Baisakhi tips on money transfers

With the Baisakhi festival season round the corner, international money transfer companies are gearing up to garner a major share of the market.

It is expected that of the over $1 billion remitted to Punjab annually through the organised sector, a major share is transferred in this season.

Paul Merchants Ltd, which has an agency agreement with Western Union Financial Services, kicked off a road show to spread awareness regarding money transfer services in the urban and rural areas of Punjab. The road show will focus on educating the citizens regarding the legal remittance and the new guidelines by the RBI.

Talking to Business Standard, S Paul, Chairman cum Managing Director, Paul Merchants Limited, said, "There is a need for creating awareness among the masses in Punjab to use the legal means to transfer money. Many a times, customers fall prey to unscrupulous agents, which dupe them of their money. Unorganised sector constitutes more than 50 per cent of the market share in the money transfer business. We feel that roadshows are the best way to connect people with us. We would also be advertising aggressively on the regional channels also.

He says that Doaba region in Punjab constitutes most of the remittance and as for the Baisakhi festival, a major amount is transferred during this period.

"We are taking lot of initiatives to capture the market share like door to door campaign and issuing loyalty cards. Besides our rates are also very competitive, we charge only $10 up to $1000 from US and $ 25 for $ 1000 to $ 2500. Most of the remittance is below Rs 50000 and comes from US, Canada, UK and now a days lot of money is being transferred from middle east countries also," he said.

He says that according to the World Bank Report, total remittances to India stood at $ 21.7 billion, almost half of it belongs to individual remittances and the share of Western Union constitutes over one billion dollars.

The total remittance is close to 3 per cent of the GDP of the country. Punjab state accounts for 30 per cent of Western Union's share. Out of this 30 per cent transfer to Punjab, our share is about 45 per cent. The post offices constitute the other major share of transfer as they have a wider network.

We have grown at the rate of 80 per cent in the last quarter of fiscal 2005-06 as compared to the same period last year. As the remittances to India are growing steadily, so is the unorganised sector, however, the recent RBI guidelines would help in curbing this. In the organised sector, the remittances next year are slated to cross $ 2 billion from the Western Union Money Transfer alone."

He further said, "Our aim will be to grow at a faster rate. For this, we would be expanding our branch network from 63 to about 90 across the country next year and from the current 33 to about 45 in Punjab. As for the franchisee locations, we would be expanding our network from current 4800 to 8000 across the country and 1400 to 2500 in Punjab."