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The Reserve Bank of India (RBI) in its article has said that the share of inward remittances from GCC (Gulf Cooperation Council) region dipped sharply during 2020-21 on account of the economic stress created by the COVID-19 pandemic. It noted that the share of remittances from the Gulf nations in India's inward remittances is estimated to have declined from more than 50 per cent in 2016-17 (last surveyed period) to about 30 per cent in 2020-21. On the other hand, advanced economies like the US, the UK and Singapore emerged as important sources for the country for remittances, accounting for 36 per cent of the total payments in 2020-21.

It stated that overall, notwithstanding headwinds of COVID-19, India's inward remittances have proven to be a resilient source of current account receipts. The decline in remittances from the Gulf countries during 2020-21 reflects a slower pace of migration and a larger presence of Indian diaspora in informal sectors which was hit the most during the pandemic period. As a result, the proportion of small size transactions in total remittances increased in 2020-21. The US surpassed the UAE as the top source country, accounting for 23 per cent of total remittances in 2020-21. This corroborates with the World Bank report (2021) citing an economic recovery in the US as one of the important drivers of India's remittances growth as it accounts for almost 20 per cent of total remittances.

The article also concluded that the majority of the remittances continue to be routed through private sector banks, followed by public sector banks although foreign banks have witnessed a marginal increase in remittances transactions, particularly from Singapore. It also noted that stressed income conditions are discernible from small size transactions gaining a share in total remittances during the pandemic period.