Abu Dhabi: Remitting money back home has become costlier for expatriates living in the UAE from this week, exchange houses said on Monday.
Major money exchange houses have increased their charges for remittance from April 15.
Most of the leading money exchange houses raised the transaction fee by up to Dh2 for bank transfers from Saturday, April 15. However, some exchanges had raised the fee from first week of April.
Cost of sending money: What you need to know
UAE is fourth top remittance-sender: World Bank
Revealed: Top recipient of UAE remittances
25 shops in Dubai caught for running remittance racket
Remittance in a digital world
For bank transfers exceeding Dh1,000, customers have to pay Dh22, compared to Dh20 earlier. Similarly, for bank transfers up to Dh1000, the service charge has been increased to Dh16 from Dh15.
Service charge for currency exchange has also been increased by Dh1, from Dh2 to Dh3 per transaction.
Although most of the leading players, which raised the charges, are members of the Foreign Exchange and Remittance Group (FERG) — an official platform of the money exchange houses in the UAE, it was not a FERG decision, its chairman told Gulf News on Monday.
“We had shared a study, which had suggested making nominal increase in charges, among our members. It is up to the individual members to make a decision about it,” said Mohammad Al Ansari, who is also the managing director of Al Ansari Exchange.
He said the raise was minimal to meet the increasing operational costs only.
“We are aware that there will be further increase in operational costs due to new regulations. Some categories of exchanges may have to increase their capital and bank guarantee as per the Central Bank regulations,” he said.
Rajiv Raipancholia, CEO of Orient Exchange and treasurer of FERG, told Gulf News that his company implemented the raise from April 5 but it would not affect low-income workers. He said Dh2 increase per transaction for middle-and higher-income expatriates would be very nominal.
Higher fee or lower exchange rate?
According to industry executives blue collar workers remit money every month as they are the sole breadwinners of their families back home.
Although large exchange houses with branches across the country have already made the increase, some small exchange houses have not done it, industry sources told Gulf News.
“Even last time [In January 2014], when major exchange houses increased service charge from Dh15 to Dh20, some small exchanges did not do so. There are exchanges that still charge Dh15 and less," said an exchange house staff.
"However, there was an impression that they were compensating it by giving a higher exchange rate to the customers,” the exchange house employee added.
Money remittance industry is an open market in the UAE and individual businesses have the right to decide their charges without the need of any approval from the UAE Central Bank, he said.