Remittance Needs in India
This scoping study examines the current situation of domestic migration and remittances in India and looks at how remittances can contribute to financial inclusion in India.
Examples from case studies and on-site visits illustrate how formal and informal money transfer options respond to the needs of migrant workers. The study highlights problems in existing money transfer mechanisms available to migrant workers. It bases observations on a literature review, interviews with representatives of stakeholder institutions and field studies conducted in the states of Maharashtra and Uttar Pradesh. The study identifies many challenges to the effective operation of domestic remittance services in the country. They include:
- Lack of access to banks;
- Know your customer norms that exclude poor migrants from opening bank accounts;
- Institutional challenges faced by the banking system and India Post to service migrant workers adequately;
- Social exclusion faced by migrants at their destination points and their lack of acceptance in the banking environment.
The paper states that innovations and improvements within the sector, such as technology developments and business correspondent schemes, could provide opportunities to make remittance services more effective.