The 10th edition of FEDAI Rules came in force from 01 April 2019. Concepts of normal transit period and notional due date are linked to the interest rate on export bills and to arrive at the due date of the bill/export credit. Many people get confused with the Normal Transit period with the time taken…
EXIM Bank of India was established by the Government of India in 1982 under the Export-Import Bank of India Act, 1981 for financing, facilitating, and promoting India’s international trade. The bank conducts export market studies and assists Indian Joint ventures in third countries. The bank offers international merchant banking services and financing for overseas investment…
The basic functions of RBI (Reserve Bank of India) are “to regulate the issue of Bank Notes and keeping of reserves to secure monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”In addition, to control the supply of portable money circulation, Reserve Bank of India…
The banks which are officially authorized by RBI to deal in foreign exchange transactions are called ‘Authorised Dealers’ (ADs). Foreign Exchange Dealers Association of India (FEDAI) is an association of ‘Authorised Dealers’ set up in 1958 under sec 25 of companies’ act 1956. As per RBI guidelines, it is obligatory on the part of all…
The government of India enacted the Foreign Exchange Regulation Act, 1973 (FERA) to tackle the foreign exchange crisis in the country. The purpose of FERA was to regulate foreign exchange dealings and other related activities to conserve the country’s foreign exchange reserves. The stringent FERA rules were not amenable to integrating the Indian economy into…
FEDAI prescribes rules regarding trading hours, Exchange rate, Crystallization, of foreign currency, extension/cancellation of contracts etc. The FEDAI rules govern all Authorised Dealers of foreign exchange in India. Some of the important rules of FEDAI are as under. Trading Hours of Authorised Dealers (Rule 1): Exchange trading hours for interbank forex market in India would…
‘Riksbank’ a joint-stock bank established in Sweden in the year 1668 is recognized as the world’s first central bank. The bank was commissioned to lend funds to the government and to act as a clearinghouse for commerce. But in the year 1897 the ‘Riksbank’ deserted commercial lending and it was granted a monopoly for issuing…
A Special Non-Resident Rupee (SNRR) Account is opened with Authorized Dealer (AD) banks in India for specified transactions related to trade, foreign investments, External Commercial Borrowings (ECBs), and more. It serves as an alternative to executing inward/outward remittances in convertible foreign currency for each transaction with residents in India. This account allows non-residents with business…
The FEDAI Rules (10th edition) for import transactions came in to force with effect from 01 April 2019. The FEDAI rule 3.1 deals with the application of exchange rate, rule 3.2 deals with the application of Interest, rule 3.3 deals with crystallisation of Import Bill under Letters of Credit as detailed below; Application of exchange…
The revised FEDAI Rules (10th edition) for export transactions came in to force with effect from 01 April 2019. The FEDAI rule 2.1 deals with Post shipment Credit in Rupees, Application of Interest, Normal Transit Period, Substitution/Change in Tenor, and Export Bills sent for collection. Post shipment credit in Rupees:The exchange rate for post-shipment Foreign…
