U.S. to India cash transfer faster than Goa to Bihar
Have you ever wondered how difficult is it to send money within India? Two thirds of the country's population doesn't have a bank account and this situation is not expected to change dramatically in the near future.
The attempt by the government is now rightly moving towards using alternate non-banking channels to route financial services into the interiors of the country, said Sudip Bandyopadhyay, Group President Financial Services at BK Modi's Spice Group in an article in the Wall Street Journal. As a part of this process, it would be only appropriate, if the domestic remittance
market is opened to recognized money transfer agents who already are authorized to receive inward remittance from abroad.
A person sitting in US can transfer money faster to the India then a person sitting in the different state of India, a person sitting in India can receive remittance from anywhere else in the world, but not from other locations in India. So a person in London can remit money to a person sitting in a remote village in Bihar by using the services of Reserve Bank of India-approved, private money transfer players, while a person sitting in Mumbai cannot do the same. The only option open to him is to use the postal department's money order service and borrow in the meantime if necessary.
The problems in India's rural sector are well documented and the lack of remittance services is but one of the many inequities that plague this part of the country and keep its inhabitants outside of mainstream finance. About 72 percent of the country's 1.14 billion people live in rural areas, yet agriculture produces only about 21 percent of gross domestic product, according to the World Bank. That leaves the majority of the population living off a small chunk of the economic pie. While the government has claimed it can end poverty by 2040, at present, more than 250 million Indians live on less than $1 a day.
