Operating Models in the Remittance BusinessConventional Banking Model An International Remittance business may followthe conventional banking model or any of thenon-banking models.In this model, an end-to-end remittance transactioninvolves the following parties:•
Remitter’s Bank -
the bank where theremitter has an account that is debited for transferring money to the beneficiary•
Beneficiary’s Bank -
the bank wherethe beneficiary of the remittance has anaccount that is credited for the remittancemoney received•
(only in cases wherethe above-mentioned entities do not havea direct business tie-up) - an intermediarybank which has associated with variousbanks globally, through which remittancetransactions are routedFigure 4 illustrates the
setup,wherein the Beneficiary Bank has an accountwith the Correspondent Bank, while Figure 5shows the generic process involved in a remittancetransaction based on a Nostro account model.
Figure 2 Top Remittance-Receiving Countries (figures in US $ million)Figure 3 Remittances as a Percentage of GDPFigure 4 Nostro-based setup