Sending cash home gets dearer

Dubai: Exchange houses in the UAE will increase their service charge on remittances to Dh15 from November 1.

Senior officials of various exchange houses called the hike essential to meet rising rents and staff salaries.

At present the service charge at various exchange houses varies depending on the country and the region the remittances are being made. But beginning next month they will all bring the service charge on remittances to Dh15.

For example, currently the UAE Exchange charges Dh13 and up and Al Rostamani Exchange charges Dh10 as does Alukkas Exchange.

Expatriates said that they are already incurring losses due to the fall of the US dollar and the strengthening of the Indian rupee.

"The timing to increase service charges is inappropriate," said Venugopal, a Sharjah-based Indian.

Long overdue

Mohammad Hanif, a Dubai-based resident, said that the hike is a blow to expatriates who face the falling value of the dollar and all round price increases in the country.

Money exchanges described the hike as 'marginal'. Krishna Murthy, CEO, financial service division, Al Rostamani Group said: "If you look at banks they are charging something around Dh45 to Dh75 in service charges. The exchange houses have not imposed a change in their service charges on remittances for a long time now. But it has become essential now, the reason being the cost of operations which has gone up. Inflation too is high."

Murthy said exchanges are fine tuning their service charges to conform to market forces.

He said: "The customers were notified about the hike a month ago. In my opinion the hike will not pinch the customers, but what will hit them is the currency inflation as earning potential has come down."

Sudheer Shetty, General Manager of UAE Exchange said that they have been contemplating a revision in the service and draft charges for some time.

He said: "There has been no revision since the last 23 years. But now a hike is imperative because of the cost of operations which have gone up drastically, especially the rent and salary component, not to exclude the processing charges that we have to pay as fees to certain banks in the region and the world.

"The service charge on electronic transfers has been raised from Dh13 onwards to Dh15 onwards depending on the region and the country," said Shetty.

Kutty Krishnan, general manager at Alukkas exchange, they have hiked their service charges on remittances to India from Dh10 to Dh15. "There has been a nominal hike in remittances to other Asian countries like Sri Lanka and Nepal," said Krishnan.

Have your say
How often do you wire money? How would you rate the service offered by finance houses in the UAE? Is the rise in remittance fee to high or tolerable? Tell us at letter2editor@gulfnews.com

Expats should start searching jobs back home rather than complaining especially with the boom in the economy.
Mohammed
Dubai,UAE
Posted: October 29, 2007, 13:56

The hike in the service charges for sending money may force workers to send money by other illegal means. All exchange houses - please re-think! Dh15 is a lot of money back home.
Maurice
Ras Al Khaimah,UAE
Posted: October 29, 2007, 13:35

The increase should affect those who are sending larger amounts. Please spare low income groups who send smaller amounts to support their family back home.
Roy
Dubai,UAE
Posted: October 29, 2007, 11:31

The hike in exchange service charges seems to be essential and reasonable, considering the increase on all levels of living costs. But I think the UAE should re-evaluate the rates and reconsider the dollar peg, without further delay.
Ashraf
Dubai,UAE
Posted: October 29, 2007, 11:26

I think the hike is fine. However, it's time for the UAE to re-evaluate the dirham. Behind all wars, there's always been a hidden financial war which is the main reason for the real war and will drag a prosperous state into nonsense.
Ted
Beijing,China
Posted: October 29, 2007, 11:23

This will only encourage people to use alternative methods of sending money other than the normal channels.
Hari
Abu Dhabi,UAE
Posted: October 29, 2007, 11:18

The impact will be minimum since people don't have much money to send home nowadays.
Ravi
Abu Dhabi,UAE
Posted: October 29, 2007, 10:43

This is another blow for us expats. It is not enough that house rents are rocketing but they need to increase the remittance charges as well! We all know that we, expats, are living and working here in the UAE to support our families back home and the downfall of exchange rates has made a very significant negative effect on our finances. We just hope this would be the last blow for us expats.
Rachell
Dubai,UAE
Posted: October 29, 2007, 09:58

This hike on service rates is not affordable for middle-income earners like me.
Manohar
Sharjah,UAE
Posted: October 29, 2007, 09:51

I think this is high time that the UAE should start thinking seriously about revaluating the dirham instead of pegging it against the dollar. The current scenario of the dollar value crash puts enormous financial stress on UAE residents who are already face skyrocketing rents and increase of prices.
Rex
Abu Dhabi,UAE
Posted: October 29, 2007, 09:39

I am a regular customer of UAE Exchange and they have always charged me Dh15 for my remittances to India.
Faz
Dubai,UAE
Posted: October 29, 2007, 08:36

Don't send money home every month. Remit money once in three months.
Seby
Dubai,UAE
Posted: October 29, 2007, 08:08

The hike in the service charges for remittances to India does not make a big difference, but I imagine that it will have a huge impact on low-income earners who want to send money home.
Semar
Abu Dhabi,UAE
Posted: October 29, 2007, 07:58

It is not a problem because I am being charged more than Dh15 when remitting money to my home country. I think the increase is reasonable.
Joane
Dubai,UAE
Posted: October 29, 2007, 07:26