BANKING AFFAIRS

Detailed explanation-1: -Rupee Drawing Arrangement (RDA) is a channel to receive cross-border remittances from overseas jurisdictions. Under this arrangement, the Authorised Category I banks enter into tie-ups with the non-resident Exchange Houses in the FATF compliant countries to open and maintain their Vostro Account.

Detailed explanation-2: -The rupee drawing arrangement is a mechanism set up by the Reserve Bank of India (RBI) for the transfer of personal remittances from abroad. In most cases, the sender and the beneficiary are both individuals. Remittances through exchange houses for facilitating trade transactions are also allowed up to a certain limit.

Detailed explanation-3: -Key Takeaways. Foreign remittance is a transfer of money from a foreign worker to their family or other individuals in their home countries. Foreign remittances transferred back to a migrant’s home country are typically used for living expenses, such as food and clothing.

Detailed explanation-4: -Cross-border payments are financial transactions where the payer and the recipient are based in separate countries. They cover both wholesale and retail payments, including remittances.

Detailed explanation-5: -A foreign draft is thus a handy tool that facilitates the transfer of funds that originate in one country, as one currency. into another currency, in another country, either on demand or at a predetermined rate.