Transferring Money Abroad: Banks Drain Your Wallet

7 years, 10 months ago - July 10, 2013
Rs 900: This is the amount that a customer of a commercial bank paid for the transfer of money abroad, upon receipt of a letter to that effect. By signing the application for the transfer of money, it was well accepted that the transfer costs are deducted from his account, but he had not been informed of the amount of these costs.

The cost of a transfer of money from a local bank account to an account at a foreign bank can cost up to Rs 1200. Such is the assertion of a worker of one of the largest banks in Mauritius. To stop a second bank, a clerk explained that the charges levied by the foreign bank amounted to "a few dollars or a few dollars," or is it that the euro 'few' were equivalent to about Rs 500.

According to our survey, the banks charge to transfer money to a foreign bank, costs deemed excessive by the process known as Swift, which takes at least three 'working days'. These expenses amounted to Rs 325 to the State Bank of Mauritius (SBM), Rs 325 to Rs 400 and MCB Bank One, HSBC and Barclays. To perform this transfer, the bank uses the code for Internet Banking allocated to the customer and the transfer is done via the Internet, an operation would have been able to make it his home.

The irony is that even if he decided to transfer via the Internet, the bank would have received the same charges, is Rs 325 to Rs 400 in the bank, plus "a few dollars or a few euros" to the foreign bank. Must be added to 325 Rs charged by the SBM minimum U.S. $ 10 as 'Corresponding bank expenses'. At The MCB must add to the amount a percentage of the amount to be transferred, a minimum of 1%, depending on the country, as well as HSBC.

In addition, if a student or a parent abroad, has an account at a local bank and an ATM card, Maestro or Cirrus type, you can pay the money into his account in Mauritius. This will allow withdrawals are made over ATM with the Cirrus or Maestro logo. But be aware that local banks charge a fee for each withdrawal. These costs amount to Rs 50 to Rs 60 depending on the bank, if the withdrawal is less than Rs 7000 and Rs 75 for a withdrawal over Rs 7000. This possibility, cheaper than the Swift transfer, however, poses a problem, the amount of withdrawal is limited to Rs 10,000 per day, less than 200 euros to someone in France.

Besides banks, there are other providers like Western Union and Moneygram. However, the price to pay for this service is very high, up to 8% of the transaction amount. For example, to transfer Rs 15,000, the fee is Rs 540, or 3.6%. For comparison, the transfer process by Swift at the counter of the bank, costing Rs 753.50 and takes at least three 'working days'.

At Western Union, the fee is for an amount of Rs 15,000 to Rs 1,175, or 7.8%. The exchange rate used is determined by Western Union.

Money Transfer - Russian roulette

Entrust your money and play Russian roulette ... How much come out the other end depends on the different fees and exchange rates that are applied - and not necessarily explained to the client at the outset.

This is the opinion of the international consumer organizations. Each year worldwide, more than 400 billion dollars are sent by migrants to their countries of origin, including 325 billion in developing countries. This money is used to fund education, build housing and provide essential daily needs of millions of families. But many consumers who send money home to pay high fees, if not prohibitive, to carry out their international transfers.

Despite some progress in reducing these costs to some countries, consumers often continue to pay more than 10% or 20% commissions to make these items. In total, these amounts in the billions of dollars per year. The World Bank estimates that a reduction of five points shipping could result in annual savings of $ 15 billion for immigrants and their families.

The current industry standard allows transparency of prices, which blurs the rates of currency conversion, hides the real cost to the consumer and makes it virtually impossible to compare different providers.

As noted by the Special Adviser to President Obama for the protection of consumers of financial services, the consumer does indeed play a real game of chance when choosing a company to transfer funds. For whatever the company or bank selected, it applies its own rules and the consumer always loses, because the dice are loaded.

The consumer must first pay a fee to transfer funds, and is actually charged a second time, because the exchange rate applied ensures a "bonus" to a claimant who is not obliged communicate this information to the consumer. In some countries, the payment counters also charge recipients who wish to recover funds.

Who wants the death of the Competition Commission?

Three months after the departure of the last Executive Director, the Competition Commission (CCM) has not found the rare bird that can replace Sean Ennis. Meanwhile, the Commission is managed by an 'Officer-in-Charge', in the person of Ms. Kiran Meetarbhan. In the absence of an Executive Director, which pivots on the CCM, it can not initiate any new investigations or enter into those initiated by the former director. You should know that, according to the Competition Act, the Executive Director plays a key role in identifying anticompetitive practices in any market.

It may, on its own initiative or on the basis of a complaint, initiate an investigation. The fact that the CCM operates under the Office of the Prime Minister, it is for it to launch a call for applications to fill the position left vacant since March 28. However, there is no indication that such an exercise has started. In addition to Ms. Kiran Meetarbhan, who is also the Deputy Executive Director, TLC has a second 'Deputy Executive Director' in the person of Rajeev Hasnah.

Moreover, it should be noted that, almost four years after its commissioning, the CCM still lacks a 'Chairman' in itself. Initially approached for the job, former Justice Ariranga Pillay had withdrawn. This is the Vice-chairman, Rajiv Servansingh, who assumes the role of Acting Chairman, a temporary enduring.

In defense of the latter, it must be admitted that he assumed his responsibilities with the sobriety and seriousness that this position requires. It is clear that the CCM, which assured his role with poise regulatory authority since its inception seems to be neglected in the hands of people assuming the interim. Although the Commission is the responsibility of the Office of the Prime Minister, the appointment of the Executive Director shall be made by the President of the Republic on the recommendation of the PM, after consultation with the Leader of the Opposition.

 

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