Xpress Money to seek RBI nod to enter account credit segment

To corner a larger share of the remittance market in the country, money transfer firm Xpress Money plans to move the Reserve Bank for a rupee drawing arrangement licence, a top company official has said.

"We are planning to enter into an account credit side (rupee drawing arrangement), but it all depends on the approval from the Reserve Bank. We are in early stages of this exploration," Xpress Money vice-president and business head Sudhesh Giriyan told PTI.

The move comes amid reports that the country will continue to top the remittances market this year as well. Last week, the World Bank had pegged the inflow this year at $71 billion, which is a record. Last year, total remittances stood at USD 69.13 billion.

Currently, Xpress Money offers remittance services through the money transfer saving scheme (MTSS), which is a quick and easy way of transferring personal remittances from abroad to beneficiaries back home.

Mr Giriyan said three-fourths of the $70 billion remittances that the country receives annually are received through account credit route.

"It is a huge pie that will be made available to us and we are definitely excited about that," Mr Giriyan said.

The company is also in talks with various banks to partner for remittance using the rupee drawing arrangement.

"We are in talks with a few partner banks for this" Mr Giriyan said but refused to name any of the banks Xpress Money is talking to in this regard.

RBI allows only personal remittances such as remittances towards family maintenance and remittances favouring foreign tourists visiting as permissible.

In 2012, the diaspora pumped as much as $69.13 billion in remittances. Out of this, the cash segment or MTSS were $15 billion, while the balance came from account credit segment.

"Last year, $15 billion remittances came in through the cash segment, and out of this 10 per cent were routed through our channel and we are looking at doubling this by next year," Mr Giriyan said.

Xpress Money offers three channels to remit money in the country-- cash-to-cash, cash-to-ATM and cash-to-card.

The company has over 45,000 agent locations across the country, and nearly 1,00,000 ATMs serve as payout locations for its cash-to-card product.

"We will look at increasing our physical presence here next year by introducing more payment channels," he said, adding the company will increase its agent locations by another 5,000 in 2014.

Xpress Money has tied up with Punjab National Bank and State Bank of India for cash-to-card service, and is offering this service in Punjab and Kerala.