World Bank on 22 October 2015 announced that India is the World’s largest remittance recipient. It was revealed in the Migration and Development Brief that conveyed recent trends in remittance flows and migration across the world.
As per the report, remittances to India are projected to increase by 2.5 percent in 2015, well above the 0.6 percent increase in 2014.
Stronger remittance growth in India reflects improving economic prospects in the United States and continued fiscally-supported economic resilience in the GCC countries that contribute 35 percent of remittances each.
However, on the flip side, Japan-India is one of the three high remittance cost corridors that have well above 10 percent. The situation is due to low volumes, lack of competition in the remittance markets in some sending countries, and policy rigidities that limit competition in some market segments.
As a result, it is estimated that around 70 percent of total domestic remittances are transmitted through informal channels.
Still, it is hoped that Reserve Bank of India’s (RBI) recent initiative-granting in-principle approval to 11 entities to start payment banks-is expected to transform the remittance market especially in the underserved rural areas.
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