Summary: Union Bank of India is a scheduled public-sector bank that offers foreign-exchange and outward-remittance services through designated authorised-dealer branches. Its official Form A2 names the executing AD branch, while the bank publishes a forex-branch locator, service-charge material and grievance channels. This profile explains what the bank’s role permits, who may use the service, the documents and costs to verify, settlement and refund controls, and current Indian GST and TCS issues. It does not treat LRS as permission to fund offshore leveraged forex, CFDs or margin calls.
- Union Bank’s Legal Identity and Foreign-Exchange Role
- Authorisation is broad at bank level but conditional at transaction level
- Who May Remit and Which Purposes Need Evidence
- Resident individuals under LRS
- Purpose determines the document set
- KYC, Form A2 and the Branch Processing Trail
- An intermediary does not become the authorised dealer
- Exchange Rate, Bank Charges, GST and Quote Expiry
- Rates and third-party deductions can change the delivered amount
- GST is distinct from TCS
- Settlement, Returns, Cancellation and Refund Controls
- Returned funds may not equal the original INR debit
- Grievance Route and Regulatory Limits
- LRS cannot fund overseas margin or leveraged forex speculation
- Current LRS TCS must be applied to the actual purpose
- Frequently Asked Questions
- 1. Is Union Bank itself the executing remittance institution?
- 2. Can every Union Bank branch process every foreign-exchange request?
- 3. Does the USD 250,000 LRS limit apply separately at each bank?
- 4. Are the bank’s charges fixed when Form A2 is submitted?
- 5. Can LRS be used to fund an overseas forex or CFD margin account?
- 6. What happens if the beneficiary details are wrong?
- 7. Where should an unresolved remittance complaint be escalated?
- Key Takeaways
Union Bank’s Legal Identity and Foreign-Exchange Role
The executing institution is Union Bank of India, a scheduled public-sector bank listed by the Reserve Bank of India among agency banks. For the customer-facing service described here, the stronger transaction evidence is the bank’s own official Form A2: it requires the remitter to authorise the named authorised-dealer branch to debit an eligible account and effect a foreign-exchange remittance. The bank also maintains a forex-branch locator. This supports a profile of remittances executed by Union Bank through its designated AD branches, not a claim that every branch can approve every purpose.
Authorisation is broad at bank level but conditional at transaction level
RBI’s framework permits an Authorised Dealer Category-I bank to conduct permissible current-account and capital-account foreign-exchange transactions within FEMA, RBI directions and its authorisation. The label does not override purpose restrictions, documentation, sanctions screening, LRS aggregation, source-of-funds review or internal risk controls. A customer can be asked for clarification, additional evidence or a different processing branch, and the bank may reject an instruction that does not fit the declared purpose or current rules.
| Verification item | Current finding | Boundary |
|---|---|---|
| Legal entity | Union Bank of India | Do not confuse with an agent or comparison portal |
| Service channel | Designated AD/forex branches | Not every branch or request is automatically eligible |
| Core form | Form A2 for outward remittance | Purpose and declaration remain customer-specific |
| Regulatory basis | FEMA and RBI directions | Bank status does not legalise a prohibited purpose |
| Excluded profile | No offshore CFD or margin funding established | Foreign regulation is not Indian permission |
Who May Remit and Which Purposes Need Evidence
Resident individuals under LRS
The Liberalised Remittance Scheme allows a resident individual to remit up to USD 250,000 equivalent in a financial year for permitted current-account transactions, capital-account transactions or a combination, subject to exclusions and conditions. The limit is aggregate across authorised dealers and covered purposes, not a fresh allowance at each bank. The remitter declares prior utilisation and supplies PAN and purpose information. A minor’s transaction involves guardian formalities, and a family cannot simply pool unused limits without each person independently meeting eligibility and documentation requirements.
Purpose determines the document set
Common purposes can include overseas education, medical treatment, private visits, maintenance of relatives, gifts, donations and qualifying investments. A purpose label is only the start. Education may require an admission letter, fee demand and beneficiary bank details; medical remittance may require an estimate or hospital evidence; maintenance or gifts may require relationship and beneficiary information; investment remittances need the permitted instrument and destination to be established. Corporate, trade, import, export, RFC or EEFC transactions follow different account and evidence rules and should not be collapsed into an individual LRS journey.
| Purpose example | Typical evidence to confirm | Control question |
|---|---|---|
| Education | Admission/fee demand, student and beneficiary details | Is the payee the institution or a verified service provider? |
| Medical | Hospital estimate or invoice and patient details | Is advance or reimbursement treatment documented? |
| Maintenance/gift | Relationship, beneficiary and source of funds | Is the transaction permitted and correctly coded? |
| Travel | Travel identity and stated purpose | Are cash/card/remittance limits separately satisfied? |
| Investment | Instrument, destination and ownership details | Is the capital-account transaction permitted? |
KYC, Form A2 and the Branch Processing Trail
Union Bank’s official Form A2 requests the applicant’s name, PAN, address, debit account, foreign currency and amount, beneficiary name, address, bank and account details, purpose code and declarations. The branch may also require proof of identity and address, account history, source of funds, relationship or invoice evidence, and regulatory declarations. Names and account numbers must match supporting records exactly; intermediary-bank instructions and country-specific routing fields can also be material.
An intermediary does not become the authorised dealer
An education consultant, travel agent, merchant portal or technology vendor may help collect details, but Union Bank remains the bank that accepts or rejects the instruction and executes the conversion and remittance. The customer should confirm whose terms apply, where funds are debited, which entity issues the remittance advice and who handles a return. A third party’s quote, approval message or overseas licence is not evidence that the proposed transaction has passed Union Bank’s FEMA and KYC review.
- Obtain a branch or official-channel quote tied to the currency, amount and value date.
- Submit Form A2, purpose code, PAN and purpose-specific evidence.
- Verify beneficiary name, account or IBAN, bank identifier and intermediary details.
- Review the INR debit, exchange rate, bank charge, tax and TCS before authorising.
- Retain the debit advice, SWIFT or remittance reference, TCS evidence and beneficiary confirmation.
Exchange Rate, Bank Charges, GST and Quote Expiry
The customer’s total cost is not captured by one commission number. It can include the bank’s exchange rate or spread, a remittance commission, SWIFT or communication expense, out-of-pocket charges, correspondent or beneficiary-bank deductions, GST and, where applicable, TCS. Union Bank publishes service-charge material, but the applicable schedule, customer segment, channel, amount and transaction purpose must be checked on the processing date. Accordingly, this article does not present an undated rate as a guaranteed current charge.
Rates and third-party deductions can change the delivered amount
A foreign-exchange quote can expire before the transaction is funded or approved. The value date and cut-off time affect processing, while correspondent banks may deduct charges unless the payment instruction and charging option provide otherwise. The remitter should ask whether the beneficiary is expected to receive a fixed gross or net amount and whether additional funds are needed to cover overseas deductions. A fee waiver does not imply that the exchange rate is costless.
GST is distinct from TCS
GST applies to taxable banking services and foreign-currency conversion under the applicable valuation rules, and should appear on the bank’s invoice or debit advice. TCS under the income-tax law is a collection against the remitter’s PAN, not consideration retained by the bank as a service fee. Customers should separately reconcile the currency conversion, service charge, GST and TCS rather than treating the final account debit as one unexplained amount.
| Cost element | Who determines it | Evidence |
|---|---|---|
| Exchange rate/spread | Union Bank quote at processing | Rate, currency and timestamp |
| Bank commission | Current bank schedule/quote | Charge line and GST invoice |
| SWIFT/OPE | Bank and routing requirements | Debit advice |
| Correspondent deduction | Intermediary/beneficiary banks | Payment and received-amount evidence |
| TCS | Income-tax law and declared purpose | PAN-linked tax statement/certificate |
Settlement, Returns, Cancellation and Refund Controls
An outward remittance can pass through correspondent banks before reaching the beneficiary. Processing time depends on cut-offs, currency, destination, compliance checks, complete routing data and beneficiary-bank operations. A debit confirmation does not by itself prove final credit. Track the bank’s remittance or SWIFT reference and obtain beneficiary confirmation, especially when an invoice or admission deadline applies.
Returned funds may not equal the original INR debit
A payment may be returned for a closed or mismatched account, incorrect routing, compliance screening or beneficiary rejection. Correspondent deductions can reduce the returned foreign currency, and reconversion uses the exchange rate available when the bank processes the return, not necessarily the original rate. Bank and GST adjustments depend on the charge and transaction status. The customer should request a written break-up of the returned currency, conversion rate, deductions, tax adjustment and credit date.
Cancellation is not assured after release to the correspondent chain. A recall is a request, not a guarantee, and may incur additional charges. Suspected beneficiary fraud should be reported immediately with the transaction reference, although the cross-border payment may already be irreversible. Do not wait for the beneficiary to investigate before notifying the bank.
Grievance Route and Regulatory Limits
Union Bank publishes toll-free customer-care numbers, an online grievance facility and escalation to its customer grievance officer. A complaint should identify the branch, date, amount, currency, purpose code, remittance reference, disputed charge and requested remedy. If the bank does not resolve an eligible complaint within the prescribed framework, the customer can review escalation through the RBI Complaint Management System under the Integrated Ombudsman Scheme. RBI escalation is not a substitute for promptly supplying missing beneficiary or KYC evidence.
LRS cannot fund overseas margin or leveraged forex speculation
RBI’s LRS material excludes remittances for trading in foreign exchange abroad and for margin or margin calls to overseas exchanges or counterparties. Residents may undertake electronic forex transactions only through permitted channels and for permitted instruments and purposes. A foreign FCA, ASIC, CySEC or similar licence does not create Indian-resident eligibility, and absence from RBI’s Alert List is not approval. Union Bank’s authorised-dealer service must not be described as a gateway to an offshore leveraged-forex or CFD account.
Current LRS TCS must be applied to the actual purpose
From 1 April 2026, the Income-tax Act, 2025 framework uses a ₹10 lakh threshold for relevant LRS collections, with purpose-specific rates: education or medical remittances generally attract 2% on the covered excess, while other covered LRS purposes generally attract 20%; qualifying education-loan treatment is separately specified. The bank must classify the transaction using current law and declarations. TCS is creditable subject to tax records, but it does not convert an otherwise prohibited remittance into a permitted one.
Frequently Asked Questions
1. Is Union Bank itself the executing remittance institution?
Yes, for the service described the remittance is processed through Union Bank’s designated authorised-dealer branch. A consultant or portal may assist but does not replace the bank’s regulatory role.
2. Can every Union Bank branch process every foreign-exchange request?
No. The bank uses designated forex or AD branches and each transaction remains subject to purpose, KYC, documentation, routing and internal controls.
3. Does the USD 250,000 LRS limit apply separately at each bank?
No. It is an aggregate financial-year limit across authorised dealers and covered purposes for the resident individual, subject to current exclusions and conditions.
4. Are the bank’s charges fixed when Form A2 is submitted?
Not necessarily. Exchange rates can move and the applicable service schedule, SWIFT costs, correspondent deductions, GST and value date must be confirmed in the transaction quote.
5. Can LRS be used to fund an overseas forex or CFD margin account?
No. RBI material excludes remittances for overseas foreign-exchange trading and margin or margin calls. A foreign regulatory licence does not alter that Indian restriction.
6. What happens if the beneficiary details are wrong?
The payment may be delayed, rejected or returned. A recall is not guaranteed; overseas charges and reconversion at the later exchange rate can affect the refunded INR amount.
7. Where should an unresolved remittance complaint be escalated?
Use Union Bank’s branch and online grievance route, then its grievance officer. An eligible unresolved complaint may be taken to RBI’s Complaint Management System under the applicable Ombudsman framework.
Key Takeaways
- Union Bank executes covered forex and remittance transactions through designated authorised-dealer branches.
- LRS limits aggregate across banks and purposes; Form A2 and purpose-specific evidence are central controls.
- Total cost includes the exchange rate, bank and messaging charges, possible correspondent deductions, GST and TCS.
- Settlement and refund amounts can change because of routing deductions and later reconversion rates.
- LRS does not permit offshore forex trading, CFDs or overseas margin and margin-call remittances.
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Disclaimer: This article is a factual regulatory and process profile based on primary materials reviewed for 13 November 2026; it is not legal, tax, FEMA, banking, accounting, travel, education, investment or foreign-exchange advice and it does not recommend Union Bank of India or any remittance, currency, destination, beneficiary, intermediary or transaction. Bank service availability, designated branches, exchange rates, spreads, commissions, SWIFT and out-of-pocket charges, correspondent deductions, cut-off times, documents, sanctions screening, processing times, refund mechanics and grievance contacts can change. A scheduled bank or authorised-dealer status does not require the bank to accept every instruction and does not make a prohibited purpose permissible. The Liberalised Remittance Scheme is subject to residency, aggregate utilisation, purpose, source-of-funds, KYC, Form A2, FEMA and RBI conditions; it must not be used for overseas foreign-exchange trading, CFDs, margin or margin-call payments. GST and TCS depend on current law, valuation, purpose, threshold, remitter status and declarations, and tax collection is not final tax liability or regulatory approval. Readers should obtain a written bank quote, confirm the exact executing branch and beneficiary routing, verify all current RBI and income-tax provisions, preserve the complete debit and settlement trail, and obtain advice from qualified FEMA, tax and legal professionals for their facts. TaxGuru accepts no responsibility for any rejected or delayed remittance, exchange-rate loss, charge, correspondent deduction, tax collection, refund shortfall, frozen payment, fraud, regulatory breach, interest, penalty or decision made using this article.
