Urban-Rural remittances up 10-15% in October as weddings add to festive cheer

Buoyed by the festive and the upcoming wedding seasons, urban to rural remittances grew 10-15% in October over September, companies involved in the business said. India processes nearly ₹20,000 crore of monthly domestic remittances. Most remittance companies ET spoke with said that the pickup in these transfers has continued in the month of November

"We have seen remittances pick up and this has continued even in November as there were several holidays in October," said Seema Prem, CEO of last mile fintech service provider FIA Technology. "Typically, after Diwali we notice a lull in transactions but this time it has held steady and it has grown further in November."

The company processes remittances worth ₹40-60 crore a day.

Delhi, Mumbai, Indore, Rajasthan and Gujarat are among the major corridors from where a large chunk of the remittances originates, with the states of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh being the largest receivers of these inflows. The top five migrant-receiving states are Maharashtra, Delhi, Haryana, West Bengal and Gujarat.

"Remittances growth plus the fund transfers under PM Kisan Yojana added to the growth, we saw a growth of 18% in our total remittances business in October especially aided by remittances flowing into Uttar Pradesh and Bihar," said Anand Kumar Bajaj, managing director of PayNearby, another facilitator of last-mile payments in India. PayNearby processes more than ₹1,200 crore of remittances every month.

Under the PM Kisan Samman Nidhi annual cash transfer of ₹6,000 is disbursed to the farmers in three installments. The second instalment was disbursed between August-November.

Experts say that remittance flows are a good proxy of the state of the migrant economy. While the channels to send such transfers vary largely, payment companies use NPCI's Aadhaar-enabled payment services and direct money transfer channels such as IMPS or NEFT.

Amit Nigam the COO of Bankit said while remittances have grown it has been largely aided by UPI transfers.

"Earlier we used to see migrants seeking for assisted model of remittances but now they are going with self-service and using the UPI platform to transfer money," Nigam said.

Bankit processes ₹700 crore- 800 crore of remittances in a month.

"Remittances grew more than 8% sequentially in October. Going forward, we expect these numbers to grow keeping in mind the government's thrust on infrastructure and labour," said Rishi Gupta, MD, Fino Payments Bank.

"This growth could see further uptick when private capex starts rolling because you will notice a lot of rural folk moving to these urban construction sites for job opportunities."

Fino, one of the largest players in this segment, processes more than ₹4,000 crore domestic remittances every month.