RBI group to examine cost aspects in remittances
Mumbai, Apr 18 (UNI) With the view to ensuring that costs of banking services are rationale, the Reserve Bank of India (RBI) has set up a group to examine the cost aspects involved in remittances besides mulling setting up another group to formulate a scheme for ensuring reasonableness of bank charges and incorporating the same in the Fair Practices Code.
The group on remittances headed by Mr P K Jain, set up to make the remittances business more efficient, includes representatives from banks and will submit its report by end-May 2006. It will also examine the cost aspects involved in remittances including the cost structure for each element of the value chain and associated transfer costs.
The group was set up following concerns on the relatively high cost that can be faced, particularly by migrants wishing to send small amounts back home to their families. In these cases, the exchange rate charged on money transfers can be a significant additional cost that is often not obvious to those transferring money.
The group will also suggest measures to reduce the cost and make the remittance business more efficient. Remittances from non-resident Indians (NRIs) constitute a significant segment of the country's forex inflows.
The other working group comprising an Indian Banks' Association (IBA) nominee and representatives of customers will formulate a scheme for ensuring reasonableness of bank charges and incorporate the same in the Fair Practices Code - the compliance of which would be monitored by the Banking Codes and Standard Board of India (BCSBI).
The working group was constituted after a series of complaints from the public about unreasonable and non-transparent service charges levied by banks indicating that the existing institutional mechanism in this regard was not adequate. Banks will have to display and update, in their offices/branches as also on their websites, the details of various service charges in a format to be approved by the RBI.
UNI GC/JJ PP AW1847