Everything you need to know about money transfers to India as an NRI

Inward remittances are India's second-largest external financing source after service exports. And according to the Economic Survey, inward money transfers are expected to grow by 4% to $129 billion in 2025. However, challenges such as high processing fees and unfavourable exchange rates can make international currency transfers stressful for NRIs.

Is there a solution?

Yes, you can avoid these problems by choosing the right banking services. With IDFC FIRST Bank NRI Banking Services, you can make seamless money transfers with a wide range of supported currencies and minimal transfer fees.

This article will explain everything you need to know about making NRI money transfers.

What are the different types of fund transfer accounts?
 

You have three primary types of accounts for making money transfers between India and abroad. These are NRE (Non-resident External), NRO (Non-resident Ordinary), and FCNR (Foreign Currency Non-resident) accounts. Each account serves different needs based on the source and purpose of the funds. Let’s understand in detail –

1.  NRE account
 

This account is ideal for repatriable funds. It allows you to send money abroad or receive foreign income without restrictions. Also, earnings in this account (including interest) are tax-free in India. With an IDFC FIRST Bank NRE Savings Account, you can earn tax-free returns on Rupee-denominated deposits. You enjoy high interest rates and 100% repatriation flexibility.

2. NRO Account
 

This account is specifically designed to manage income from India, such as rental earnings or investments. However, this type of account allows limited international funds transfer after applicable taxes. With IDFC FIRST Bank NRO Savings Account, you can send up to USD 1 million abroad per financial year. Also, by using the IDFC FIRST Bank Mobile App, you can access your accounts from anywhere in the world. This gives you complete control over your finances.

3. FCNR Account
 

An FCNR account helps NRIs save in foreign currency. It protects you from exchange rate risks usually faced during international currency transfers. For example, with an IDFC First Bank FCNR Account, you can park your USD earnings without converting them to INR. This ensures value retention when you send money abroad or back to India.

Also, with IDFC FIRST Bank, you get attractive interest rates and flexible tenures that range from 1 to 5 years.

What bank details are required to make money transfers?
 

You need certain details to complete an international currency transfer. These details vary based on the different types of money transfer services. Here’s a breakdown –

1. Domestic transfer (within India) 
    

   1. Bank name – The recipient’s bank name.
   2. Branch name – The branch where the recipient holds an account.
   3. Account number – The recipient's unique bank account number.
   4. IFSC – The Indian Financial System Code (IFSC) of the recipient's bank branch to facilitate accurate fund transfers.
       

2. International currency transfer (sending money abroad)
    

   1. Bank name – The name of the recipient's bank in the destination country.
   2. Branch name – The branch where the recipient’s account is maintained.
   3. SWIFT code – A globally recognised code identifying the recipient’s bank for international transactions.
   4. Recipient’s account number – The account number where the funds will be credited.

3. International currency transfer (receiving money in India)
    

   1. Bank name – The name of the sender’s bank located outside India.
   2. SWIFT code – A unique code identifying the sender’s bank for smooth international fund transfers.
   3. IFSC – The IFSC of the recipient's bank branch to convert foreign currency into INR.
   4. Account number – The NRE or NRO account number where the funds will be credited.

What are the latest FEMA guidelines on international currency transfers?
 

To legally receive or send money overseas, you must adhere to the inward and outward remittance rules set by the Foreign Exchange Management Act (FEMA).

1. Rules for inward remittance
 

FEMA regulates money coming into India from abroad. It specifies certain rules for handling these inward remittances. Some major ones are – 

a. Purpose code

Every money transfer needs a purpose code. This code explains why the money is being sent. For example, it could be for family support, a business payment, property sales, or even as a gift.

b. Authorised dealers

Only banks approved by the Reserve Bank of India (RBI) are authorised dealers to process these international money transfers.

c. Reporting

Large NRI money transfers to India must be reported to the authorities to maintain transparency. This rule prevents illegal activities like money laundering.

 d. Proof of remittance

To verify the transaction, proof of the money transfer is needed. This could be a bank statement, a SWIFT message, or a Foreign Inward Remittance Certificate (FIRC).

e. Identification proof

The person receiving the money in India must show a government-issued ID (like a passport, Aadhar Card, or voter ID) to prove their identity and citizenship.

2. Rules for outward remittance
 

The rules for sending money overseas from India (outward remittance) varies for NRIs and resident Indians.  

Transferring money overseas as an NRI

NRIs can make unlimited outward remittances from their NRE Savings or FCNR (B) accounts through Internet Banking services.

NRIs can also transfer up to USD 1 million per financial year from their NRO Savings Accounts to overseas accounts. Some of the guidelines for meeting the remittance requirements include filling up the proper application form with the bank, providing Forms 15CA, 15CB (if required), and A2, identity verification (through a passport or Aadhar card), and proof of the funds’ source (rental income, dividends, etc.).

Transferring money overseas as a Resident Indian

For close relatives residing in India who wish to send money to NRIs, FEMA, along with the Liberalised Remittance Scheme (LRS), sets rules for money transfers. Let’s check them out –

 a. Remittance limits

Resident individuals can send up to USD 250,000 per financial year abroad for eligible purposes, including travel, family support, purchase of property abroad, among others.

b. Beneficiary

The beneficiary of the money transfer (the person receiving the money) must be a resident outside India.

 c. Restricted countries

Some countries have restrictions or prohibitions on receiving outward remittances. Generally, these are due to political reasons, sanctions, or international regulations. Hence, before sending money overseas, you must check the RBI's list of restricted countries and ensure your transaction is allowed.

What are the costs associated with international money transfers?
 

When making international money transfers, you incur several types of costs, such as –

1. Transfer fees
 

The money transfer service provider charges this fee to process the transaction. They vary based on the –

1. Provider
2. Transfer type
3. Amount being sent

However, with IDFC FIRST Bank, you can send money abroad without charges.

2. Exchange rates

Some money transfer service providers may charge a markup on the exchange rate. Due to this markup, the recipient receives less money than the actual market rate.

3. Foreign transaction fees
 

These are fees that money transfer service providers charge when processing international payments. They are usually a percentage of the total transaction amount (mostly between 1% and 3%).

Make NRI money transfers through IDFC FIRST Bank

As an NRI, managing international money transfers can be complex due to high fees and complex documentation. However, you can simplify the process by choosing the right NRI banking partner.

With IDFC FIRST Bank NRI Banking Services, you get benefits like:

• Convenient internet banking from the app
• Attractive interest rates on your NRE/NRO/FCNR Accounts
• Dedicated relationship manager to guide you at every step
• Zero processing fees on international money transfers, ensuring cost-effectiveness

IDFC FIRST Bank supports multiple global currencies, and you can easily manage transfers and control your funds from anywhere with our advanced mobile banking app. Choose IDFC FIRST Bank and start enjoying convenient NRI banking services.