MONEY TRANSFER METHODS :
Beside lending and depositing money, banks also carty money from one corner of the globe to another. This act of banks is known as transfer of money. This activity is termed as remittance business. Banks gen¬erally issue Demand Drafts, Banker's Cheques, Money Orders or other such instruments for transferring the money. This is a type of Telegraphic Transfer or Tele Cash Orders.
It has been only a couple of years that banks have jumped into the money transfer businesses in India. The international money transfer market grew 9.3% from 2003 to 2004 i.e. from US$213 bn. to US$233 bn. in 2004. Economists say that the market of money transfer will further grow at a cumulative 10.1% av¬erage growth rate through 2008.
With the use of high technology and varieties of product it seems that "Free" money transfers will be¬come commonplace. We wid see more bundling of tai¬lored money services by banks and non-traditional en¬trants that will include "free" money transfers, Many banks will even use money transfer services as loss¬leaders in order to generate account openings and cross-sell opportunities. The price evolution of money transfer products for banks will be similar to that of consumer bill pay-the product is worth giving away as an account acquisition tool to win overall market share and establish banking relationships.
ATM money transfer card products have had ter¬rible bank adoption rates since being introduced in the last three to four years. Remittees who are highly educated and have been already been exposed to ATM technology in receiving countries tend to have an in¬terest in this product. Money transfer to India is one of the most important part played by the banks. This service provide peace of mind to either the NRIs or to the visitors to India. Many Indian banks have ATM'S (automatic teller machine). enable to draw foreign currency in India.
By the end of 2007, we will see a good percent of all foreign-born households doing some level of online banking. First-mover banks will start having a win¬dow of opportunity to include online transfer func¬tionality within the next couple of years, which cur¬rently frequents traditional money transmitters such as Western Union. There is a terrific opportunity for banks and non-banks to offer more robust global in¬ter-institutional funds transfer services online. More than half of Western Union's customers today are al¬ready banked, and most do not have an alternative product marketed by their bank that is painless, quick, and cost-effective. That will change as banks offer transfer services through their online channel.