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.