Why are Documents Needed for Money Transfers to India

Whether you choose a bank or an online remittance agency, it is necessary to provide certain documents when sending money from one country to another. Financial institutions need to know who is making a transfer through them. They need to verify your income, address and other details before allowing you to use their services.

For instance, if you choose to initiate a money transfer to India through a remittance agency, your account will be verified with the necessary documents. Only when it is verified, you will be able to send money to your family or friends back in India. You will be required to upload your address proof and ID proof to remittance agencies or banks.

So why are these documents required?

Documents like government issued ID and passport are required by majority of reputed banks and agencies. They also require you to produce address proof that can include a copy of your bank statement, phone bill, utility bill, credit card statement and housing lease agreement.

You will also have to get your source of income verified by the service provider. This will require you to produce bank statements and paystubs. These documents are required mainly for three reasons:

• The main aim of documentation is to ensure safety of the money transfer procedure. It is useful for the safety of the sender as well as the receiver. 
• Banks or financial institutions require the documents from senders or even receivers to continue their services in an effective manner. Such institutions acquire information from identity verification services, credit reporting agencies and electronic database services in order to cross verify the ID of a sender who wants to use their services. 
• The identity of the sender has to be validated before allowing him/her to initiate a money transfer. If there is no confirmation on the same, it is impossible for the sender to start remitting money. These additional documents are also required in case the money transfer procedure gets stuck or delayed. With the help of these documents or IDs, the sender can proceed with the transaction. 
• It becomes easy to detect as well as prevent fraud if the right information is provided to the banks or remittance agencies. These institutions follow laws related to anti-money laundering and ‘know your customer’ requirements. Once the documents are collected it becomes easy to prevent scams. Banks can also trace if money laundering is taking place and put an end to it because many people try and remit black money (money on which tax has not been paid) to India. 
• Banks in India will also ask for all these documents if you want to open an NRI/NRE account.

If you don’t want to land yourself into trouble, it is recommended to mention correct details in the profile when signing up with an online remittance agency. From finding the best foreign exchange rates UK to learning about document requirements, find all details before you start to send money.