitter in case of any unforeseen circumstance would be considered while choosing the remitting partner by the consumer. If one looks at the volume of remittance and cost of transfers and the regulatory challenges which are emerging, selecting the right partner to send money is an evident need. The advent of Digital Banking has given the consumers the choice to remit money in the most convenient manner using online or mobile banking with reasonable fee and
charges. The Quick Remit platform from Mashreq is a great example of technology being used to bring customers convenience, predictability and choice. It ensures immediate account transfers at attractive exchange rates for customers who wish to send money back home with predictability and information back flow. Through the bank’s online banking platform and mobile banking application Snapp, the safe and secure service enables account transfers to most of the leading banks in India and Pakistan within a matter of minutes from the comfort of their homes and from their bank account. What’s more there are no fee charges for this service and it offers extremely attractive rates. Through this service, Mashreq has made it possible for its customers to send money instantly at an extremely low cost. With the recent deprecation of the South Asian currencies, the remittance volume is again seeing a surge as expatriates make the most of the opportunity and Mashreq’s Quick Remit is the perfect service to use for this occasion.
The Quick Remit platform from Mashreq is a great example of technology being used to bring customers convenience, predictability and choice. It ensures immediate account transfers at attractive exchange rates for customers who wish to send money back home with predictability and information back flow.
Send money instantly Mashreq’s Quick Remit to India caters to the evolving need of effective, convenient and efficient money transfers Rohit Garg, Senior Vice President - Head of Business Banking, Mortgages and Remittances at Mashreq, speaks to Khaleej Times about remittance trends to India. Excerpts: The UAE is home to a large Indian community; tell us about the current remittance trends among expatriates. India is the largest recipient of remittances in the world. In 2017 alone, non-resident Indians remitted $69 billion, which is 9.9 per cent more than 2016. The UAE is home to 3.3 million Indians who tend to send money for a variety of reasons, be it for family, savings, etc. The trend is similar for Indians here as well and they contributed 34 per cent of the total outward remittance volume annually. In Q4 2017, the UAE remitted $4 billion to India. How have remittance channels in the UAE helped standardise the system? Physical locations were preferred for sending money historically and standing in a queue with cash in hand was a normal remittance experience. The trend is changing over the years where more and more customers are moving towards digital channels for remittances. Mashreq’s introduction of Quick Remit to India was an endeavour to cater to the evolving need of effective, convenient and efficient money transfers. Quick Remit to India from Mashreq allows its customer to send money instantly 24/7 at competitive rates from bank’s online channels. Have you noticed a rise in expatriates seeking loans?
Rohit Garg , Senior Vice President - Head of Business Banking, Mortgages and Remittances at Mashreq
(perhaps due to the depreciating value of the Indian rupee). If yes, please elaborate the reason in relation to remittances. There is a spurt in remittances when the receiving country currency deprecates, however, majority of the remittance are routine payments. Depreciating value has increased the value received at the destination. The holy month of Ramadan is also the time when expatriates want to send money home for their families and we see a similar trend this year.
Remit wherein upon eligibility, you can get a personal loan along with very attractive exchange rates, reduced fees, etc., for remittances. However, we also advise clients to borrow responsibly as per their ability to repay. Tell us about the convenience Mashreq has established in this case — i.e. online and mobile apps, and if any, the rewards that accompany the service. Mashreq offers a state-of-theart Quick Remit service to transfer money instantly to India on its online platform and mobile application called Snapp. This is a 24/7 service with very attractive exchange rates and currently has no transfer fees.
What finance options and assistance does Mashreq offer to customers looking to remit to India? We have a product called PL
YOU DON’T HAVE TO BE THERE TO MAKE A DIFFERENCE. INSTANT MONEY TRANSFERS AT ZERO FEES. With Quick Remit to India, you’ll enjoy: • Instant transfers • Zero transfer fees* • Attractive exchange rates • 24/7 access with MashreqOnline and Snapp • Access to all banks in India
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Remittances to India
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Competitive rates for convenient transfers Universal Exchange Center offers low charges to NRIs with speedy remittances via reputed banks
UNIVERSAL EXCHANGE CENTER “Excellence in Services”
BEST RATES IN THE TOWN REMITTANCE TO INDIA SEND MONEY TO INDIA AT BEST EXCHANGE RATES AND COMPARATIVELY LOW CHARGES
Universal Exchange Center provides Money exchange, Remittances and WPS payroll services to diversified clientele since 2006 and offers excellent remittance services to India via arrangements with all major banks. The company has been established to serve its customers’ needs efficiently and gained the status of a reputable and trusted institution. Since inception, Universal Exchange has attained a fledgling name in the UAE market with positive objectives and currency business expertise coupled with the diverse business and Remittances/WPS payroll products under its umbrella. The centre has tie-ups with major banks and speed remittance service providers globally and specialises in sub-continent and Far East regions. Universal Exchange Center is the top choice for Indian expatriates and offers the best exchange rate and comparatively low charges to NRIs for speedy remittances including flash transfers via reputed banks.
Our other Services • Foreign Currency Exchange (Retail & Wholesale Buying & Selling)
• Send and Receive Money in Minutes via various services worldwide. • WPS Payroll – Salary Transfer facility through WPS Branch Network Dubai Head office: Deira Tel: 04-2288810 Sharjah: Rolla Tel: 06-5639573 Ajman: Lucky Roundabout Tel: 06-7455001 Abu Dhabi: Musaffah Tel: 02-5555807
Universal Exchange Center has tie-ups with major banks and speed remittance service providers globally and specialises in sub-continent and Far East regions.
Passionate in building relationship The exchange possesses 25 years of service excellence Hadi Express Exchange was established in the year 1994. Mohammed Sharif Al Hadi, an ex-executive of UAE Central Bank with financial acumen and rich banking experience, is the person behind the establishment and success of Hadi Express Exchange. The Hadi Express Exchange is supported by officers from South Indian Bank. Presently,
the company has eight branches spread across five emirates of the UAE viz Dubai, Sharjah, Ajman, Fujairah and Ras Al Khaimah. The exchange has strong presence towards remittance to India, Sri Lanka, Nepal, Bangladesh, Pakistan and other Asian countries. Hadi Express Exchange is an authorised agent for money transfer services – Western Union, Instant Cash and EZ Remit. The Company is a member of Foreign Exchange and Remittance Group (FERG), the one and only association of the exchange companies in the UAE. Hadi Express Exchange has received permission by the
Central Bank of the UAE to distribute salary under the Wages Protection System (WPS), which was introduced by the Ministry of Labour, Government of the UAE. Customer delight is its prime aim and their satisfaction is its motive of growth.
Hadi Express Exchange is an authorised agent for money transfer services – Western Union, Instant Cash and EZ Remit.
Customer-centric culture The leading financial service provider offers the highest levels of service Al Fardan Exchange is one of the oldest and most established names in the UAE remittance market and is an industry pioneer. The exchange has been serving communities with remittances, currency exchange and financial services for over 46 years. Al Fardan Exchange recently won the Dubai Business Excellence Award for the category of ‘Best Service Performance Brand’ under Dubai Service Excellence Scheme (DSES) for Money Exchange Services. This award compliments the story of excellence in the service provided by the exchange since its inception and is an encouragement for the brand to pursue more commitment and dedication towards its valued customers. The exchange is proud to be presented with this distinguished award, which sets a higher objective for it to maintain and to exceed the quality of service and be closer to its clients. The company is a customer-centric organisation, as all employees have a clear mandate to provide the customer with the highest level
Osama Al Rahma, CEO of Al Fardan Exchange
As a token of appreciation to all its valued customers, Al Fardan Exchange has launched its summer promotion campaign to recognise and appreciate the trust which customers have put in the brand. In line with the Year of Zayed, Al Fardan Exchange has initiated this campaign by rewarding more than 100 winners every day for 60 days with a total of 6,202 winners in total. Each winner will go home with various prizes ranging from cash to Samsung smartphones and the grand prize will be Dh50,000, which will be given to two lucky winners at the end of the promotion.
of service. Participation in the DSES programme has provided the exchange with a clear insight and a real measurable tool to evaluate its service from an
independent point of view. This has paved the way for deployment of technology and strategic plans to transform digitally to offer the latest service and products.