Mumbai: The Reserve Bank of India said electronic trading platform for buying/selling foreign exchange by retail customers of banks, FX-Retail, is ready for rollout by the Clearing Corporation of India (CCIL) on August 5.
“The issue of transparent and fair pricing for retail users (individuals and Micro, Small and Medium Enterprises) in the foreign exchange market has been raised in various fora and in public interactions,” RBI said in a release.
“Such a mechanism will provide transparency while enhancing competition and lead to better pricing for retail customers,” the central bank added.
RBI said banks may charge their retail customers a pre-agreed flat fee towards administrative expenses, which should be publicly declared. Overall, this would bring down the total cost faced by the retail customer in the foreign exchange market. Facilitating direct access of retail customers to the market, rather than through price-setting by their banks, would also bring down the risk that banks face in warehousing transactions.
The FX-Retail platform can be accessed by any customer of a bank who needs to purchase or sell US Dollar against the Rupee for delivery on cash basis — same day, tomorrow basis – next day or spot basis — two days after the date of transaction.
There is no cap on the number of transactions per customer during a day, and the total amount of transactions of a customer shall be subject to the limit assigned by its bank. The central bank prescribed that the size of a single transaction is not allowed to exceed $5 million.
CCIL will not levy transaction charges if such transactions do not exceed $50,000 per day, RBI said.
A transaction charge of 0.0004 per cent shall be charged by the CCIL for transactions more than $50,000.
