In our increasingly globalized world, the need to send money overseas has become an integral part of many individuals' lives, whether they are expatriates, international students, business professionals, or individuals supporting their families abroad.
Where convenience and speed are paramount, many individuals are eager to explore new possibilities when it comes to sending money overseas.
While traditional methods like wire transfers and international bank drafts are still prevalent, the question we are exploring today is: Can we use credit cards to send money internationally?
In this article, we'll explore the concept of using a credit card for international money transfers, the associated risks, alternative payment options, and guide you towards making an informed decision.
Sending money using a credit card may not be as straightforward, but there are alternative ways:
Transfer money from a credit card to a bank account: One of the most common and straightforward methods is transferring money from a credit card to a bank account.
This option allows you to send funds directly to a recipient's bank account, providing a secure and reliable transfer. It's advisable to check with your credit card issuer or bank to understand the process and any associated fees involved.
Use specialist money transfer providers: Money transfer providers like Western Union and Xoom, a PayPal service offer a convenient way to send money overseas using a credit card. These services act as intermediaries, allowing you to fund the transfer with your credit card and then transferring the money to the recipient.
With a wide network of agents and online platforms, money transfer providers ensure quick and accessible transactions to support your loved ones anywhere in the world.
Transfer money from a credit card to a debit card: If you need to transfer funds to a recipient who has a debit card, it is possible to transfer money from your credit card to their debit card. This method provides flexibility, especially if the recipient prefers to have the funds readily available in their debit card account.
It's important to ensure that both the credit card and debit card issuers allow such transfers and to be aware of any associated fees or restrictions.
Explore peer-to-peer payment platforms: Peer-to-peer payment platforms have gained popularity in recent years, offering an alternative method to transfer money internationally using a credit card. Platforms such as PayPal or Payoneer allow you to link your credit card and send money globally.
These digital wallets often provide convenience, lower fees, and the ability to transfer funds to recipients using their email addresses or mobile numbers.
Consider online payment platforms: In addition to peer-to-peer payment platforms, online payment platforms such as TransferWise or Revolut offer innovative solutions for international money transfers.
These platforms allow you to link your credit card and transfer money abroad at competitive exchange rates and with lower fees compared to traditional banks. It's worth exploring these platforms to find a cost-effective solution that suits your specific needs.
Compare Money Transfer Services: Take the time to compare different money transfer services, considering factors such as exchange rates, fees, transfer speed, and customer reviews. Platforms like CompareRemit allow you to conveniently weigh your options, view real-time exchange rates, and choose the service that best fits your needs.
Quick and Straightforward Process: Using a credit card for international money transfers can be a convenient and efficient payment method. It allows for swift transactions, particularly when using online platforms or money transfer services, saving you time and effort.
Variety of Transfer Methods: One of the benefits of using a credit card is the flexibility it offers in terms of transfer methods. As discussed earlier, you can utilize money transfer services, credit card checks, or digital wallet platforms to send money abroad. These diverse options allow you to choose the method that best suits your needs and preferences.
Potential Positive Impact on Credit Score: Responsible use of a credit card for international money transfers can contribute to building a positive credit history. Timely repayments and managing your credit utilization demonstrate financial responsibility, which can enhance your credit score over time.
Potential Negative Impact on Credit Score: While responsible credit card usage can benefit your credit score, it's important to note that certain actions, such as exceeding your credit limit or carrying a high balance, can have adverse effects.
When sending money from a credit card, it's crucial to consider how it might impact your credit utilization and overall creditworthiness.
Interest Charges: Credit card cash advances typically accumulate interest from the moment you withdraw the money, and the interest rates for cash advances are often higher compared to regular credit card purchases. This means that using your credit card cash advance for international money transfers can result in additional interest charges, potentially making the transaction more expensive in the long run.
Risk of Accumulating Debt: Sending money from a credit card carries the risk of accumulating debt if not managed responsibly. It's essential to have a clear plan for repayment and ensure that you can comfortably meet your financial obligations. Failure to repay the borrowed amount promptly can lead to a cycle of debt and financial strain.
By understanding the advantages and disadvantages associated with sending money from a credit card, you can make a more informed decision based on your financial situation and priorities. It's crucial to weigh these factors carefully and assess whether the convenience and benefits outweigh the potential drawbacks.
Additionally, always review the terms and conditions of your credit card to fully understand the fees, interest rates, and any other relevant charges related to international money transfers.
While using a credit card for sending money overseas may seem convenient, it's essential to be aware of the risks involved. Consider the following factors before making your decision:
High Fees: Credit card issuers often charge substantial fees for cash advances, making this option more expensive compared to other alternatives. Be sure to understand the fees associated with your credit card and the specific money transfer provider or service you choose.
Interest Charges: Cash advances typically accumulate interest from the moment you withdraw the money, often at higher rates compared to regular credit card purchases. This interest can quickly add up, resulting in a higher overall cost.
Foreign Transaction Fees: Using your credit card for international money transfers may attract foreign transaction fees. These fees are typically a percentage of the transaction amount and can significantly impact the total cost. Consider whether the convenience of using a credit card outweighs these additional charges.
Credit Limit Restrictions: Cash advances can limit the amount of credit available for regular purchases, potentially impacting your ability to manage other expenses. Make sure to consider your credit limit and evaluate how a cash advance might affect your overall financial flexibility.
Currency Conversion Fees: When using a credit card for international money transfers, keep in mind that currency conversion fees may apply. These fees can vary among different credit card issuers and can add to the overall cost of the transaction. It's essential to understand the applicable fees and compare them with other methods of sending money overseas.
Interest Rates: Sending money from a credit card may involve cash advances, which often carry higher interest rates compared to regular credit card purchases. It's crucial to be aware of the interest rates associated with cash advances and consider the impact they can have on the overall cost of the transaction.
Prioritize paying off the borrowed amount as soon as possible to minimize interest charges.
Debt Implications: Sending money from a credit card has the potential to increase your debt if not managed responsibly. It's important to consider your financial situation and ensure that you can comfortably repay the amount borrowed.
Avoid relying solely on credit cards for international money transfers if it may lead to financial strain or excessive debt.
Credit Card Rewards and Benefits: Some credit cards offer rewards programs or benefits that can be advantageous when sending money internationally. These may include cash back, travel rewards, or lower fees for specific money transfer services.
Consider exploring the rewards and benefits offered by your credit card to determine if they can provide additional value when sending money overseas.
Fraud and Security: When using a credit card for international money transfers, it's important to prioritize security and protect yourself against fraud. Ensure that you are using reputable and secure online money transfer service providers or platforms. Regularly monitor your credit card statements and report any suspicious transactions to your credit card issuer immediately.
Consider Alternative Methods: While sending money using a credit card can be convenient, it's worth considering alternative methods as well. Depending on your specific needs, bank transfers, online payment platforms, or peer-to-peer or money transfer apps and services may offer competitive exchange rates, lower fees, or additional features that align with your requirements.
Q: What is a cash advance?
A: A cash advance is a feature offered by credit card issuers that allows cardholders to withdraw cash from an ATM or receive a cash equivalent directly from their credit card. It is essentially borrowing money against your credit limit. However, it's important to note that cash advances typically come with higher interest rates and additional fees than regular credit card purchases.
Q: What is a credit card loan?
A: A credit card loan, also known as a credit card cash loan or a credit card installment loan, is a type of loan that allows credit cardholders to borrow money directly from their credit card issuer.
Unlike a cash advance, which provides immediate cash, a credit card loan allows you to borrow a specific amount and repay it over time with fixed monthly payments and interest charges.
Q: How does a credit card loan differ from a cash advance?
A: While both cash advances and credit card loans involve borrowing money against your credit card, there are some key differences. A cash advance provides immediate cash or a cash equivalent, usually in the form of a lump sum withdrawal.
On the other hand, a credit card loan allows you to borrow a specific amount and repay it over time with fixed monthly payments. Credit card loans may have lower interest rates compared to cash advances, but they usually require a formal application process.
Q: How do cash advances and credit card loans affect my credit score?
A: Both cash advances and credit card loans can impact your credit score. Taking a cash advance increases your credit utilization ratio, which is the percentage of your available credit you are using. High credit utilization can negatively affect your credit score.
Credit card loans, when managed responsibly and paid on time, can have a positive impact on your credit score by demonstrating responsible credit use and repayment behavior.
Q: Can I use my credit card to send money internationally?
A: While most credit card companies do not offer a direct service for sending money abroad, there are alternative methods available. Some money transfer services allow you to use your credit card indirectly to fund the transfer to your intended recipient overseas.
Q: Are there any fees associated with sending money internationally using a credit card?
A: Yes, using a credit card for international money transfers may involve fees. These can include a cash advance fee, fees, foreign transaction fees, currency conversion fees, and any fees charged by the money transfer service or digital wallet platform you choose.
It's essential to review the terms and conditions of your credit card and the specific service you're using to understand the fees involved.
Q: How does sending money internationally using a credit card affect my credit score?
A: Sending money internationally using a credit card typically does not directly impact your credit score. However, if you use a cash advance feature, it may increase your credit utilization ratio, which can indirectly affect your credit score.
In conclusion, there are ways to send money internationally using a credit card. It is important to be mindful of the potential impact on your credit and manage your credit card responsibly.
Consider the risks, explore alternative methods, and carefully review the terms and conditions of your credit card to ensure a cost-effective and secure international money transfer. Remember to compare different money transfer services on CompareRemit.com, seek financial advice when necessary, and prioritize security to protect yourself against fraud. By considering these factors and making well-informed choices, you can send money overseas with confidence and convenience.
Growth in digital remittances can be a game-changer in international remittances, mainly in terms of reducing the cost of global money transfer, increasing accessibility, and being more customer-centric. In the case of Nepal, which is one of the highest recipients of remittances in the world, youth are leading the mobile and digital revolution in the country. 50% of the users of eSewa, Nepal's most prominent digital wallet, are between the age of 18 to 30 years. With eSewa, users can make various payments such as pay utility bills, pay internal bills, recharge phones, book airline, and bus tickets, scan and pay to merchants, make a bank transfer (from eSewa to a bank account), and so on. There are also cashback and reward points upon registration. Established in the year 2019, eSewa Money Transfer is affiliated with F1Soft Group. With 15 million users (almost half of the country's population), F1Soft has been the leading fintech company in Nepal since 2004. eSewa is licensed by Nepal Rastra Bank under foreign exchange regulation, so it is a safe and highly regulated mode of money transfer. It offers traditional brick-and-mortar and agent-based remittance services along with the non-traditional digital modes of remittance.Money Transfer Services from the U.S. to Nepal with eSewa eSewa is partnered with various leading money transfer companies such as MoneyGram, WorldRemit, Remitly, Skrill Money Transfer, TerraPay, WireBarley, enabling customers from the U.S. to send money to friends and family in Nepal directly into the recipient's bank account or eSewa wallet.The account deposit service is available in more than 65 banks in Nepal. With more than 4.2 million registered eSewa wallet users, the addition of remittance service to eSewa wallet will provide a boost in remittance inflow to Nepal.Remittances to Nepal constitute a major portion of the country's foreign exchange reserve, surpassing both the official development assistance and the total foreign direct investment. In 2019, Nepali migrant workers sent home $8.64 billion which constituted 25.4% of the country's GDP. Sending Large Amount of Money from the U.S. to NepalThe U.S. to Nepal money transfer corridor is a thriving one, with many money transfer operators competing for business. Here are the top 5 money transfer service providers from the U.S. to Nepal.XoomPayPal-owned Xoom, a leading digital money transfer provider is one of the fastest, secure and convenient ways to send money from the U.S. to Nepal. The Xoom mobile app or website allows users in the U.S. to send money in an instant to friends and family in Nepal using their U.S. bank account, debit card, or credit card. Xoom has partnered with major banks in Nepal - Everest Bank Ltd., Nabil Bank, Himalayan Bank, Nepal SBI Bank, and others offering instant bank deposits. The money can be transferred to a bank account or picked up from an agent location (from over 4000 cash pickup locations) in Nepal. The maximum transfer amount is $9,000 per transfer when using Xoom transfer. The transfer fee varies depending on the method. Bank transfers are usually free of cost. Fees for payments by card are percentage-based.Do keep in mind that a margin is added to the exchange rate when converting U.S. dollars (USD) into Nepalese rupees (NPR).Wise (formerly known as TransferWise)Wise (Ex-TransferWise) is a London-based financial technology company regulated by (Financial Conduct Authority) FCA in the UK. For online money transfers from the U.S. to Nepal, Wise is a secure, fast, and low-cost option. There are no hidden charges, no marked-up exchange rate. Wise gives you the interbank exchange rate for your transfers. You can pay by direct debit, bank transfer, debit card, or credit card. Bank debit or ACH is the cheapest followed by bank transfer. While payment via credit cards has more fees. Depending on the transfers, the money can be reached in one day or even within seconds. There are limits to how much you can send to Nepal. For larger transfers, Wise might ask you to provide your ID card. To initiate the transfer process, sign up online or in Wise's app for free.WorldRemitWith WorldRemit, Nepalese immigrants in the U.S. can send money online to recipients in Nepal. The money can be received via cash pickup, bank deposits, mobile money, and even airtime top-up.The cask can be pick-up from thousands of Samsara, NIC Asia, and Citizen Bank locations within minutes. The bank transfer may take 1 business day.You can send up to $5,000 per transfer with bank transfer and up to NPR 300,000 with the cash pick-up option. A maximum amount of NPR 1,000,000 can be sent in a day. The transfer fee will depend on the transfer amount. WorldRemit adds a margin to the exchange rate.Muncha Money TransferMuncha money transfer lets you send money to Nepal from all the 50 states in the U.S. It is a preferred choice for many NRN (Non-resident Nepalese) as an online payment gateway. Muncha Money Money Transfer and ThamelRemit are popular ways of sending money.An individual with a U.S. bank account can transfer money to the recipient's bank account in Nepal. It takes about 48 hours to complete the transfer. It is licensed by Nepal Rastra Bank, so your money is safe and protected. It offers ACH transfer and can send up to $10,000 per transaction from the U.S. to Nepal. The first transaction is free for all customers.ThamelRemitThamelRemit is an online money transfer platform for sending money from the U.S. to Nepal. It is trusted by more than 50,000 Nepalese in the U.S.The platform is supported by Siddhartha Bank Ltd., one of the fast-emerging banks in Nepal, and is powered by MachNet.The transfer is carried out via ACH where money is directly debited in USD from your bank account in the U.S. and transferred to the recipient's bank account in Nepal in NPR. There is no charge or bank processing fee within Kathmandu Valley.Outside Kathmandu Valley, there may be a bank processing fee that is deducted from the recipient's bank account as per the particular bank's rules and regulations. The exchange rates offered are highly competitive and fees are affordable. You can send up to $10,000 per transaction and get the money deposited into the destination account in 48 hours.TakeawayThanks to the increasing number of users of digital payment platforms like eSewa and others, the cashless transaction is becoming a reality in Nepal.The above list is not an exhaustive list of all the services available to send money from the U.S. to Nepal. It can be difficult to choose one from a plethora of options. Before you make the transfer, compare the money transfer service providers to get the best value for your money while sending money from the U.S. to Nepal.Nepalese living abroad prefer to send remittances directly through mobile banking, internet banking, or digital wallet. It offers ease of use, convenience, lower cost, and a competitive marketplace of the money transfer industry that gives better service and better exchange rates.
How do you pay your employees? As an employer, paying your employees is an important part of your business. Direct deposit to your employee's bank account or issuing paper checks are two of the most common ways of compensating them. Gone are the days when employees used to get paid in cash.But what happens when some employees have no bank accounts? This is where paycards come in. Paycards for employees are an alternative option when the employees do not own a bank account, and the employers do not want to pay in hard cash.It is estimated that about 5.4% of U.S. households (approximately 7.1 million) were "unbanked" in 2019, according to the U.S. Federal Deposit Insurance Corporation (FDCI). An unbanked household means no one in the household had a checking or savings account at a bank or a credit union.For small businesses with employees with no bank accounts, paycards can be a convenient option as a payment option.Direct deposit and paycards both offer the benefit of a paperless payroll distribution process and allow the employer to electronically transfer funds conveniently. While direct deposit is the norm for many businesses, paycards are gaining popularity each year.There are pros and cons of using paycards, and in this blog, we will discuss if paycards are right for your business and employees.What is a Paycard?Paycard is a lot like a prepaid debit card as it is made of plastic and can be pre-loaded. In the case of a paycard, the money loaded comes from the employer in the form of an employee's pay. The card carries the issuer name such as MasterCard, Visa, or Discover.Are Paycards Good, and Who is it For?A pay card can be used to pay an employee who does not have a bank account. Paycard holders or employees can cash out from paycards at a bank, ATM, or other point-of-service locations.Employees can also pay bills over the phone using their paycard number or authorize electronic bill payments to specified companies.Employees can use paycards at any merchant, grocery store, retail shop, or gas station that accepts debit cards.Do Paycards Have Fees?By law, employees must be able to access their wages in full without any fees. They can obtain the cash at a bank teller, ATMs associated with the card issuer, pay bills by telephone, or use the card for point-of-sale purchases.However, there may be fees for electronic fund transfers or for cash withdrawals at ATMs that are not in the issuer's network. There may be fees for card replacements, balance inquiries, inactivity fees, or other reasons. The Consumer Financial Protection Bureau issued a rule in April 2019 that paycard issuers must disclose all the fees to cardholders.Employees must be informed of the potential fees. The paycard issuer is required to give you disclosures on such fees before you sign up for a paycard or a payroll card.Also, paycards are regulated by state laws, so you might have to check for additional details depending on your state. Some states are making efforts to reduce fees that affect employees.As you can see, paycards fees mostly affect employees. In the case of direct deposits, employers are the ones who have to pay fees for setting up the payroll distribution system and a transaction fee for each time they transfer wages into an employee's account. The payroll software may also charge a fee for their service.Can Employers Save Money When Using Paycards?Since paycards are reloadable cards, employers can have the banks reload the paycards with their employees' wages for the pay period, avoiding the costs and hassle of issuing paper checks, mailing them, or re-issuing lost checks. The savings may not be a substantial amount but they can add up gradually.Can Employers Choose between Direct Deposit and Paycards?While there is no mandate that employers can only offer either direct deposit or paycards to their employees for their wages, it is safe to check with your state's law on payroll distribution.One-third of states allow employers to require employees to have bank accounts for direct deposit. In such a case, paycards may not be needed. Also, there is no law preventing employees with bank accounts to opt for paycards as their payment option.Though generally, employees tend to prefer direct deposit because of its efficiency and the least costly method of payment, as a business owner or an employer, it is better to give options instead of imposing only one method.Ask your employees about their preferred method of payment and what benefits (convenience, low fees, etc.) serve them the best.In fact, Federal law requires employers to offer alternative payment methods like paper checks or direct deposits.Should Employer Provide Pay Stub?Pay stub provides details of the employees' pay for each pay period. Employers are not required by federal law to give employees their pay stubs. However, many states have laws that require some form of written pay statement.Even if your state doesn't need you to provide pay stubs, you are still required by the Fair Labour Standards Act to keep track of your employees' working hours.For employees, a pay stub gives a record of their wages, deductions, contributions, and other information. It is also proof of income or employment, which is often needed when applying for a loan, credit card, or housing.For employers, a pay stub is useful for tax purposes, and it can be used to resolve any discrepancies with employee pay.Is it Possible for Paycards to be Overdrafted?Usually, paycards works like debit card, allowing cardholders to withdraw up to the limit of the loaded amount. However, there are paycard that allows overdraft for employees. But it can come with hefty overdraft fees if employees use funds over the limit in their account. Usually, you should be able to prevent misuse by subscribing to an overdraft protection service.Will Paycard Affect Credit Score?Paycards, like all prepaid cards, do not affect an employee's credit score.What is a Paycard Gets Lost or Stolen?A replacement card can be issued in such cases. The employee needs to notify the employer, and then the employer should immediately notify the card issuer. The employee is not liable for the incident as long as the issue is timely reported. Paycards come with similar protection as that of a prepaid card.The reporting time is determined by the card issuer. If you wait longer to report after learning of the loss and theft, the fraudulent charges may increase. You may have to pay a fee for the replacement card.Pros and Cons of PaycardsProsA win-win situation for unbanked employees and their employers.Green alternative to paper checks.Immediate payment to employees.No hassle of cashing a paycheck.No monthly or maintenance fees.Added security when assessing their funds (paycards require a PIN).Employees can report to the issuer if funds are used unauthorized.Paycards can be reloaded during each payday, saving money on issuing paper checks.Added efficiency for the employer as the employer would not have to physically present or mail paychecks to unbanked employees.ConsEmployees may incur fees for several reasons. Be aware of such potential fees.Employers have certain responsibilities to educate employees about the usage of paycards.Limited range of services and flexibility in managing your funds compared to bank accounts and other prepaid cards.The best paycards programs are easy to set up, have lower fees, quick access to funds, and provide a range of benefits such as cashback and discounts. We have made a list of popular paycards providers for businesses:Wisely Paycard by ADPOnline portal and mobile appCompatible with Apple Pay, Samsung Pay, and Google PayZero cost sign upNo hidden feesNo credit checkNo overdraft feeZero cost direct deposit of pay and other sources of income (including government benefits)Accepted wherever Visa is acceptedKeep track of spending and account balances 24/7 on the appGet cash back at major retailersSurcharge-free ATM withdrawalsFDIC insuredSecurity features include instant card lock, purchase protection, and travel alert notificationsRapid PaycardDirect Deposit onto rapid paycardLoad funds from approved checks with Ingo Money mobile appsNo fee for cashing paycheck24/7 account access with rapid! Access mobile appNo credit checkCan be used at ATMs, merchants worldwide, wherever Debit Mastercard or Visa debit cards are acceptedPay bills and make purchasesBook airline and hotel reservations onlineEarn interest on savings accountGet cash back rewardsFDIC insuredMoney protected with Zero Fraud LiabilityKittrell PaycardNo fees to use (there are fees for certain situations)Fee-free ATM network with MoneyPassWebsite and Kittreall AppGet real-time alerts and push notificationsCash back at point-of-sale terminals2-way texting to manage your card and accountCompatible with Apple Wallet, Google Pay, Samsung PayEasy portability (Get direct deposit of stimulus checks, tax refund, benefits)Freeze or unfreeze card on-demandSkylight PaycardZero sign up feeNo credit checkNo minimum balance Personalized your card with a family photo or unique imageManage money anywhere on Mobile AppDirect deposit your government benefits, tax refundsUse anywhere where Visa Debit & Debit Mastercard are acceptedFDIC insuredZero liability protectionPay bills onlineEarn interest on savings accountEarn cash back with Payback RewardsSend money to or receive money from friends and family with Netspend cardsSet text alerts about transactionsRefer a friend and boost your card balanceSkylight overdraft limit is $100 & 3 times/ monthConclusionOverall, paycards can be convenient and cost-effective for employees and employees when compared to paychecks or for those employees with no bank account. And the paycard fees are becoming more transparent and competitive.While paycards can be challenging at times, especially when you are employed in multiple jobs and have a separate paycard with each employer, your funds are scattered in multiple cards so it becomes difficult to manage your finances. Some may prefer to put all their money in one place, like a checking account.However, if you can't open a bank account, a paycard is a great option to get paid. Read the fine prints before signing up for a paycard and know the potential fees that come with it.
It is common for a Non-Resident to open an NRE Account or other similar accounts, with a bank in India and transfer their earnings from their foreign country into these accounts. NRI's are not required to pay taxes in India on earnings that they received outside of India however these guidelines are frequently abused. An influx of cases of money laundering and unexplained funds in NRE accounts has prompted the Enforcement Directorate of India (ED) to crack down on irregularities in NRE account activities.In one specific example, an individual transferred a large number of funds into a family members' NRE account. Upon investigation by the ED however, it was found that these funds were commission income which was generated abroad. He was then asked to furnish the overlaying contracts for these commission incomes and was penalized accordingly.As an NRI with an NRE account, it is very important that you are able to explain the source of your funds in your account should you be contacted by the ED. Failure to explain the source of your funds in your account is considered to be a violation and can result in tax penalties.In order to avoid being questioned by the ED in regards to NRE account activity, it is highly recommended that all NRI's protect themselves in the following ways:Distinguish between current account transactions from capital account transactions.Inform all applicable parties regarding any changes in residential status.Distinguish between Person Resident in India & Person Resident Outside India.Keep track of investments made in India from Rupee funds in India. For example, when their residential status is that of a Resident and the investments made from funds remitted from abroad and when their residential status is that of a non-resident.Understand the sale proceeds of movable and immovable assets in India.Comply with statutory guidelines for filing documents and reporting requirements for different transactions.Do not enter into capital account transactions that are prohibited or are not covered under general provisions of permission.Do not enter into current account transactions that are prohibited or restricted.Avoid participating in any " net - off " transaction with a resident individual.Never instruct or allow a resident to make an outward transaction on your behalf.The Foreign Exchange Management Act (FEMA) extends to all of India and makes offenses related to foreign exchange, civil offenses. Such offenses are not taken lightly by the Indian government, which is why it is imperative that these guidelines are abided by and taken seriously as any violations will likely result in penalties and legal action. Running into issues with your NRE account and have to deal with the ED can be extremely stressful and nerve-wracking, which is why it is important to follow the above guidelines in protecting yourself from such circumstances.
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