Telegraphic Transfer

• A telegraphic transfer is an electronic funds transfer that makes transmitting money for international telegraphic transfers easier.
• The Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging network enables these transactions. Banks utilise the SWIFT transfer network to send and receive information securely across borders. This network is used to transmit sensitive information about money transfers.

What is telegraphic transfer

• Banks and financial institutions utilised Telex messages to move money directly from one bank to another before Telegraphic transfer was introduced. Before the invention of electronic payment networks, TT payments were quite popular. TT was operated using cable messages, and it is handled like any other electronic fund transfer.
• While the telegraph is no longer in use, the telegraphic transfer concept has expanded to include secure cable networks for fund transfers. Electronic fund transfer (EFT) is a method of money transmission used by banks and financial institutions.

Telegraphic transfer can be divided into two categories, as follows:-

a) A cross-border tele transfer in which one domestic and one foreign entity are involved. Both outward and inward remittances are possible. Outward remittance is the transfer of funds from your Indian account to a beneficiary's account located outside of India. The inward remittance, on the other hand, refers to receiving funds from an overseas sender and depositing them into your Indian bank account.

b) A domestic telegraphic transfer is one in which the sender and recipient are both from the same nation.

How Does telegraphic transfer Works

To put it another way, telegraphic transfer follows the following process flow:-

• The remitter directs his or her bank to wire funds to an overseas beneficiary. Fill out the remittance form to give the bank telegraphic transfer instructions. Some Indian banks also provide this tele transfer service through their net banking services.
• Money will subsequently be remitted by the remitting bank to the overseas country's corresponding bank in accordance with the instructions.
• If the beneficiary has a correspondent bank account, the funds will be instantly credited to that account. If the beneficiary has a bank account with a bank other than the correspondent bank in the nation, monies will be transferred to that account.
• The funds transfer process may need to go via one or more correspondent banks on occasion.

Telegraphic transfer fee and its working

• Telegraphic transfers, on average, take two to four working days to reach their destination, depending on the transfer's origin and destination countries. It also relies on the two countries' various regulatory requirements.
• Because tele transfers are the fastest means of monies transfer, they are highly costly. The remitting bank will levy remittance charges. In addition, related banks or intermediary banks participating in the transaction may levy fees in accordance with their fee schedule. At the time of giving credit, the beneficiary bank may impose costs on the remittance transaction. The remitter can opt to pay the remitting bank's and correspondent bank's fees. The sum will be deducted from the remitter's account in such instances. Charges might also be placed on the beneficiary by the remitter. After the total charges have been deducted, the payment will be credited to the beneficiary.

Advantages of Tele trasfer

Here are some of the most significant advantages of telegraphic transmission:-

• The money will reach the beneficiary within 2 to 4 business days, making it a quick option to transfer funds.

• Cash transactions are no longer necessary.

• This facility can be used in a variety of situations. It is especially advantageous for individuals who live abroad and need to send money to their family in their native country.

• Because it is a faster method of sending funds, the risk of being harmed by exchange rate swings is minimal.

• Transferring money internationally has never been easier. Telegraphic transfers are now available through most banks' internet banking services.

• FEMA has set a limit on how much money can be transmitted (Foreign Exchange Management Act).

• Mode of transfer that is secure and safe.

Role of Banks in Tele transfers

Remitting Bank

The ordering bank starts the tele transfer process based on the customer's instructions. To qualify for a telegraphic transfer, the ordering bank must verify that the customer has submitted all of the required information (remitter's information). Before completing the tele transfer request, the bank must check the information.

Intermediary Bank

To complete the telegraphic transfer process, the intermediary bank must keep a record of all transactions and confirm that all facts are appropriately stated in the request.

Beneficiary Bank

• The beneficiary bank must guarantee that the transaction contains all of the remitter's information as well as the specifics of the funds transferred. Certain regulations, such as anti-money laundering and Know Your Customer, must be followed by banks (KYC).
• You can always approach your bank with the transaction reference number if there is a delay or something goes wrong. The remitting bank provides the remitter with a transaction reference number as soon as the telegraphic transfer transaction is initiated. Financial institutions can use this reference number to follow the transaction's status.
• Cross-border remittances are governed by a variety of rules and regulations, as well as terms and conditions. Banks are also responsible for conducting due diligence on their own. Tele transfer enables you to make a successful money transfer to India swiftly and effortlessly due to the speedier process and convenience involved.

Frequently asked questions

What information must be provided to send a telegraphic transfer?

• Your name, address, and bank account number are required fields.

• The payment amount's currency

• Beneficiary's Full Name

• Name and address of the beneficiary bank (with branch name)

• Number of the beneficiary's bank account

• The beneficiary's bank's SWIFT code

• If any intermediate banks are involved, please provide their contact information.

• The reason for the payment

How long does it take for the money to reach the intended recipient?

Within 1-4 business days, the beneficiary will get the funds.

Is it necessary to state the reason for the wire transfer?

Yes.

What is the maximum size of a telegraphic transfer?

You have no limit on how much money you can send to India. That money, on the other hand, must have a lawful origin. In addition, the money will be liable to income tax in the nation of origin. Some countries impose a limit on the amount of money that can be transmitted abroad. This is to keep money from being laundered. In the United States, for example, a single person can receive up to $14,000 in foreign aid each year. Gift taxes will be applied to amounts over $14,000.