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How Do You Receive a Foreign Remittance in a Savings Account

How Do You Receive a Foreign Remittance in a Savings Account
rohit
Rohit17 February 2024

When receiving payments in foreign currencies from clients, the first question is whether you, as a freelancer, can accept foreign remittances directly into your Indian bank accounts. 

The answer is yes, but freelancers must consider various other details and factors regarding receiving foreign remittances into their bank accounts. 

The Basics of Foreign Remittances

The Reserve Bank of India allows Indian citizens to receive foreign remittances into their savings bank account without any restrictions (apart from remittance under the Foreign Contribution Regulation Act, 1976). However, the receiving method may vary. 

1. Wire/Bank Transfers (SWIFT/IBAN)

The sender initiates an international wire transfer through their bank (correspondent bank). The process involves providing necessary details such as the recipient's name, account number, SWIFT code, and sometimes an IBAN. 

SWIFT code is a unique identification code assigned to banks and financial institutions worldwide to identify a specific bank when making international wire transfers between banks. 

IBAN is a standard international numbering system developed to identify bank accounts uniquely. 

2. Money Transfer Services

Money transfer services, like Western Union, allow individuals to deposit cash or use their debit/credit card to send money to someone in another country. 

You can visit their transfer outlet, give them cash, and they send the money to their foreign office. The recipient in the other country visits the local office to collect funds after providing the necessary information. 

3. Online Payment Platforms

Online payment platforms like Skydo, PayPal, and others allow users to send and receive payments digitally through a virtual currency account. The users can deposit the funds into their bank accounts by converting the currency per the foreign exchange rate and paying the applicable conversion fee. 

Can You Use Your Savings Account? 

Yes, the Reserve Bank of India allows Indian citizens to use their bank accounts to receive foreign remittances. 

Under the scheme for foreign remittance, there are no restrictions on the number of remittances and the remittance amount. However, trade-related transactions have an upper cap of Rs 15 lakh. 

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