Check the rate from XE application which should be your base and then shop around. Few banks take their own fees, so better to check before doing anything. Federal Bank has this extra charge, as if they are giving out a loan.
When you go to a branch and ask them for a fine rate, the amount of remittance should be on the high side. Amounts in the range of 1000 to 2000 usd they will not bother.
Banks are not too keen because money is going out and also due to the work involved in the background which is as follows
- RM calls up treasury asking for the rate - Treasury will give their mouthful to the RM if the amount is small or negligible.
- Rm is good but still gets the rate. Then call customer to ask him if the rate is ok. Customer then haggle with RM and lectures that he has 1.35 lakh in SB ac, his father has 35K in his sb ac etc. RM cannot say “Get lost” but remains polite and says in a nice way take it or leave it or shuts the phone by saying “boss is calling me” will call you back. There will never be a call back…
- Customer then say let me think about it as he is still shopping around. Rm says this rate is valid for 5 min or less. Customer again gives lecture on how valuable his relationship is to the bank - he quotes his uncle opened an account with the bank because he influenced him and reminds the RM of 1.35 lack in sb ac). RM listens patiently then customer confirms the rate.
- RM says pls send email for rate confirmation. Customer takes few minutes and once he gets your email, then goes and talks to treasury to book the deal. Treasury again gives her a mouthful and tells her not to waste his time anymore.
- Once booked, RM then calls customer to get the A2 forms ready (RM does not do rate booking without this form in hand and funds in ac) This is then sent to their Trade finance or back end team.
- When this is going on the customer will call up and say “What Happened”. RM says “what happened what”? Customer says the fx transaction what happened. RM says under process. Few calls keep happening. God forbid if mobile number and whats app number is given. Phone will be full of what happened messages. Better to temporary block the number.
- Each bank has their own cut off time based on currency of txn due to time difference and currency holidays.
- Customer keeps calling and becomes clever and ask for Swift copy. RM says it will take time and the best of banks generate swift only after two hours of transaction. RM to avoid further conversation says it comes to your email directly.
9 Most of the foreign banks have straight through processing which means if all details are ok, it will be credited to beneficiary account without manual intervention. - RM will be under pressure until the beneficiary confirms to customer that they have received funds.
- God Help if RM did not advise customer of the beneficiary bank charges, as customer will start shouting and says why he was not advised the difference between charges “Our” or “BEN” or “SHA”. RM will be praying to God to give her patience to explain all this for a transaction of USD 1,000.
The above is the minimum work a RM has to do for outward remittance when customer wants the transaction to happen through branch. Online they dont care as there is no RM intervention.
Think of above transaction or just call customer “Good morning sir, open FD online” we give the best rate possible.
RM prefers the second option than the first hence FX is not encouraged until it is in min 10 lakh plus
PS: RM is She and Customer is HE - Just for clarity in the above case