Business Daily from THE HINDU group of publications
Thursday, Aug 03, 2006
Business Daily from THE HINDU group of publications Thursday, Aug 03, 2006 |
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Private Banks Money & Banking - Forex Industry & Economy - NRIs
N.S. Vageesh
Chennai , Aug. 2 About $5 billion of the non-resident Indian (NRI) remittances of the $25 billion into India come in through ICICI Bank. Remittances through ICICI Bank were just about $1 billion in 2003. What sparked the steep growth? According to Mr Manish Mishra, Head of remittance products, ICICI Bank, the bank created new products after listening to customers who found the earlier methods of sending money to India cumbersome and expensive. Typically, NRIs would send money through wire transfers or cheques. Cheques took time to clear, sometimes running into weeks, while wire transfers were expensive often costing $30-40 per transaction.
Remittance service
The bank then designed the "Money2India" online remittance service that would enable NRIs to send money to their relatives in India without the necessity of coming to the branch. Based on instructions received after registration and validation, the money reaches the beneficiary's account in India, within 5 working days if it is an ICICI Bank account and a day later if it is a non-ICICI Bank account.
Deal sweetener
The sweetener in the deal - the transaction would be free for the customer. For those used to paying $30-40 for every transfer, that might seem rather generous. You might wonder why the bank is being so altruistic? Well, don't worry. ICICI bank does get its money by serving you - it makes its margins on the exchange rate and on increased volumes. (As a bank, the exchange rates that it gets in the inter-bank currency market are definitely cheaper than what you, the retail customer, are likely to get.)
Remittance volumes
That the strategy to do away with fees and transfer charges has worked is clear from the growth in remittance volumes. The remittances have come largely from NRIs working in the Gulf area and the North American market. The customer profile covers everyone from Indian taxi drivers in New York or Dubai to affluent software engineers and businessmen based in Canada or London. Using a combination of methods — alliances with foreign banks in different locations with dominant Indian expatriate population, (Lloyds TSB in London, Wells Fargo in US, Emirates Bank in the Gulf, Development Bank of Singapore in Singapore), tying up with exchange houses in the Gulf and opening of overseas branches — ICICI Bank has aimed at getting a strong retail footprint in these areas. Says Deepa, a software professional and customer who has used the ICICI Bank remittance service said, "It is possible to set up an automatic remittance for a year or more for a certain amount regularly. And there is no necessity for a minimum amount as some others insist. The free demand drafts (in India) with courier delivery help me send gifts or money on special occasions to relatives in India at the click of a button."
More Stories on : Private Banks | Forex | NRIs | ICICI Bank Ltd
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