India Dispatch: The amount of cash workers are sending from the UAE to India has surged by up to 20 per cent in the past three months because of the weak rupee.
Indians send more money home
MUMBAI // The amount of cash workers are sending from the UAE to India has surged by up to 20 per cent in the past three months because of the weak rupee, according to money remittance companies.
"The rupee has been depreciating," said Sudhesh Giriyan, the head of Xpress Money Business, which offers its services at 40,000 locations in India. "And that goes to show it is very lucrative to send money back home currently and a lot of people have been taking advantage of this."
Most of the company's customers in the Arabian Gulf region are blue-collar workers who transfer between about 15,000 (Dh993.67) to 20,000 rupees per month to their families in India, Mr Giriyan said.
"Besides the low-ticket customers, people who earn a lot of money are also sending more money back home a bit more regularly and in higher amounts," he added.
India is the biggest recipient of remittances in the world, receiving a record US$64 billion (Dh235.06bn) last year, compared with $54bn the previous year and more than double the amount of five years earlier, data from the World Bank show. More than a quarter of India's total remittances come from the GCC, according to the Reserve Bank of India.
Remittances are an important contributor to India's economy, particularly at a time when GDP growth is slowing.
"There is no denying the fact that there has been a considerable growth in remittances to India from the UAE," said Adeeb Ahamed, the chief executive of LuLu International Exchange.
"With the expatriates taking advantage of depreciating rupee value, we have noticed a recent spurt in the volume of remittances by about 20 per cent, especially after June."
The value of the rupee has fallen sharply against the US dollar, to which the UAE dirham is pegged, to hit all-time lows in recent months, which means workers in the Emirates can buy more rupees with each dirham they earn.
"We have witnessed an increase in the remittance volumes to India in the range of 12 to 15 per cent in the first six months as compared to last year, same period," a spokesman for the UAE Exchange said. "The increase in remittances is mainly due to the weaker Indian rupee against the US dollar."
Recent and upcoming festivals are also helping to drive business for remittance companies.
"Both the volume and number of remittances to India witnesses a sharp surge during various festivals such as Eid, Onam, Divali and Christmas," said Mr Ahamed.
The Reserve Bank of India in June increased the number of remittances that can be received by an individual beneficiary in India from a non-resident Indian to up to 30 a year compared with a previous limit of 12, which is also boosting the frequency of transactions.
"We have already seen the impact," said Mr Giriyan. "In all these markets that we currently operate in, including the GCC market, we have already seen customers getting aware of this new guideline and they are sending more remittances than they used to."