Inward Remittance- Remittances from overseas to domestic banks are referred to as inward remittances. Thirty inward remittances are the maximum allowed in a given year. Depending on the financial institution, inward remittances may also be subject to a fee. Outward Remittance- An outward remittance involves sending money in the form of foreign currency from a resident of one nation, like India, to a recipient who is in another nation (apart from Nepal and Bhutan) for any reason that has been permitted under the Foreign Exchange Management Act (FEMA). Read more about Inward and Outward Remittance here- https://www.salt.pe/blog/guide-on-inward-outward-remittance-under-rbi Watch this video- https://www.youtube.com/watch?v=RveNhtBo7_8 Salt is a fintech startup based out of Bangalore, helping businesses thrive in the international market with effortless international payments and the compliances. Read more about Salt here: https://www.salt.pe

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THE RIGHT (RBI) WAY
Remmittances
&

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What is FEMA?
Remittances in India are governed by the Foreign Exchange
Management Act (FEMA).
It specifies several reasons to receive international payments
or to send money abroad.
Some of them include donations, gifts, university fees,
investments or proceeds from a sale of an asset.
SMEs in India regularly receive international payments and
send money in the form of outward remittances.

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What is
Inward remittance?
Remittances from overseas to domestic banks are referred to
as inward remittances.
Thirty inward remittances are the maximum allowed in a given year.
Depending on the financial institution, inward remittances may also
be subject to a fee.

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What is
Outward remittance?
An outward remittance involves sending money in the form of
foreign currency from a resident of one nation, like India,
to a recipient who is in another nation (apart from Nepal and Bhutan)
for any reason that has been permitted under the
Foreign Exchange Management Act (FEMA).

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Here’s A Framework Of How These Remittances
Take Place…

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FEMA guidelines
for Outward Remittances
The Liberalised Remittance Scheme (LRS) under FEMA deals with
outbound remittances for Indian citizens.
Indian citizens can transfer money to foreign bank accounts under the
LRS without obtaining a specific permit. However, the money sent abroad
can only be used for the purposes specified under FEMA.
Outward remittances are only permitted up to an annual cap of USD 250,000,
and remitters must submit their PAN card details for the same.
Remitters are not permitted to send money to some organisations and nations
prohibited under RBI guidelines.

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FEMA guidelines
for Inward Remittances
The RBI regulations for inward remittance differ slightly from those for
outbound transfers. India is one of the nations that receive the greatest
amount of remittances.
The RBI provides the Rupee Drawing Arrangement (RDA) and the Money
Transfer Service Scheme (MTSS) as alternative ways to send money to
India from abroad.
Under MTSS, each inward remittance is restricted to $2500. The number
of remittances must be no greater than 30 on an annual basis.
Under the RDA, there is no limit on how much money can be sent overseas
for personal purposes.

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In Conclusion…
Whether you're an Indian citizen trying to transfer money abroad or an
NRI looking to send money home, you need to be aware of these
legislations.
For SMEs, sending and receiving money from abroad and accepting
international payments can be a cumbersome task, considering the
number of compliances while executing these transactions.

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But Worry Not!
Salt, as a neobanking solution, offers international banking services to SMEs.
With its multi-currency business account and remittance solutions,
you can enjoy an effortless banking experience in countries across the world.