Pune based Industrial Automation firm. Client had recently started using our TPO service and had an LC payment of USD 1,10,000.
Myforexeye Value Addition:
The client approached us to book the rate with his bank. At an inter-bank USD/INR spot of 73.54, the bank was providing the client 73.84 as the net rate, mentioning that a margin of 30 paise was being charged. Firstly, the client was not receiving a cash/spot on his import payment. Secondly, the client mentioned that a few days back, the bank charged a margin of 10 paise for his Buyer’s Credit payment of USD 3,00,000.
Our dealer asserted that we shall not pay of a margin of 30 paise. The banker claimed 30 paise as the margin agreed between the bank and the client on which our dealer replied on client’s behalf that we haven’t signed any such agreement. The banker was not agreeing to give a better rate, arguing that this was the standard margin charged by the bank for all deals of amount less than half a million U.S. dollars, which was actually not the case but a fallacious statement to extract extra charges from the client. After a lot of negotiation by our dealer to book the import deal at a margin of 10 paise, the deal was finally booked at a net rate of 73.58 against an inter-bank cash rate of 73.48, as the inter-bank spot had come down to 73.51.
The client got a cost reduction of INR 22,000 in buying USD 1,10,000 and we suggested the client to get his margin fixed with his bank so that he is not misled in future.