Friday, January 16, 2009

Money transfer from Saudi Arabia



Excactly a year back, I had written a post about money remittances from Saudi Arabia (Click here to read that post). A lot of water has flown down the river since then, new exchange houses have come up, new rules have been framed and it is about time that I updated some additional information for the benefit of the readers.


There are many exchanges and banks from where you can send your hard-earned money home. There are no restrictions on remittances from Saudi Arabia in the sense that 100% of your earnings can be repatriated back home.


However, not all the banks are popular. The exchange rates, particularly in some of the banks, are extremely unfavorable. To top it all, there is no such thing called a customer service or an ombudsman in these banks. Some of the staff in such banks have nothing but utter contempt for the expatriates, as though they are here as bonded slaves, going by the way they treat them. Naturally, these banks are the ones having the least expat crowd. An absolute textbook case of how not to run a business!



On the contrary, some of the exchange houses work 12 hours a day, Saturday through Friday, except for prayer times and on Friday mornings. There are several counters and the staff are manned by expatriates too, who are courteous and understand the problems of fellow-expats. The exchange houses have, what is known as 'Correspondent Bank' arrangement. What it means is that when you send money through these exchanges and you have a bank account back home in one of these correspondent banks, money transfer is immediate.




Usually there are two ways of sending money home. The first one is the traditional Demand Draft whereby you pay the money plus the commission of the exchange house and get a Draft. Make sure that the draft is signed by atleast two authorized officers of the bank for amounts greater than SR10000 (this is usually the norm unless confirmed by the bank that it is not required). I have personally seen people walking off with drafts, without having even one signature. People simply assume that they are signed when they are issued, so do make sure to double check before you leave the counter, because without a signature these drafts will not be honored back home.



The other method, and more convenient one, is money transfer direct into your account. The commission for MT is a bit higher, but is very safe and almost instantaneous. My personal favorite is the MT.



A word of caution is not out of place. Some of the expats have a habit of accumulating their savings over a couple of months or more and send them as a lumpsum amount. When the amount becomes big (typically amounts above SR20000), questions are raised. You will have to take the printout of your bank statement with the rubber stamp of the bank and also the mini statement from the ATM machine of your bank. As per the new rules of Saudi Arabian Monetary Agency (SAMA), these will be verified by all banks and exchanges as a measure of safety against money laundering, so it is better to go prepared with these documents to save your time. Also, SAMA has now made it mandatory for all banks and exchanges to have the iqamas and the passport copies verified for everyone, particularly when any of these documents are renewed.


The exchange houses are not complaint-free, though. The most common problem with these exchanges happens in case of Demand Drafts. As long as things go smooth, there is no problem. The moment a Draft is struck up somewhere, then there is a long-drawn process before you can get your money back. This is why it is so important to keep the counterfoil of the form which you have filled in, till you are sure that the money has indeed reached your account back home.



You must take care to fill in all the details correctly in the form. Afterall, it is your own money and you do not want to throw it away. You must know the email address / phone number of your bank back home. This is to ensure that in case of a delay or non-delivery of your money, you can immediately mail them and sort things out.


Finally, as most expats do, it is advisable to keep multiple accounts in the various exchanges. All it needs is a photocopy of your iqama and that of your passport with your company's stamp to open an account. This is just to ensure that you get the best exchange rate available. Remember, the exchange rate you see in the newspapers is not what is offered by the banks / exchange houses.


You will find different rates in different exchange houses, all in the same road, so you have to be alert, keep your eyes and ears open and strike the best bargain. After all, the happiest day in the life of an expatriate is the day his hard-earned money goes into his bank account :)

38 comments:

cold said...

Hi,

How's western union service in saudi? As I heard they transfer money for charge of 25 riyals and exchange rate also good. may be 20 to 30 paisa less from market rate...

Expatguru said...

Cold,

Western Union's service is good. The only problem is that their exchange rate is not attractive. Also, once you remit the amount, you have to call home and tell them a secret code which will have to be written correctly and sumitted by the receiver (for smaller amounts). This costs extra money.

Western Union does not have branches in smaller towns and rural areas, which is another drawback. I would still vouch for Money Transfer straight into your account.

AliBaba said...

Can I make an MT to somebody else's account back home?

Expatguru said...

AliBaba,

Sure, you can make an MT to anyone and anywhere in the world, as long as you add that person's bank account as a beneficiary.

cold said...

Guruji ,

I enquired exchange rate in western union its Rs 12.7 ....current market rate as per money converter sites is Rs 13.I felt its pretty good deal.problem is I cant send more than Rs 50,000 (samba western union branch).
What exchange rate other banks offer???

Expatguru said...

Cold,

As a policy, I do not comment either for or against a particular institution, to maintain the independence and credibility of this blog. The best way is to compare the rates by word of mouth or personally, like how I myself do.

Amit said...

Dear Friend,

I have a doubt that is not related to this topic and please excuse

i have a valid KSA Driving Licence (under my old sponsor) and now i would like to change my Iqama Number in the licence and name of old sponsor to my new sponsor (I had gone exit and back on new visa)

Pl. let me know the formalities and total expenses (before it was SR. 75/=) now ???

Thanks & Rgds
Amit

Expatguru said...

I will shortly write a separate post on this, so keep watching this blog.

Micper said...

Dear ExpatGuru,
Thanks for this valuable post.
Few updates for the readers (with your permission. Please make corrections, if any):

1. In most of the exchanges, the validity of the a/c is same as the validity of the Iqama. So, to save time, it is advised to renew your account every time you renew your Iqama.
2. There is a facility of online money transfer to your home country a/c through several banks like; BSF, AlRj, RydB, Samba. But you need to have a/c in those banks and have to register yourself to activate this service. The exchange rate is also good.
3. It is very unsafe to send money through illegal way (method of Hundi). In most of the cases, the beneficiary will receive fake currency notes.

Expatguru said...

Micper,

Thanks for your inputs. I thought of publishing them without editing anything. Just a few clarifications.

You need not have an account in a bank to send money. You definitely need to have a "remittance registration". For instance, I have sent through SAMBA several times, but I do not have an account there. Of course, my iqama details and the details of my beneficiaries are all registered. Another point is that if you try to send money after expiry of your iqama, the bank / exchange themselves will not allow it as your iqama's expiry date would show on their system.

Micper said...

Dear ExpatGuru,
Refernece above comments, some clarifications from my side.
In my point no.1, I mean "remittance registration" only. Sorry I did'nt mention it properly. Further, I too used to send money through the same remitance service of ANB and AlRjhi.
But as far as my point no.2 is concern, as per my knowledge, "Bank Account" is required for online transfer (from our local bank a/c) from your ofis or home without going to the remitance center.

Expatguru said...

Micper,

You are absolutely right. For 'online transfers' through the internet, you definitely need a bank account. Thanks for the clarification.

Anonymous said...

Dear EG & Micper,

Both gave the valuable inputs.. Thanks.

Micper,

I understood from the bank employee that MT is best through agencies like TM, SC, etc..

Yes you can do it 'online' by activating benificiary, BUT the charges he told me was around SR90(I don't remember) per transaction. I checked this as safe measure, before I went vacation last time. [(ie.) on vacation time, if the rates go further down I shall act immediately and transfer all by sitting at your home country].

Please clarify..

MSK

Micper said...

Dear MSK,
Thanks for addressing me.
As far as I remember, Riyad bank is charging very less for online transfers & exchange rate is somewhat similar to Al Rjhi. Please check that.
Thanks.

Micper said...

Dear EG & Readers,
To check the current currency exchange rate of Al Rajhi Bank, please visit this link Al Rajhi Exchange Rate
Change the Currency Exchange rate to "Foreign Currency", Fill the Amount value (eg. 100 (SR)), Spread Type to "Purchase" and choose the two currencies.
Another source is "Arabnews.com" website under the menu Business - > Exchange Rate. Don't forget to check the date at the top of the page, some times it is not updated for few days.
Hope the above links are helpful. Awaiting your comments.

Expatguru said...

Micper,

My experience with Al Rajhi Bank is that due to some strange reason, the exchange rate on Saturdays and Sundays remains unchanged most of the time. Don't know why, or whether it was just coincidence in my case. Also, the rate published in the newspaper is not actually what you get at the moment of transaction. However, for those doing online money transfer through Al Rajhi, they honor the exchange rate whatever was prevailing at the moment the transaction is made.

Anonymous said...

Dear Expat Guru

I have been working in a comany since 9 years & now want to join another company in March 2009. Is still NOC is required as my present company will not give me NOC. Pls inform at asimsonu123@yahoo.com

Regards
ARQ

Expatguru said...

ARQ,

If you are an Indian citizen and you go on exit, then you do not need an NOC to return. For other nationalities, you have to check with the Saudi Embassy in your country. Read my post on NOC written elsewhere in this blog.

Anonymous said...

Dear Guru,

1. 'Sat/Sun No change in conv reate' - I am not sure about this, but I also have realised this many times, particularly when checking money conversion rate online. My OWN understanding is that 'Because the Markets are closed in USA & other countries on Sat & Sunday, the exchange rates remain same until markets resume on Monday'.

2.Conv rate is not the same as published - Yes you are right. The money conversion rate is not the same as published on papers / online. So my rough rule is 'Online value - 0.15 INR/SR'. It always closer to this in SC and little less for TM.

Hope you / Micper agree.

MSK.

Anonymous said...

Hi
Thanks for this really beneficial info specially for the new comers. My question is: I am new to KSA and dont have an Iqama yet. Can I send money from Western union by showing my passport?
Thanks!

Expatguru said...

Anonymous,

The agency from where you send money through Western Union (for example SAMBA) may require the photocopy of your passport stamped by your employer. Once they enter the details in the system, you are free to send money through Western Union. This is a precaution adopted by banks to prevent money laundering.

Aziz ur Rahman said...

Dear Expatguru,
I am here in Riyadh on Business Visit Visa. How can i send money to Pakistan? Can i use normal remittance service e.g. Rajhi bank?

Does western Union allow to send money using passport? Please advice.

Expatguru said...

Aziz ur Rahman,

You have to get your passport copy stamped by your sponsor. Submit this to any of the exchange centers eg., Al Rajhi or SAMBA, and open a money transfer account. Only then will you be able to send money to your country.

Anonymous said...

Dear Expat Guru,

I found ur blog to be very beneficial in knowing some matters, we, as expatriates should definitely be informed.Thank you for that and keep up ur good work.

I wud like to ask u that when v travel to India, how much riyals we can keep as currency with us. Are there any restrictions on this? It would be of great help if you would answer me promptly. Thank you.

Expatguru said...

Anonymous,

Indian Customs rules require that any amount more than US$ 10000 must be declared on arrival (no restriction, only declaration that you are carrying this with you). Similarly, Saudi Customs requires that you should declare any amount more than SR60000 if you are carrying it in person. The safest way is to send the amount by money transfer to your account for which there is no limit.

Anonymous said...

Hi Guru,
I must appreciate the extensive work presented on your blog.
Please accept my appologies as the questing is off-topic.
I've been offered job in KSA (Manager Position) and my company insists that i should come initially on business visit visa and while I am in KSA they will work out my Work Permit. The question is... Is it Acceptable or Permissible to start working in KSA for few weeks before Work Permit is granted ??
As i understand, it is extremely risky to work anywhere without legal permit... is this the same case with person on Business Visit Visa in KSA ???

Need you help.

Thanks in advance.


Regards,
NM

Expatguru said...

NM

I am glad you asked before coming here. Never ever make this mistake. Unless you get a proper work permit, never even attempt this. If caught, you will be imprisoned and then deported. Not only this, you will have a permanent stamp on your passport that you have been deported. Is it really worth it?

Anonymous said...

Thanks for the advise my friend.
This is exactly what I told the company's HR, but the guy kept insisting that he has been practicing this with all other senior staff.

Thanks in anycase.


Best Regards,
NM

Irfan said...

I want to know that how much amount of money I can transfer using my iqama assuming that my salary is 1000 SAR per month.
Actually I am using my Indian bank account to recharge my VoIP account and I also transfer VoIP credit to my friends. It can be called a business. So is it illegal? How can I do this task legally and transfer maximum money with my own iqama without involving my company where I work. And if I have to involve my company what should I do?

Expatguru said...

Irfan,

Please fill in your query in the form using the link in the top right corner of this blog. I charge a nominal fee for my consultancy, which would get you a detailed, personalized and confidential reply by email.

jas said...

What is the best way to transfer funds from Saudi to an account in Germany (Euro)

Expatguru said...

jas,

Please fill in your query in the form using the link in the top right corner of this blog. I charge a nominal fee for my consultancy, which would get you a detailed, personalized and confidential reply by email.

Anonymous said...

I bank with SABB bank and I'd like to transfer 350K to a bank in the UK. What is the best option for that in terms of exchange rate and security?

Tarrier James said...

Wow! these are the wonderful tips to compare money. Thanks for sharing them with us.

ismail said...

İsmail
İ have question. i am student in USA. My family live in saudi arabia but not citizen. İ have issues for transfer fee and its upload my american account 3 days its too long and get the fee 65 dolar bank rajihi. Could you prefer bank in saudi arabia transfer and quick any bank?

Expatguru said...

Ismail,

Please fill in your query in the form using the link in the top right corner of this blog. I charge a nominal fee for my consultancy, which would get you a detailed, personalized and confidential reply by email.

Anonymous said...

Is there any limit for sending money from account in KSA to an indian NRE account?

Expatguru said...

If you are sending money disproportionate to your income, you will definitely be in the scanner of Saudi authorities. As far as your NRE account is concerned, sky is the limit.