An auto manufacturing company with import and export turnover of more than 500 crs. They are actively managing their forex exposure following sound risk management practices, they are also having some irregular ODI (Overseas direct investment) payments.
Myforexeye Value Addition
They were having one ODI outward payment on 27th march 2018 of around Euro 3.65 million. They are banking with a private bank in the process of negotiating exchange rate for the above transaction with the bank they were facing some challenges. The bank at first quoted directly in EURINR ignoring the dollar cash spot of around 6.5 paisa and over charging 3 paisa from the EURINR spot rate. They asked bank to quote dollar and euro leg separately. In the process they were off-quoting dollar by 1 paisa that was negotiated at 64.9950 spot (market rate) at around 4:15 p.m. The bank still was off quoting Euro crosses by 8 pips, after negotiating with the bank to get the spot rate euro was negotiated at 1.2410. The payment was done at net rate 80.68 including 2 paisa margin.
In the above transaction bank didn’t gave the cash spot saying the transaction was done after market hours, we informed corporate that the cash post should be considered as well in this transaction. They provided a valid proof of the transaction and conveyed that it was done at 4:15 hence the cash spot is payable. Acting on instructions of the corporate the bank reversed them 8 paisa on this transaction, through our intervention in this transaction corporate saved net (INR 2, 92,000) in cash spot reversal. The corporate exercised their right and asked for the reversal of cash spot as the transaction value was very huge.
20 Apr 2019 04:05 PM
A Mumbai based chemical solvent importer regularly borrows funds in foreign currency backed by LC under Supplier’s credit route. The payments are made at sight to the beneficiary by the overseas lender which extends trade credit to the client for 90
06 Apr 2019 05:43 PM
A New Delhi based importer and distributor of Engineering plastics with an annual turnover of INR 1000+ crores. The company imports plastic resin from
22 Mar 2019 05:18 PM
Client is an exporter of medical equipments based in Hyderabad with exports worth INR 250 crores annually with exposures in USD and EUR. Client was de
11 Mar 2019 05:17 PM
Client is a scrap metal importer based in Surat with imports worth INR 30 crore annually. Client was dealing with a PSU bank and was not using any cre
04 Mar 2019 02:55 PM
Case: Client is a garment exporter in Tirupur, Tamil Nadu with exports worth INR 100 cr annually to U.S. and Europe and bills majorly in Euro. Client
22 Feb 2019 06:25 PM
A USD200m pharmaceuticals company which is a part of a USD 800m group. Set up in the ‘80s, it is one of the leading players in the world in the produ