Punjab Sweet House is an exporter of Sweets and Snacks. Having exposure in USD, AUD and AED with a turnover of 10-15cr, the promoters are little aware about the forex market nitty-gritty’s. Never focussed on the exchange rate being applied, the bank always converts their receivables at the card rate*.
Myforexeye Value Addition
We have discussed banking issues with the client and aware them about forex market, live interbank platform etc. To counter the issue they are facing of not getting the inter-bank live rates against their inward export remittance we suggested them to negotiate with the bank using our referred live rates. They were not having any fixed margin arrangements with the bank, advised them to negotiate a fixed margin with the bank.
In the very first transaction of 14980 AUD inward received, we negotiated a net rate of 49.19 with 9 paisa margin against card rate of 48.84. AUDINR is derived from USDINR & USDAUD crosses rate for this transaction we negotiated USDINR at 64.30 & USDAUD at 1.30470. Bank manipulates SME’s and overcharge them even more when rates are derived from USDINR and crosses as these SME’s don’t have any access to live interbank rate.
Our value addition was to negotiate the deal at a margin of 9 paisa only & difference of 49.28 spot against 48.84 as they would have got it. Net Gain was 0.44 paisa (INR 6591). We ensure end to end support to our clients helping them in reporting the transaction to their branch.
Advised client to subscribe to our Product namely TPO (Transaction process outsourcing) wherein the client authorises our dealers to book rates against their Forex transaction on behalf of the company. Our dealer transacts using live inter-bank terminals to negotiate with the bank and get the best rate for the client. TPO is a unique product of ours whereby we provide arrangement for transacting on behalf of our clients to negotiate the best live rate against their transaction.
*Card Rate – Exchange rates fixed by the bank for merchant transactions.