A Maharashtra based industrial equipment supplier is in existence since last 30 years and are exporting their products since a decade now. They are having export turnover of around 15cr with document size of $ 25,000-50,000 each every week. They are having banking arrangements with the private bank and not having any fixed margin. Management is not cross checking the conversion rates from any source and want to explore if there is any opportunity loss to them in this respect.
Myforexeye Value Addition
To get the clarity on the hidden charges we came at a conclusion to do an audit of their transaction. In the audit of a previous transaction we found there were some hidden charges. To explore the extent of these hidden charges we decided to negotiate a transaction for them of $ 25,654 inward the bank RM was quoting with a 40 paisa margin and we negotiated at 17 paisa in the first transaction. We made a net saving of 25 paisa (INR 6413.5) in this transaction as the bank offered 68.48 to them the deal was negotiated at 68.23. We can bring our margin to 8-10 paisa going forward. Considering their forex exposure they can make a yearly saving of around INR 3-5 lakh through our intervention.