Telegraphic Transfer

Updated: 15-07-2022 10:57:51 AM

What is Telegraphic Transfer?

Telegraphic transfer, also known as Wire transfer is an electronic method of transferring funds. In this method, money is transferred from one bank to another via cable services or telegraphs. Earlier, overseas payments via telegraphic transfer was a popular method. Though, telegraph is not used for transfers today, name still remains the same for the transfer of funds electronically or for any wire transfer transactions. Telegraphic transfers are safe and convenient way to transfer funds to people staying overseas. Telegraphic transfer or wire transfer is the most common means of transferring funds overseas.

Wire transfer can be classified into two types which are as follows :

a) Cross border wire transfer which involves one domestic and one foreign entity. It can be both outward and inward remittance. Outward remittance means remitting money from your account in India to beneficiaries account overseas. Whereas, inward remittance means getting money remitted to your account in India from overseas remitter.

b) Domestic wire transfer is transaction that involves remitter and beneficiary located in the same country.

How does Telegraphic Transfer Work?

To put it in a simpler way, telegraphic transfer works in a below process flow:

• The remitter instructs his/herbank to wire the funds to beneficiary residing overseas. Wire transfer instruction can be given to the bank by filling up the remittance form. Some of the Indian banks also offer this wire transfer facility online over the net banking services.
• As per the instruction, money will then be sent by remitting bank to its corresponding bank in the overseas country.
• If beneficiary holds an account in correspondent bank, then the money will be directly credited to beneficiary account. If beneficiary holds an account with some other bank in the country other than correspondent bank, then funds will be transferred to beneficiary’s bank account.

Sometimes, the funds transfer process may have to pass through one or more correspondent banks.

What is the Information Required for Telegraphic Transfer?

Here are the important points to be provided for telegraphic transfer :

• Name of the remitter
• Bank account details of remitter
• Payment currency
• Amount to be remitted
• Name of the beneficiary
• Account number of beneficiary or IBAN (International Bank Account Number) for payments to UAE and Europe
• Name and address of beneficiary bank
• Beneficiary bank’s SWIFT(Society for Worldwide Interbank Financial Telecommunication) code and BIC Code (Bank Identifier Code)
• Details of intermediary bank
• Reason or purpose of transfer

What is the Time Limit and Cost involved in Telegraphic Transfer?

Generally, telegraphic transfers take around two to four working days to reach its destination depending on the origin and destination country of the transfer. It also depends on various regulatory requirements of both the countries.

Telegraphic transfers are quite expensive as they are the fast mode of funds transfer. Remittance charges will be levied by the remitting bank. Also, corresponding banks or intermediary banks involved in the particular transaction may levy the charges to the transaction as per their fee schedule. Remittance transaction may also be subjected to charges from beneficiary bank at the time of giving credit. Remitter can choose to bear the charges of remitting bank and its correspondent bank. In such cases, amount will be debited from remitters account. Remitter can also choose to put the charges on beneficiary. Then the amount will be credited to beneficiary after the deduction of total charges.

What are the Benefits of Telegraphic Transfer?

Here are some important benefits of telegraphic transfer :

• Quick way to transfer funds as the money will reach beneficiary within 2 to 4 working
• Eliminates the cash transactions.
• This facility can be used across several Specifically, it’s beneficial for those who are residing abroad and needs to send money to their family in home country.
• As it is the faster way of transferring money, chances of getting affected by exchange rate fluctuations are low.
• Convenient way of transferring funds overseas. Most of the banks now offer wire transfer facility over internet banking.
• Amount can be transferred up to any limit as prescribed by FEMA (Foreign Exchange Management Act).
• Secure and safe mode of transfer.

How to Remit Funds to India?

Specifically for NRIs, remittance can be actioned in many currencies. Funds in major currencies like USD, EUR, GBP and many other can be transferred to your own account or to any other person’s account in India with mentioning the clear purpose of transfer.

While submitting the instruction to ordering bank overseas, you need to ensure beneficiary details along with beneficiary bank details and SWIFT code are correctly mentioned. SWIFT code and intermediary bank details can be easily obtained from concerned bank’s official website.

What is the Role of Banks in Wire Transfer?

• Remitting Bank

Ordering bank initiates the process of wire transfer as per the customer instructions. Ordering bank needs to check whether the customer has provided all the information (remitter’s information) correctly to qualify for a wire transfer. Bank must verify the information before processing the wire transfer request.

• Intermediary Bank

Intermediary bank involved in the wire transfer process must keep the record of all the transaction and also ensure the details are correctly mentioned in the request.

• Beneficiary Bank

Beneficiary bank must ensure the transaction carries the entire information of remitter and the details of funds remitted. Banks need to be complied with certain norms, such as anti-money laundering and Know Your Customer (KYC).

When there is any delay or something goes wrong, you can always approach your bank with the transaction reference number. Transaction reference number is provided by the remitting bank to remitter, as soon as the wire transfer transaction is initiated. Status of the transaction can be tracked by financial institutions using this reference number.

Cross border remittances are subjected to various regulations and also terms and conditions. Banks also ensure the due diligence from their end. With the faster process and convenience involved, telegraphic transfer helps you to get the successful money transfer to India, easily and quickly.