If you have travelled internationally, you have probably experienced difficulties with accessing your money. The different credit cards (VISA and MasterCard) are not always supported in every country. And as a Dutch person, my debit card is a Maestro card, which is more difficult to use outside of Europe.
When I first visited India, I quickly figured out that using my VISA card was the most useful, and in some ATMs I could use my Maestro card as well. Of course, you are dependent upon the exchange rates that either the foreign bank or your bank uses, plus an additional fee for using a foreign ATM.
In India, you can only open a bank account when you have a PAN (Permanent Account Number). When I arrived in India, I first had to find a place to live, then I could get my e-FRRO registration fixed. The e-FRRO registration is required for foreign staying in India for an extended period of time. It is basically an address proof for the government. After arranging my e-FRRO, the lockdown happened. The Indian government ground to a halt. I had to send my PAN registration documents, but courier services didn’t go there. There I was in India, unable to receive my salary, living from my reserves in The Netherlands. They say India is a cash economy, what they don’t tell you, is how difficult it is to break these 2000 rupee (~25 euro) notes into smaller denominations.
To make my life easier, I wanted to send money from Dutch account, to my Indian girlfriends bank account. I found Xoom, a service of Paypal that allows you to send money abroad using your Paypal account. My Paypal account is linked to my Dutch bank account. After entering all the details, I managed to send money quite quickly and with a small service fee. When my girlfriends bank was operational (which was from Monday to Friday between 9 and 5), I could send money from my bank account to hers in about 30 minutes. Great!
In the meantime, I have arranged my PAN card, opened a bank account with HDFC Bank, and received my salary. I wanted to send money back to my Dutch bank account, so I jumped back to Xoom.
Xoom
I created a new account for my address in India. I tried to create a transfer, but there is no option to select sending INR. I selected EUR, but for that to work you need to have an address in a country which supports Euros. I changed my address, selected Euros, but alas, you cannot send money from India to The Netherlands using Xoom. That’s unfortunate, time to look around.
(Transfer)Wise
A personal contact recommended looking at TransferWise. It turned out their name changed to Wise, and it turned out I had created an account a while back already. I went through the registration process. It requires the identity page and the last page of my passport. In India, the last page of your passport has your address on it. Do you need to request a new passport if you move to a different address? I don’t know, but this seems to be a clunky system. In The Netherlands the government registers where you live, so you don’t need to have it in your passport, but in India a system like that doesn’t exist.
I uploaded my passport and decided to add my e-FRRO as an address proof. After a day I got a response from Wise, they do not accept my e-FRRO as an address proof. The only allowed documents are an Indian passport, or an Indian drivers license, I do not own either.
After a couple of chats and emails explaining that I can share my e-FFRO, my salary slip, my Tax Income statement, the company I work for can attest, I can show my lease agreement, my utility bills. Wise did not budge. They state that according to the Indian government regulations, only an Indian drivers license or Indian passport are valid proofs of address.
It was time to look for the next solution.
HDFC Bank
In my opinion, HDFC Bank is one of the better banks in India. Their app is sufficient, and their online banking is okay. As with any Indian company, there is a lot of bureaucracy, forms to fill out, and many steps to take. Banks do not seem to be interested in delivering the best experience for their customers.
HDFC has an option to send money abroad called RemitNow. It is their Outward Foreign Remittance service. I added a beneficiary, and attempted to transfer my money. On the page to make the transfer they ask for a lot of details. There is a link to a document which should contain the foreign exchange rates, but that page resulted in a 404. Finally, at the bottom of the page, in light gray, there is this message:
Foreign nationals are requested to submit their outward remittance requests in physical mode at branch only. NetBanking facility is currently not enabled to handle such remittances.
It is 2021, I would like to be able to transfer my money from one account to another from the comfort of my couch. So the story continues.
Instarem
When I say this name out loud, I usually accompany it with: “Not Instagram”. Jokes aside, let’s hope this company provides a better service.
The registration went smoothly, they asked for my passport and PAN card, so I provided the details I had. A mail followed, asking for a salary slip, an Income Tax Return document and a bank statement. After providing these, another email came, asked for a Utility Bill, Rent Agreement, or an Indian drivers license as my proof of address. Apparently Instarem works under a different Indian government, as they do accept all the other documents I have available.
The process took a couple of days, but finally my account has been verified and activated.
Time to transfer my money!
When you create a transaction in Instarem, you need to transfer your money to them first. Unfortunately, you cannot pay using NetBanking or using a UPI.
What is a UPI?
It stands for Unified Payment Interface. When you have an India bank account, you can get a UPI registration with it. You can then use that UPI in for example Google Pay, or the Indian equivalent called PayTM. Your phone number is linked to your UPI as well. If you have multiple UPIs with different banks, you need to select you main UPI in the app. With this, you can transfer money to somebody based on their phone number, or based on their UPI. A UPI looks something like: your-identifier@okhdfcbank.
In most places you can pay using UPI. You will find a QR-code which you can scan with your Google Pay or PayTM app, then you enter the amount you want to transfer, wait a couple of seconds, and it’s done. On the receiving end they immediately get a notification of the received amount, giving confidence to both parties that the transfer was successful.
Another great feature is that you can request a payment. One place you see this is for example when you pay online at Amazon or Zomato. You enter your UPI, and a request to pay pops up on your phone.
For people from The Netherlands: It is basically the combination of iDeal with Tikkie where everybody can transfer money to a phone number or unique identifier.
To transfer money to Instarem, you need to add the account of Instarem as a beneficiary to your bank account. Then, as a security measure, you need to wait 30 minutes before you can transfer money. In the first 24 hours after adding a beneficiary, you can transfer up to 50,000 INR.
There are different methods of sending money between Indian bank accounts. There are IMPS, NEFT and RTGS. Instarem only accepts NEFT and RTGS at this moment. I made the mistake of making an IMPS transfer, but after timing out and waiting 2 days, my money got transferred back into my bank account.
With my second transaction attempt I sent money using NEFT, which was received by Instarem in about an hour. After that, Instarem took 27 hours to process the transaction and send it to my Dutch bank account, where it was received a couple of hours later.
Timeline:
- Day 1
- 12:00 Create Instarem transaction
- 12:10 transfer funds from HDFC Bank account
- 12:40 Instarem received funds, state changed to “Processing”
- Day 2
- 15:00 Instarem paid transaction
- 21:00 Received funds in Dutch account
The exchange rate seems to be the same over any amount, the only thing that changes is the service fee. An amount of ₹40,000 or more has a flat fee rate of ₹120 per ₹10,000. Below is a table:
| Send | Receive | Fee | Fee per ₹10,000 |
|---|---|---|---|
| ₹10,000 | €111.9 | ₹270 | ₹270 |
| ₹20,000 | €225.52 | ₹390 | ₹195 |
| ₹30,000 | €339.14 | ₹510 | ₹170 |
| ₹40,000 | €454.48 | ₹480 | ₹120 |
| ₹50,000 | €568.1 | ₹600 | ₹120 |
| ₹1,00,000 | €1136.2 | ₹1200 | ₹120 |
| ₹2,00,000 | €2272.4 | ₹2400 | ₹120 |
Crypto
There is another method which I might try in the future: cryptocurrencies. As a fan of decentralization this popped into my mind immediately. I have a Coinbase account, so I attempted to buy cryptocurrencies using my Dutch account, but obviously that doesn’t support paying from an Indian bank account or using an Indian credit card. I created a new account based on my Indian address and details, but quickly found out that purchasing crypto using fiat is not supported for India, as the only option is to convert cryptocurrencies between each other.
There is another company called WazirX which allegedly does support buying crypto using fiat. I downloaded the app and started the registration. At one point it asks you to hold your ID or passport and take a selfie. At that moment I started wondering about the rules and regulations around cryptocurrencies in India.
From the article:
According to Nischal Shetty, CEO, WazirX: “… buying Bitcoin is absolutely legal in India, there is no law prohibiting Indians from buying/selling cryptocurrencies in India.” It is true that it is not illegal to buy cryptocurrency in India. However, there is no legal guarantee of the safety of the invested amount like regular investment avenues.
Conclusion
Making a transfer from my Indian bank account to my Dutch bank turned out to be a more difficult task than the other way around. Wise is not suitable for foreigners in India, banks require you to physically go to the bank, and Instarem saves the day with their amazing service. Perhaps only crypto can be borderless funds transfer, but more on that in another blog post!