Kotak Mahindra Bank, along with Western Union payment services, today launched domestic money transfer service. As per the arrangement, Western Union will function as the bank's business correspondent.
"Our aim is to leverage the vast network of Western Union to facilitate domestic remittances, giving Indians greater access to move their hard-earned money reliably and speedily, and through regulated channels," saidUday Kotak, Executive Vice President and Managing Director, Kotak Mahindra Bank.The service will be available from today at 500 retail locations pan India, and more locations will be added by the year-end.
What is the service: This is a domestic money transfer service, with a direct to bank money transfer model. Simply put, the money will be transferred from a Western Union location outlet to a bank account at the other end of the transaction.
How does it work: For example, A, based in Mumbai, wants to send money to B in a small town in near Kolkata. The sender visits the Western Union location in Mumbai, submits the funds and provides valid ID proof such as driving licence or Aadhaar card number or voter ID. He also has to provide the beneficiary's bank account number, bank branch details and, if possible, the IFSC code. The transaction moves from Western Union to Kotak Bank, which then sends the funds to the beneficiary's account via National Electronic Funds Transfer.
What's the time frame: The money transfer would take approximately 3-4 hours. In certain cases, the funds could also reach the beneficiary's account the following day.
Other details: The minimum amount that can be transferred in a single transactionis Rs 100, and the maximum Rs 5,000. Also the maximum fund transferred per calendar months should not exceed Rs 25,000.
The cost: The cost varies according to the transaction amount and is slab based. For instance, for Rs 4,001 to Rs 5,000 the cost would be Rs 75 and for up to Rs 1,000, it is Rs 30.
For grievance redressal,you can get in touch with the Western Union call centre.
Firstpost Take:At the outset, this seems like a good service. It has been launched with financial inclusion in mind and would surely serve the unbanked as well as the banked customer. Western Union has more than 100,000 service locations in India alone.
If you take a look at current money transfer services out there, there are a few options. Right from postal money order, instance money order, to bank to bank NEFT transfer, and mobile to bank account money transfer services and the like. While all these various modes do have their own issues, they are much cheaper than the Western Union-Kotak Bank's offering. We think, this service would work for those who want to transfer funds but are wary to do their own net banking. For the economically weakercustomers,we think the cost of transaction is a bit expensive.
ShivKumar, a tea stall employee for Matunga, Mumbai, said, "Anything more than Rs 20, is expensive for migrants like me. There are other cheaper options out there." We spoke to a few more people, who wouldn't mind paying Rs30 to Rs75 as a fee and use this service. We think, this service is good, but would have been an excellent option, only if it was also less expensive.