What is a remittance?

Remittance refers to a transfer of money which is then transferred to another person. It is generally accepted that any kind of payment made to an invoice or bill is “remittance. The term, however, is often used to refer to a money sent by a person working overseas to family members at home.

Remittance

The word is derived from the word remit, meaning to return.

Key Takeaways

  • A remittance is a transfer of money to another person, usually one from a different country.
  • The sender is usually an international worker, and the recipient is a relative from home.
  • The remittances of migrant workers are among the most important revenue sources for those living in developing and low-income countries of which they often exceed the direct investment of individuals and international development aid.

Kinds of Money Remittance

Inward Remittance

Inward remittance refers specifically to funds deposited into your bank account from an accounts in India or abroad. As an NRI resident in Canada, if you transfer money to a local bank account in India, then the transfer is known as an inward transfer.

Outward Remittance

If you transfer funds to another country from your local bank account, it’s an outward remittance. For example, if parents from India transfer money to their child who is an international student who is in Singapore, the money transfer service will become an outward transfer for parents.

Payment Methods for Remittance

After having discussed what is remittance and what it means in banking, let’s learn about the different payment methods.

Wire Transfer

Wire transfer is among the most frequently used methods to transfer money. International money transfers could take as little as 3 to 5 business days. Wire transfers are often costly, with some hosts charging high charges to facilitate the transfer.

Bank Transfer

Bank transfers are used to transfer funds between bank accounts. It can be made either locally or internationally. Local bank transfers are trans-border, meaning that deposits are made to an account at a foreign bank.

Apps for money transfer

The growth of technology has led to numerous apps that help facilitate quicker remittances. Making payments through money transfer apps is simple and secure. It is also convenient. The processing time is nearly instantaneous.

Remittance Transaction Limits

  • Limitation on transactions: US$ 10 per transaction, or the equivalent
  • Limits for daily/maximum transactions: US$ 25,000 per transaction
  • Limits for the year Limit: Up to the amount of USD 250,000, or the equivalent

Remittance Documents and Costs

  • Self-declaration on the relation with the beneficiary
  • Government-issued ID proof
  • PAN Card copy for amounts that exceed USD 25,000.

Remittances Costs and Fees

The fees for remittances are typically at a minimum. However, the intermediary or remitting bank might charge a fee. Additionally, you will need to pay the foreign currency conversion fee which is a one-time charge. Taxes on services are also charged.

Remittance and Remission: What is the difference?

Remission

Definition:

  • (n.) (n.) The process or act of giving up, surrendering, or resigning up.
  • (n.) (n.) Discharge from the obligation to surrender a right or right Pardon of transgression release from penalty, forfeiture or debt.
  • (n.) A reduction in intensity (n.) Diminution of intensity; abatement of tension; Relaxation.
  • (n.) (n.) and uncomplete easing of the intensity or force of a disease or pain, devoid of intermission, when the disease ceases to affect patients for an extended period or abatement.
  • (n.) A. The process of returning.
  • (n.) The act of making payment, such as money or the act of remittance.

Remittance

Definition:

  • (n.) (n.) The process of transferring money bills, cash or other similar objects especially. to a remote location to fulfill the demand or the fulfillment of an obligation.
  • (n.) A amount or object that is transferred.

Examples of Sentences

(1) Complete the remissions were not long, and eleven of 14 remitters returned within 2 to eleven months (median four months).

(2) (2). During the postoperative phase, his condition was aggravated by remittent fever that lasted a month, which was eventually controlled with antibiotics.

(3) In conjunction with global remittance With a tripling rate over the past decade, and is now surpassing government aid. Diaspora organizations and international NGOs must urgently to figure out ways of working in a more effective way.

conclusion

Understanding the meaning of remittances in banking is vital in case you want to start international funds transfers. If you’re deciding between either a wire transfer or a bank transfer, take into consideration important elements such as timing and exchange rates as well as the cost. Making this decision can aid you in selecting the best payment method, so the loved ones receive funds quicker.

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