Mumbai based X-Ray films importer - Transaction Process Outsourcing

Mumbai based X-Ray films importer - Transaction Process Outsourcing

03 Aug 2019 02:13 PM
 

Case:

A Mumbai based X-Ray film importer with import turnover of INR 6 cr had to make an import payment of EUR 1,00,000 against the import of master rolls of x-ray film from Germany. The client deals with a PSU bank which has been charging card rate on all forex transactions as informed by the client. The client had recently signed our TPO service and this was the first transaction to be covered by Myforexeye for this client.

Myforexeye Value Addition:

Having been informed that the bank has been charging card rate on all forex transactions, we had advised the client to get the bank margin fixed. We had also advised the client to send an application to the bank to authorise and provide Myforexeye dealers direct access to the bank’ Treasury to cover the forex transactions on behalf of the client. The client had had sent a proposal to the bank to set the margin as 3 piase for all forex transactions. The bank did not give a documented acceptance for the margin fixation but had given a verbal acceptance that 3-5 paise would be charged as the bank margin. However, direct access to Treasury was denied, stating low import turnover as the reason for the denial.

The rate for the import payment of EUR 1,00,000 was to be finalized with the forex back office of the bank. Myforexeye dealer called the forex back office and asked the banker to provide rate for this import payment. The forex back office after taking rate from the Treasury dealer quoted a net rate of 76.47. Myforexeye dealer argued that the EURINR spot rate was at 76.30 so with 3 paise margin and 3 paise cash/spot to receive, the net rate should be 76.30. After this argument, the banker quoted a net rate of 76.38. Myforexeye dealer told the banker at the back office to ask the Treasury dealer for the EURINR spot rate. The banker replied that the spot rate was at 76.35 and a margin of 3 paise was being charged. However, no cash/spot was being passed by the bank to us. Myforexeye dealer argued that the spot rate was at 76.30 so that we should get 76.30 as the net rate. After a lot of negotiations, the deal was finally closed at a net rate of 76.35 with 5 paise margin.

The client was satisfied with our service as with the intervention of Myforexeye, the forex rates that the client was being charged were successfully brought down from card rate. Also, the client saved 12 paise which amounts to INR 12,000 for this particular transaction.

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