Expats in UAE are worried about the increase in remittance fees that currency exchange houses have increased.
Citing rising cost of doing business, some of the leading currency exchange houses in UAE have increased the remittance fees by 7 to 10 percent. The costs have gone up from Dh15 to Dh16 for transactions below Dh1,000 and from Dh22 from Dh20 for transactions above Dh1,000.
Inside sources say that the hike in the charges, which will be effective from April 15, can be owed to the increasing cost of operations due to salary and rent hikes. According to Rajiv Pancholia, CEO of Orient Exchange of Dubai,the decision, however, was taken by the exchange houses at an individual level and was not a collective decision of the Foreign Exchange and Remittance Group (FERG).
According to the World Bank statistics, UAE as the fourth top remittance-sending country in the world. Going further, it is expected that UAE expats send an estimated $20 billion home, which imply an outflow of 4.8 percent of UAE's GDP. The move of increasing the remittance fees may hit the number of transactions that foreign expats in the country engage in while sending money home. This will also affect the finances of the labour classes working here who may now think twice before sending money home as often as they did previously. In fact, industry sources believe that cost of remittances is considered to be one of the major obstacles in the flow of cross-border flow of money. This could also give way to illegal means of transferring money through a bookie, which could further effect the economy of the country.