According to estimates, migrants remit Rs 40,000 crore annually. Illustration: Jayanto
In what may come as good news for almost 80 million migrants in India, private sector lender Yes Bank has launched services that will allow individuals to send money from any kirana (grocery) store to any bank account in the country. The move will do away with a compulsory visit to the bank branch. Another private bank, Axis Bank, is set to follow soon.
At present, only intra- bank fund transfers are possible, which means that a son who has an account in bank “A” can not send money to his father who has account with bank “B”.
“Yes Bank has created a simplified ‘cash to account’ money remittance service for sending money to any bank account in the country,” said Anand Bajaj, chief innovation officer, Yes Bank.
Given the potential of domestic remittance market, other banks are likely replicate the same model. According to estimates, migrants remit Rs. 40,000 crore annually. “We plan to launch this service very soon,” said an official spokesperson of Axis Bank.
Instead of visiting bank branches, individuals can go to touch-points of electronic payment-enabler companies, also acting as banking correspondents such as Oxygen, Suvidha, Itz Cash, Easy Bill and others in local shops.
Banks are also seeing a big business opportunity in all these. In the last 11 months, Yes Bank has seen around 3 million customers remitting around Rs. 500 crore to 16,480 branches of various banks involving 1 million transactions.
“At present, we have 12,000 such outlets in 146 cities from where a person can send money to any bank’s account,” said Bajaj. “We plan to increase the number of outlets to 50,000.”
Yes Bank expects remittances volume of around Rs. 1,500 crore and 3 million transactions by the end of the current fiscal year.