Remittances proportional to economic progress

Money transfers from NRIs can create huge opportunities in India

Published: Thu 22 Sep 2022, 10:21 AM

The UAE is home to around 3.4 million Indians who have come to the Gulf nation for better living standards and a good source of income. The UAE gives them the ideal platform to fuel their needs as well as those of their families back home. Over the last couple of years, as the UAE economy has grown, so has the growth of remittances and these play a major role as a source of spending in India. According to a Khaleej Times report, the UAE closely follows US as the second top-most nation with non-resident remittances.

With indications that inflation in India may be rising, NRIs can use the opportunity of depreciating rupee rate to invest in properties or indulge in assets that were dearer before. Despite the Covid-19 crisis and inflation, the total amount of remittance flow has continued to grow across the world including India. NRIs living in the Gulf, who remit billions of dollars home every year will gain significantly with the fall in the value of the Indian currency.

India is by far the world’s largest recipient of remittances. According to the World Bank, the country received $87 billion in 2021, showing a growth of 4.6 per cent. China and Mexico come next, with $53 billion in remittances each. Remittances from the UAE now account for 17-18 per cent of India’s total inward remittances, the Reserve Bank of India said in an article on the impact of Covid-19 on remittances.

Since India is the largest remittance receiver, one cannot undermine the significance of remittances in its development process. Several macroeconomic studies reveal that remittances contribute to India’s current account deficit by financing a large part of the balance of trade deficit. Moreover, remittances have positive implications for the overall output growth through their direct utilisation for consumption and investment. At a macro level, remittances support growth and are less volatile than other private capital flows, tending to be relatively stable through the business cycle. At a micro level, remittances benefit recipient households in developing countries by providing an additional source of income and lower incidences of poverty.

Remittances help recipient households to increase spending on essential goods and services, invest in healthcare and education, as well as allowing them to build their assets, both liquid (cash) and fixed (property), enhancing access to financial services and investment opportunities, according to a recent Oxford report.

But remittances are not just about sending money home. It is also about taking charge of the opportunity for best rates in the market. With current rates changing on a day-to-day basis, it is prudent that exchange houses create the right technology tools to fast track the process when the time is ripe.

Remittances from the UAE to India have increased after the currencies fell to record lows in the last few months, the volume of growth being 12.5 per cent for Indian rupees compared to last quarter, Khaleej Times reported.

With the value of dirham strengthening against the rupee at a brisk rate, now is the right time to get the best value when you send money home in India. Money transfer businesses now have a new dimension to their services in the form of digital remittance. There are many remittance services and apps that let you transfer money with a simple click. The advent of digital remittances has drastically reduced transfer times that were once a regular feature in the realm of remittance services. Al Fardan Exchange offers the best-in-class online remittance services with its integrated online remittance platform that gives users the flexibility and accessibility to transfer funds securely, wherever you are, whenever you need. Also using contactless technology and a digital wallet on any smartphone, tablet or smartwatch, you can now pay securely and conveniently instead of a debit or credit card. Visit any Al Fardan Exchange branch to load or top-up your digital wallet to start paying smart. The Al Fardan Exchange centres provide competitive exchange rates on all international currencies through its wide network of UAE branches.

Why choose Al Fardan Exchange

The exchange house offers a myriad of options to choose from making it convenient for you to send money home.

Door to door service: No more standing in line for your beneficiaries. You can be rest assured that your cash will be delivered to their doorstep via personalised services.

Bank transfer: You can remit to your bank account in quick steps. One of the fastest methods to send money online with competitive rates.

Cash pick-up: If the beneficiary is in a hurry to pick cash, they can pick it up from one of the partner networks of Al Fardan Exchange anywhere in India.

Credit to mobile wallet: Digital wallet is inarguably an emerging choice to transfer money. Using contactless technology and a digital wallet on any smartphone, tablet or smartwatch, you can now pay securely and conveniently instead of a debit or credit card. Visit any Al Fardan Exchange branch to load or top-up your digital wallet to start paying smart.

Online: Easiest and smartest way to remit money via desktop or mobile. All you need is an internet connection.

According to the latest World Bank data, remittances to low- and middle-income countries reached $605 billion in 2021. That’s a growth of more than 8 per cent compared to 2020 – and it is way beyond initial predictions.

In India, remittances are projected to grow three per cent in 2022 to $89.6 billion.

— Source: World Bank

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