Empirical Study of Foreign Exchange Remittance of Non-Resident Indians

Article History: Received: 10 November 2020; Revised: 12 January 2021; Accepted: 27 January 2021; Published online: 05 April 2021 Abstract Remittances sent by migrants are an important component of the development finance for the countries. India has secured position as the world's top beneficiary of remittances with USD 80 million in 2018. The study was done in the Maharashtra State which leads the number in remittance (17%). The study highlighted the foreign exchange remittance behaviour of NRIs. The present study tried to understand the remittance behaviour of NRIs and remittance behaviour with respect to demographic profile .The remittance behaviour is studied with the help of demographic and non-demographic factors such as gender, age, occupation, education, purpose of remittance, frequency of remittance, risk in remittance etc.


Introduction
Monetary remittances by migrants constitute a behavior of significant economic importance. Remittances sent by migrants are an important component of the finance for the countries. Remittances are an important source of external finance for the growth and development of any country. Evidence is there to establish the fact that remittances help in reducing poverty and children's education. The transfer of funds can be used for consumption, savings, investment purposes, housing expenses and healthcare. Contribution by remittances made by Indians living abroad and classified as NRIs are no different. Remittances by Indian migrants have been increasing over the years. India has registered a significant growth in remittances from USD 63 Million in 2016 to USD 80 Million in 2018. A major chunk of NRI population of India is Kerala, Maharashtra & Karnataka, who contribute more than 50% of the economic output of the state & thereby participate in the growth of India.
This study explores the frequency of remittance with regard to certain demographic variables like gender, age, education etc. which could be of interest to policymakers who can study it as a major development issue.

Literature Review
Zachariah & Rajan (2015) Remittance behaviour was studied through factors like age, education, duration of stay, wages, migrant status, working conditions, motive for remitting, size of household etc.
It is imperative to understand the remittance behavior also because the purpose of remittances affects the end uses of such funds.

Stark and Bloom (1985)
, this study considers migration enhances income levels, investment capacity and acquires insurance against risk. The major findings of this study was that remittance is used for household's development.
Vanwey (2004) this study found more tendency to remit for women than men. The purpose of remittance was family growth, investments, education and medical emergency.
Rajan (2011) observed from the study that the remittance sending is more likely male dominating. The purpose of remittance was investments and education.

De la Briere et al. (2002)
analysis reveals remittance behavior varies with gender and household composition. It is observed from the study that the remittance sent by male is more than the female.
Osili (2007) study has shown that remittances are significantly associated with household size, education, health conditions and operational risk.
There are very few studies available in the Indian context and hardly any in the context of Maharashtra which gets the most of the remittance inflows which makes it a good case for the researchers to undertake this study.

Topic of the Research
Empirical Study of Foreign Exchange Remittance of Non-Resident Indians

Objective of the Research
1. To study the foreign exchange remittances of Non-Resident Indians. 2. To study the variance in remittance behaviour with respect to demographic variables by considering factors like purpose, frequency and risk of remittance as various behavioral perspectives.

Scope of the Research
The scope of the study was limited to State of Maharashtra & NRI only

Hypothesis of the Research
H0: There is significant relationship between gender, age, occupation and education & frequency of remittance H1: There is no significant relationship between gender, age, occupation and education & frequency of remittance

Research Design of the Research
The research design of the present research was as follows:

a) Types of Data
A primary and secondary data was used for this research study. The primary data was a fresh data and secondary data was already exists in some or the other form and was collected already by someone else.

b) Sources of Data
The primary data was collected through structured questionnaire. The secondary data was collected from various Annual reports, Quarterly reports of the economy, Newspapers and Reference Books, Journals and Internet Media sources.

c) Sample Size
The sample size for present research study was 50.

d) Sampling Method
Purposive sampling method was used to identify the respondents.

e) Data Collection Method
Structured questionnaire was used for data collection .

f) Tools for Data Presentation
The tools such as tables & line charts were used for data analysis and presentation.

g) Statistical Tools for Hypothesis Testing
The statistical tools such as trend analysis, Pearson correlation and standard deviation method were used for data analysis & hypothesis testing.

Result & Discussion
This section provides the results of analysis & the discussion part.    With regard to frequency of remittance, it is observed that the majority of the respondents (46) prefer to remit monthly rather than weekly, quarterly, half yearly or yearly. When respondents were asked about the main risk factor which they consider while remitting among Operational Risk, Interest Rate Risk, Transaction Risk & Exchange Risk it was observed that operational risk is considered as the main risk factor while remitting money. Table shows that as the mean is high and the standard deviation is low in the case of operational risk, it is inferred that operational risk is considered as the main risk factor while remitting money. The objective of the study was to find out the purpose of remittance by NRIs. From the study it was observed that the majority of the respondents remit money so as to help families to meet the expenditure. Results show 52% of the respondents remit money for family expenditure.

Hypothesis framed for the Study
There is significant relationship between gender, age, occupation and education & frequency of remittance Result: The value of the test is 0.006. It is below the critical value of 0.05. There is a significant relationship between gender & frequency of remittance. There by H0 is rejected.   Result: The value of the test is 0.203. It is above the critical value of 0.05. There is no significant relationship between education & frequency of remittance. So H0 is accepted.

Conclusion
It was observed that gender wise variations have been observed in the context of remittance and the impact of education on remittances is mixed.
The researchers have tried to study the relationship between other demographic variables & remittance behavior by introducing variables like age & occupation and finally it can be concluded that gender & age have significant relationship with remittance. Education & occupation have no significant relationship and this aspect needs to be explored further.
From this study, it is evident that the majority of the respondents remit money so as to help families to meet the expenditure.
With regard to frequency of remittance, it is observed that majority of the respondents prefer to remit monthly & accessibility is the most important factor considered while choosing a remittance service provider followed by reliability & operational risk is considered as the main risk factor by NRIs while remitting money.
Most preferred mode of transfer is through banks and second most preferred mode of transfer is online fund transfer, it is imperative that the service providers should locate their branches where there is more NRI and the operation procedures for transfer should be transparent.
The customers should be taken care of properly and they should be educated about the operational risks involved in the transactions.