Are Banks All Set to Dominate Domestic Remittance Market in India?
MicroSave's India Focus Note 92 explores the models, challenges, and opportunities of bank-led remittances in India. It states that banks in India are rapidly becoming the cheapest and the quickest way to send money. Both remitters and recipients seem to prefer this channel to the other options available. Advancements like real-time connectivity through core banking solutions, depositing cash directly into third party accounts, and the expansion of branch and ATM networks have enabled remitters to increasingly use banking channels to transfer money. Banks have developed various models to provide remittance services. These include tatkal, interaccount, and interbank transfers. Remittances have enabled the financially excluded majority to experience and benefit from formal financial services. Regulations and technology have played a critical role in expansion of remittance services provided by banks. Enhancements that could accelerate this growth include:
- Integration of core banking;
- Allowing business correspondents to acquire transactions for multiple banks;
- Standardization of technology.