UAE top source of inward remittances in 2016-17:RBI

UAE top source of inward remittances in 2016-17:RBI

News:

1. The Reserve Bank of India’s survey of inward remittances for 2016-17 released recently.

Important facts:

2. Remittances represent household income from foreign economies arising mainly from the temporary or permanent movement of workers to source economies.

3. The survey highlighted the following facts:

• The United Arab Emirates (UAE) has emerged as the top source of inward remittances.
• UAE’s share in total remittances was 26.9%, followed by the United States (22.9%), Saudi Arabia (11.6%), Qatar (6.5%) and Kuwait (5.5%).
• 82% of the total remittances received by India originated from eight countries- UAE, the U.S., Saudi Arabia, Qatar, Kuwait, Oman, the United Kingdom and Malaysia.
• Among destinations, Kerala has the highest share with 19%, followed by Maharashtra (16.7%), Karnataka (15%), Tamil Nadu (8%) and Delhi (5.9%).
• Kerala, Maharashtra, Karnataka and Tamil Nadu together received 58.7% of total remittances.
• Remittances received by Indian residents were used for family maintenance

4. Consumption (59.2%),

5. Deposits in banks (20%)

6. Investments in landed property and shares (8.3%).

• Reponses were received from 42 major authorized dealers (ADs), accounting for 98.3% of total remittances in 2016-17.
• The rupee drawing arrangement (RDA) is the most popular channel of remittances which accounts for 75.2% of remittances, followed by SWIFT (19.5%), direct transfers (3.4%) and cheques and drafts (1.9%).
• The share of private banks in total remittances stood at 74.1%, while the public sector share was 17.3% and the remaining with foreign banks.
• Size-wise analysis shows that 70.3% of all reported transactions were of more than $500 and only 2.7% were of less than $200.