Formalities Required Before Transferring Money Abroad

Sending money abroad seems to be an easy process but there are a lot of formalities for money transferring. There are various reasons for transferring money abroad. These include –

  • For educational purposes
  • For sustaining livelihood
  • For medical purpose
  • For investment purpose

For all these reasons, there are different rules and regulations that should be considered. Moreover, there are different formalities for money transferring for both Indian residents and non-Indian residents. When you transfer money via different modes such as banks, agents, or web applications, you need to abide by some guidelines. Let us have a look at the formalities for money transferring.

Formalities for Money Transferring Via Banks

When you plan transfer money via banks, you have to complete certain requirements. These are:

  • You should have a bank account before your transfer the money. This is important because your identity should be verified before proceeding with the remittance process
  • For identity purpose, RBI has made it mandatory to fulfill Know Your Customer (KYC) norms. The banks should link your bank account with valid identity documents. Before transferring the money, complete the formalities for money transferring, including KYC process
  • You can send the money through wire transfer or foreign currency demand draft (FCDD). These are the only two methods available in the bank. Out of these two, wire transfer is a faster and a more reliable process

You can transfer the amount in only certain currencies. These currencies are listed below:

  • US Dollars
  • Euro
  • British Sterling Pound
  • Canadian Dollars
  • Saudi Arabian Riyal
  • Arab Emirates Dirham
  • Danish kroner
  • Singapore Dollars
  • Hong Kong Dollar
  • Swiss Franc
  • Australian Dollars
  • Japanese Yen
  • Qatari Riyal
  • Norwegian Kroner
  • Swedish Kroner
  • New Zealand Dollars

Money Transfer Procedure

  • Visit the bank where you have your bank account. Make sure that your bank account is at least one year old. In case this condition is not satisfied, you need to submit documents like bank account statements and income tax documents
  • After this procedure, you need to fill Application cum Declaration Form. In this form, you need fill details about the sender and the recipient, purpose of transferring funds, and others. There are various formalities for money transferring listed in this form
  • After the bank approves your application, you can send the money via wire transfer or FCDD


How much Money can be Transferred?

Formalities for money transferring include the amount of money that can be transferred for various purposes. The limitations are:

  • For private visits, it is up to $10,000 per financial year
  • For business purpose, $25,000 per financial year
  • For medical purpose, $100,000 depending on the hospital estimates
  • For educational purpose, $100,000 per academic year after providing an estimate
  • For donations and gifts, $5,000 per year
  • For maintenance of relatives, $100,000 per year

Liberalized Remittances Scheme

LRS was introduced in 2004 to facilitate foreign transactions. With this scheme, formalities for money transferring were somehow relaxed. The residents of India, including minors, can send money up to $250,000. The only condition is that they should have a bank account in India with their PAN card linked with it. The following purposes are included under LRS:

  • Investment in shares, bonds, securities, etc
  • Purchasing properties
  • Opening foreign bank accounts
  • Gifts, donations, and miscellaneous purposes

Using Third-Party Services

For the persons who don’t have bank accounts, they can use third-party services such as Instarem, PayPal, Moneygram, etc for money transfer. The formalities for money transferring are also less in comparison to the banks. You just need to provide your identification proof and register online to open an account with them. You can transfer amounts up to $25,000 per month using third-party services.

Now, you are aware of the formalities for overseas transfer. By abiding or using any of the formalities for money transferring, you can send money for any of the listed purposes.

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