The saga of foreign inward remittances.

Author: Ranjit Atwal
Reading Time: 4 minutes

The saga of foreign inward remittances.

Reading Time: 4 minutes

It has become unbelievably easy to open a bank account in India. The efficiency that I observed during my latest “adventure” left me astonished. You read correctly, I said, “easy” and “efficient,” two words I had thought become extinct from my vocabulary in New Delhi. 

I walked into the HDFC branch in Defence Colony, already surrendering myself to an afternoon of form filling and frustration. I came prepared with my ID, proof of address, PAN, and Adhaar Cards to facilitate the process. I’ve learned it’s better to be over-prepared rather than be sent home because one “t” wasn’t crossed or “i” dotted properly. To my delight, the woman at the teller counter handling my case was incredibly helpful. She even carefully filled out the cheque correctly for my opening deposit, leaving nothing to chance, I thought as I signed it. I appreciated the initiative and revelled in a rare glimmer of satisfaction for banking administrative processes. I walked in and out of the branch with a new cheque book and debit card in less than 30 minutes, well under the expected time.Because the cheque book and debit card are both issued without a customer’s name on them, HDFC can provide you with a “starter kit” as soon as you hand over your opening deposit. Compared to my first experience of opening a personal bank account with HSBC about six years ago, today’s HDFC encounter was a joy. 

It seems as though the days of endless forms and waiting are over. Perhaps with the introduction of the Adhaar card, it is easier for banks to complete their “Know Your Client” (KYC) compliance responsibilities. When my account with HSBC was finally opened, and I attempted to transfer money in from overseas, stress was waiting for me with a Cheshire cat grin. How could I have thought it would be simple? You see, back then, a foreign inward remittance had a stringent set of rules that the bank had to follow (that’s what I was told). But I was simply moving my money from an overseas account into my account with HSBC India so that I could pay my deposit for a rental apartment. HSBC was refusing to release my money as they said they needed to investigate the purpose of the inward remittance! My palm couldn’t hit my face any harder. 

I was simply moving my money from an overseas account into my account with HSBC India so that I could pay my deposit for a rental apartment. HSBC was refusing to release my money as they said they needed to investigate the purpose of the inward remittance!

Even after I returned to the branch with the rental contract as proof, they still were not sure. Only when I desperately pleaded and explained that I would be homeless did they finally release my money! OK, I embellished a bit, but I guess they just needed to sap the rest of my dignity to finalize the transaction. I then realised that transferring money from an overseas account was expensive and inefficient. My bank in the UK would charge £25 for an international transfer, and the exchange rate was not competitive either. The bank had a monopoly, and I needed to make my life easier for future transfers. 

So I searched for a solution and came across Transferwise. They provide you with a platform that allows you to capture the actual market exchange rate, and they charge a fee for exchanging and sending your money, cross-border. This service works so well because I can simply send a domestic transfer to Transferwise first (so no international transfer fee!) Then, the funds are sent to my Indian account. When the money lands in my account, usually within hours, it is a domestic inward remittance, not a foreign inward remittance. Problem solved. 

The fee they deduct based on sending £2,500 is less than my bank’s international transfer cost. Plus, I’m no longer at the mercy of a foreign inward remittance “investigation” by the bank, and I can keep my dignity (or what little is left) in the process. 

However, there is something I have now encountered, relatively recently, that is also connected to banking. When using your debit card for a purchase, the card machines that some merchants use, scramble the numbers for the pin entry, so it doesn’t follow the same layout as an ATM. As I find it easier to remember my six-digit PIN, by the sequence or pattern that I follow from the first number, it has left me occasionally stumbling to complete a purchase (especially with the added challenge of a few drinks been added to the mix). Imagine your keyboard re-arranged from QWERTY to A to Z and then trying to touch type. So, I now have remembered all of the six digits of my pin. Another great obstacle overcome and another historical triumph to celebrate. Problem solved.


Editor’s note: Ranjit Atwal is a finance and banking expert. If you need any help with financial solutions, drop an email to ranjit@atwalfinancial.com.

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