Foreign Exchange for your Travel Abroad

People travel abroad for various reasons. It can be for Leisure, Business or Education.

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For once let us think that it is post COVID-19 era and we are all charged up to visit our favorite international destination.

We have our tickets ready, VISA is ready and then what else?

Most important one which somehow takes the backseat in all the preparation is the money which we need for our expenditure abroad.

If you are travelling abroad from India for the first time, there are so many questions that arises in terms of money management.

“How do I carry money?”, “Should it be in Rupees, or should it be the destination currency?”, “What are the forms in which I can carry?”.

First things first, depending on your type of travel which is Business, Leisure or Education, there are certain limits set on buying Foreign Exchange in India by the Indian regulator which is the RBI (Reserve Bank of India)

For a detailed information on the limits please visit the link below:,within%20180%20days%20of%20return.

Once you have understood the limits then comes the mode of carrying the money.

It is always advisable to carry small amounts in hard cash and the rest in a digital form.

Hence, comes the various options. If you are traveling for a shorter period like in case of a leisure travel, International Credit Cards issued by any bank is an easy option.

If you are staying abroad for a longer duration for education purpose, it is advisable to remit the university fees via wire transfer option also known as a SWIFT Transfer.

Forex Prepaid Cards:

In any of the above cases, I feel the easiest option is to carry a Forex Pre-paid card which is issued by most of the Indian banks.

It is same as buying forex but in a digital form. You just have to load or charge the card and use it like any other Visa or Master Card.

Advantages of Forex Prepaid Cards:

It is safe in terms of security, you have a control and can track the spends easily.

In case of loss or theft, the card can be blocked instantly and your money is safe.

If cash is lost everything is lost. If card is lost, money is still safe.

Most of the card providers provide the option of ‘Emergency cash’ in case you have lost the card and are stranded without money.

A card can be used to swipe and also withdraw cash based on your requirement.

You can use it for online shopping.

If you are a student you can have the money on the card safely till you open a bank account abroad.

Once you open an account then the funds on the card can be transferred to the account.

You can use the card at the banks for cash over counter, where the banker swipes the card and pays you in cash for a small fees.

Once you are back from your travel, you can encash the Forex available on the card

Disadvantages of Forex Prepaid Cards:

Every product has some advantages and disadvantages and Forex Cards are no exception.

All the cards are either magnetic strip based or chip based. If any of these gets damaged while traveling then the card is useless.

Cards might stop working suddenly when the servers or network is down.

Prepaid cards are sold over the counter and does not have the card holder’s name embossed on it.

Some banks and shops do not accept the card if there is no card holder’s name on it.

Foreign Exchange at Airports:

Whenever we think of air travel, first thing that comes to our mind is Airport. Almost everything is available at the airport and all of them are expensive including Forex.

Buying Forex at Airport has to be the last resort as the availability may not be there and the rates will be expensive because of the high over heads.

Forex for Students:

Students who travel abroad stay for a longer period. Hence the financial planning is a rigorous one and needs a lot of detailing. There are 3 types of expenditures for a student abroad:

  • Payment of University Fees which might be a annual one.
  • Payment of fees for hostel.
  • Payment of miscellaneous college related expenditure.
  • Payment of day to day expenses

For a student the best way of handling forex is via the Forex Remittance or the SWIFT transfer which is the way of transferring the funds from here in India from a bank account to an account which is in another country.

But the money which is sent and the money that is received are in two different currencies.

It is also a process of buying Forex with the reason being education and the rates are applied as in any forex transaction.

Banks that give education loans themselves process these wire transfers and charge a fee on the same.

The service fee or service charges on each wire transfer used to be very high previously, but now it has become nominal.

Remittance which is done is scrutinized very thoroughly and for education purpose the payment has to come from parents only or as an exception it can be funded by the students’ close blood relative only.

Forex for Businesses:

The limit of Forex buying in business travel is more compared to any other travel type.

The payment is done by an organization and the employee of the company has to produce a letter called as a LERMS letter.

Rest all other rules apply in the same manner in which it is applied for other travel types.

Forex service providers:

Forex service providers are the businesses which offer the service of selling and buying forex to travelers traveling abroad irrespective of their travel type.

In the process the service providers keep their profit margin.

Depending on the volume of business they transact, each service provider is categorized into Restricted Money Changer (RMC), Full Fledged Money Changer, Authorized Dealer-I and Authorized Dealer-II.

Based on the category, the governing body which is the RBI, issues licenses to carryout the business.

So with this blog I have tried to cover the different types of travel and why travel type is important for buying forex and also we have seen the different types of Forex Service providers.

This gets to the conclusion of the blog, kindly feel free to post a comment and suggest in case I need to write on any other topic related to Forex.

1 thought on “Foreign Exchange for your Travel Abroad”

  1. A very crisp and informative explanation on Forex. This blog gives a good idea on what one should do while travelling abroad . If your plan needs flawless execution, not just deciding on destinations or the travel dates , its also necessary to plan on how we carry money, which is obviously a vital ingredient and this blog will help all types of travellers like business people, students and vacationers!


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