Difference between purchase, discount and negotiation of export bills

The terms ‘bills purchase’,’ bills discount’, and ‘bills negotiation’ are respectively used by the bank for financing against ‘Demand Bills’,’Usance Bills’, and LC bills. The seller of goods (exporter) gets immediate money from the bank for the goods sold by him irrespective of whether it is a purchase, discount, or negotiation by the bank according…

Sweeping amendments in FDI rules

The Government of India introduced major changes in FDI policy on Monday, Jun 20, 2016, bringing most sectors and activities under automatic approval route. The changes introduced now simplifies the regulations governing foreign investments, increases sectoral caps with a small negative list. These amendments are the second sweeping changes in FDI policy after changes announced…

CCIL is now Trade Repository

The Clearing Corporation of India Limited (CCIL) is now designated as ‘Trade Repository’ for the OTC interest rate and Foreign Exchange Contract.  The designated trade repository will be regulated and supervised under section 34(2) of the Payment and Settlement Systems Act, 2007 (PSS Act).  Being a Financial Market Infrastructure (FMI), the repository would function under…

Online submission of Form A2 is now allowed

Henceforth the customers of banks may submit Form A2 through online. RBI in its communiqué to Foreign Exchange Dealers (February 11, 2016) who offer internet banking facility to their customers informed  that   the Authorised Dealers (ADs)  may allow online submission of Form A2. Further they may also enable uploading/submission documents if required for establishing the…

Meaning of Dirty Float

The Central Bank (RBI in India) sometimes intervenes in the volatile foreign exchange market in order to manage excessive volatility and to influence the value of a floating currency in an orderly condition. Such intervention of Central bank is called “Dirty Float”. The recent communication of the regulator informs that the bank would intervene in…