Like NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) systems for transferring funds from one account to another in India, international funds transfer can be caried out using wire transfer service that happens through SWIFT network. SWIFT (Society for Worldwide Interbank Financial Telecommunications) provides a safe and secure mode of remitting funds across different countries and is widely accepted globally. Here are the basics of the international fund transfer process using the electronic money transfer method:
- Currency Conversion – When one initiates an international funds transfer, the primary step through the remitting institution is to confirm the foreign currency to be transferred to the foreign bank account and subsequently fund the transaction in Indian currency. Similarly, for transferring funds from abroad to India, funding would be done in foreign currency and transactions credited to an Indian bank account in Indian currency. The prevailing exchange rate would translate the Indian currency into foreign currency. Such rate may differ from bank to bank and would be confirmed before the transaction funding.
- Intermediaries involved – Being an international funds transfer, at least four intermediary banks are involved, including sender’s bank, sender’s correspondent bank, receiver’s correspondent bank and receiver’s bank. The correspondent bank is the host international bank for the sender and receiver facilitating cross-country fund transfers. The sender’s bank remits the funds to their Correspondent Bank with details of the receiving bank. Such a bank then transfers the funds to the receiver’s correspondent bank with further details of the beneficiary. Once the receiver’s correspondent bank has received the funds, they credit the receiver’s bank account.
- Time involved – The time involved in international funds transfer has reduced considerably due to technological advancements. If the transaction has been undertaken during the business hours of the currency, which for USD would be during the New York business hours, will generally be credited the same day or next day to the receiver’s bank account.
- Charges – Owing to the involvement of different intermediaries in the process, different institutions charge transaction processing charges to recover the associated costs with the transaction. Such transaction charges are generally disclosed upfront, thereby enabling the sender to know all the transaction costs at the time of transaction initiation itself.
- Transaction Acknowledgement – When the sender’s bank has processed the transaction, they will send a SWIFT message into the system with all the necessary transaction details. Such SWIFT is in the form of MT103 which shares the transaction details and confirms that the funds have been remitted from the sender’s bank account. SWIFT copy will contain the details of the amount of funds remitted, currency, value date, beneficiary details, and who bears the charges for such transfer across the different intermediaries involved in the remittance process. Since the bank collects all such fund transfer charges upfront, the detail will show “OUR”, meaning that the bank will bear the charges of such remittance.
Several banks offer wire transfer services that will help you to remit money from India to different countries, including the USA, and get funds transferred from different parts of the world to India in a cost-effective manner. With secure firewall protection on the transaction portal, one can stay relaxed about having a safe international funds transfer to and from India.