India Post is set to give the likes of Western Union Money Transfers, Money Gram and other remittance service providers a run for their money with its wide network in the country.
The department has launched a facility whereby someone abroad can send money to relatives in India, while those in the country too can send money to relatives and friends in more than 100 countries.
“We have a tie-up with an external agency called Euro Jiro for MO Videsh. They have a tie-up with lot of international banks,” says Faiz-ur-Rehman, chief postmaster general for Maharashtra and Goa circle.
Under the India Post remittance option, the charges for sending money can either be levied to the sender or the receiver of funds. It permits a maximum of 12 remittances of $5,000 each into the country as per the Reserve Bank of India guidelines.
Interestingly, India Post also serves as an agent to Western Union Money Transfer to remit funds in India.
Asked how India Post will deal with the conflict of interest, Rehman said, “We are allowing various entities to use our distribution network for insurance, gold coins, remittance, etc. Similarly, Western Union will continue to distribute. We will offer a differentiation through price and services on the same platform.”
According Rehman, India Post offers a cost advantage to customers in India who are price sensitive. India Post charges $12-25 plus service tax depending on the amount, which can range from $100 to $5,000, if the person sending the money is paying the fee. In case the person receiving the funds has to pay, then the charges are $6 to $20 plus Rs 150 as service charge.
Massive computerisation has also helped India Post offer instant money order (iMO), wherein the money order form is sent electronically to the nearest post office where money is to be delivered.
“This has helped us reduce the time taken by the foot-long money order form to travel places. Earlier, it varied from four to 15 days, depending on the place. Now, it is one to four days. Some tell us within half-an-hour the money had reached,” says Rehman. The cost of operations too has come down because of iMO.
But the charges here are significantly higher than the traditional money order. India Post charges 5% of the total amount sent subject to a minimum Rs20 for a traditional money order, while the iMO costs Rs150-330 depending on the amount, which can range from Rs1,000 to Rs50,000. So, if for Rs1,000 you had been paying Rs50 as charges, under the iMO you will pay Rs150.