Follow. Remittance is derived from the word ‘remit’ which means ‘to send back’. Remittance refers to money that is sent or transferred to another party, usually overseas. Remittances can be sent via a wire transfer, electronic payment system, mail, draft, or cheque.

Who is an Authorised dealer under FEMA?

An Authorised Dealer (AD) is any person specifically authorized by the Reserve Bank under Section 10(1) of FEMA, 1999, to deal in foreign exchange or foreign securities (the list of ADs is available on ) and normally includes banks.

Why is foreign remittance important?

Remittance and the Indian Economy. Increased inward remittance is a boon for the economy at both macro and micro levels. At the macro level, remittances contribute to maintaining stable foreign reserves. Remittances help Indian Rupee hold its value against the US dollar and forms a significant part of the GDP.

Who can be appointed as an Authorised dealer?

Generally, all nationalized banks, leading non-nationalized banks, and foreign banks are appointed as ‘Authorised Dealers Category I’ to deal in foreign exchange. They can deal in all other transactions in foreign exchange like bill of exchange, cheques, letters of credit, deposits, etc.

What are advantages of remittance?

Remittances help to increase the standard of living of the families that receive them. This positively affects them by increasing their day to day available spending money. It can also help increase consumption of these families as a kind of financial injection as a result, increasing national income and affecting GDP.

Which all transactions are permitted to be carried out by Authorised dealer?

Category I Authorised Dealers are select banks who can carry out all permissible current and capital account transactions as per directions issued from time to time. There are 106 authorised dealers of Category -I as per the RBI regulations.

What is ad category?

Authorised Dealer Category -I Banks (AD Category–I Banks) is one of the three types of Authorised Money Changers (AMCs) approved by the RBI under Section 10 of the Foreign Exchange Management (FEMA) Act, 1999. An AMC is a Full Fledged Money Changer (FFMC) permitted to deal in foreign exchange for specified purposes.