India in talks to lighten load on remittances: RBI DG
As per the World Bank’s remittance prices worldwide database, the global average cost of a retail size of remittance was 6.2 per cent in the fourth quarter of 2022.
Representative image
KOLKATA: Reserve Bank Deputy Governor T Rabi Sankar said the high cost of remittances for countries despite the available technology was “unconscionable”, and India is in talks with more jurisdictions to make a material impact on cross-border payments.
Sankar, during a virtual address at the BCC&I Indo-Pacific Economic Conclave, said according to World Bank research, global cross-border remittance in 2022 was estimated to be $830 billion, and India was the top recipient. “As per the World Bank’s remittance prices worldwide database, the global average cost of a retail size of remittance (retail size - $200) was 6.2 per cent in the fourth quarter of 2022. For some countries, this cost can be as high as 8 per cent.
“Such a high cost in today’s context, when data connectivity is so cheap, is simply unconscionable. I believe that given the available technology, the present situation is not sustainable,” he said.
The top RBI official said India has been making efforts to tackle the challenge of the high cost of remittances, and the newly introduced central bank digital currency (CBDC) offers a potential solution in this context.