Selecting the best service provider is essential when it comes to managing your foreign exchange needs. Despite the abundance of choices, it is imperative to use money exchangers approved by the RBI to guarantee secure, legitimate, and transparent transactions. There are indisputable advantages to employing a licensed money changer, whether you’re looking for a money changer near me or a full-service provider to help with your travel or business currency needs. We’ll look at why using licensed currency exchangers is the best way to guarantee smooth currency exchange transactions and competitive exchange rates in this post.
Why Should You Do Currency Exchange with Authorized Dealers?
When it comes to exchanging foreign currency, it is crucial to use the services of an authorized money changer. These entities, such as RBI-authorized full-fledged money changers (FFMCs), are regulated by the Reserve Bank of India (RBI). They adhere to strict guidelines that ensure fair exchange rates, transparency, and safety. Unlike unauthorized currency changers, which may charge hidden fees or offer unfair rates, licensed money changers provide a reliable, secure environment for exchanging currency.
Using an authorized money exchanger also eliminates the risk of receiving counterfeit currency, which is a significant concern when dealing with unauthorized dealers. RBI ensures that all licensed money changers follow stringent security protocols, ensuring a seamless and safe experience for customers.
What Are the Benefits of Using RBI Authorized Money Changers?
There are several advantages to using an RBI-authorized money changer for your currency exchange needs. Here are some of the key benefits:
Competitive Exchange Rates
Authorized currency changers offer competitive exchange rates, as they are regulated by the RBI. This prevents customers from being overcharged, as is often the case with unauthorized dealers. Whether you are looking for the best rate for foreign currency or want to avoid hidden fees, a licensed money changer will provide the most accurate and fair conversion rates.
Legal and Secure Transactions
RBI-authorized money changers follow legal protocols, ensuring that each transaction is documented and legitimate. This legal backing is critical for businesses and individuals who want peace of mind when exchanging foreign currency. The RBI’s guidelines ensure that authorized money changers operate transparently, reducing the risk of fraud or illegal activities such as money laundering.
Convenient Access to Services
Finding an authorized currency changer near you is convenient. With companies like IBRLIVE offering their services both in person and online, it’s easy to access currency exchange services anytime. Whether you’re traveling abroad or conducting business internationally, licensed money changers ensure that your currency needs are met swiftly and securely.
Defense Against Falsified Money
Receiving fake money is one of the major risks associated with doing business with unlicensed money changers. Nonetheless, the RBI keeps a careful eye on licensed money changers to make sure that only real currency is exchanged. Customers are far safer with licensed money changers because of this extra security measure.
How To Exchange Foreign Currency in India?
Exchanging foreign currency in India has become easier and safer with the help of RBI-authorized money exchangers. IBRLIVE, a prominent forex consultancy, offers efficient services for those seeking to exchange foreign currency. As an RBI-authorized money changer, IBRLIVE ensures that you receive the best rates while staying compliant with government regulations.
Here’s how you can exchange currency in India:
Locate a licensed money exchangers: Use keywords like “currency changer near me” to find RBI-authorized money changers, or you can visit IBRLIVE’s website for professional currency exchange services.
Present identification: For any currency exchange, you need to present valid identification such as a passport, PAN card, or UID card.
Get the best exchange rates: Always inquire about the current exchange rates, and choose a licensed money changer like IBRLIVE to ensure you are not overcharged.
Transaction completion: Upon successful verification, you’ll receive your foreign currency, whether in cash or traveler’s checks.
Choosing an authorized dealer like IBRLIVE guarantees a smooth, safe, and efficient process for all your currency needs.
In conclusion, using an RBI-authorized money changer offers numerous benefits, including fair exchange rates, legal protection, security against fraud, and access to a wide range of forex services. Whether you’re looking for a currency changer near you or seeking reliable and secure foreign exchange services, licensed money changers like IBRLIVE ensure that your currency needs are met with professionalism and transparency.
Always choose an authorized money exchanger for a hassle-free, secure, and legal currency exchange experience!
A forward contract is a contract between the bank and its customer to buy or sell a specific currency at a specified future price for delivery on a specified future day beyond the Spot Date.
Period of Delivery:
A contract can be booked for a future fixed date of delivery or can have a window period of delivery where the contract must state the first & last date of delivery. The window period should be specified by the customer in such a way that the last date of delivery shall not exceed 1 month.
For Example: 19th Apr 2023 to 18th Mar 2023 & 31st Jan 2023 to 28th Feb 2023
Delivery in case of Holiday:
If the fixed date of delivery or the last date of delivery is a known holiday (which is known at least 3 working days before the date) the last date for delivery should become the preceding working day. In case of suddenly declared holidays, the contract shall be deliverable on the next working day
For Foreign Exchange business, Saturday will not be treated as a working day
Early delivery:
Yes, a forward contract can be utilized before its utilization period starts. In this case, the bank can recover or pay the swap difference. The bank also recovers the Interest on outlay and inflow of funds for such swaps.
Extension of forward contract:
In an extension of the forward contract, the earlier contract is cancelled at the current selling or buying rate and rebooked simultaneously at the current market rate. The difference between the earlier booked rate and the rate at which the contract is cancelled is recovered or paid to the customer.
Recovery/ Payment of Loss /Gain:
In case of cancellation of a contract at the request of a customer and if the request is made on or before the maturity date the bank recovers the loss or passes on the profit, the actual difference between the booked rate and the rate at which the cancellation is affected.
In the absence of any instructions from the customer, a contract which has been matured is cancelled by the bank within the 3 working days after the date of maturity
Please note that if a contract is cancelled after the maturity date, the bank is not liable to pass on the profit on the contract, if any, but the loss incurred in the contract shall be recovered from the customer.
Different Schemes of Hedging of Foreign Currency Exposure through forward contracts?
There are two types of exposures under which hedging can be done i.e. Contracted & Anticipated, all existing facilities such as Past Performance, Simplifies hedging, and Self-declaration have been withdrawn with effect from 01 September 2020 by RBI vide its master direction RBI/FMRD/2016-17/31 updated on 01.09.202.
What is contracted exposure?
It is an exposure to the exchange rate of the Indian Rupee against a foreign currency on account of current and capital account transactions permissible under FEMA, which have already been entered into. For Example, if an exporter has already received a purchase order and agreed to supply goods against it, then booking a forward contract against the same order is called contracted exposure.
What is anticipated exposure?
Exposure to the exchange rate of the Indian Rupee against a foreign currency on account of current and capital account transactions permissible under FEMA, which are expected to be entered into the future. For Example, if an exporter expects that he will receive a purchase order of at least 1 million dollars every month based on his experience and prospects, then booking a forward contract for such future exposures is called anticipated exposure.
What is the difference between contracted exposure and anticipated exposure for hedging foreign currency exposure by resident Indians?
Contracted Exposure
Anticipated Exposure
Exposure is hedged based on the contractual exposure which already exists
Exposure is hedged based on the exposure which is anticipated in future.
Proof of underlying exposure is not required for booking forward contracts up to USD 10 Million or its equivalent, however, the bank can demand the same whenever is required
Proof of underlying exposure is not required for booking forward contracts up to USD 10 Million its equivalent
Application & Forward Booking confirmation to be submitted to AD Bank within 15 calendar days through digital/ physical mode
Application & Forward Booking confirmation to be submitted to AD Bank within 15 working days through digital/ physical mode
Can be rebooked or cancellation
Can be rebooked or cancelled
Profit or loss fully passed or recovered
Losses are recovered upfront however profit is withheld & passed to the customer after submission of necessary documentation proof of Cash Flow.
Authorised Dealers may, in exceptional cases, pass on the net gains on contracts booked to hedge an anticipated exposure whose underlying cash flow has not materialised, provided it is satisfied that the absence of cash flow is on account of factors which are beyond the control of the user
The notional and tenor of the contract should not exceed the value and tenor of the exposure.
The notional and tenor of the contract should not exceed the value and tenor of the exposure.
If outstanding notional increasing USD 10 mio in the same FY underlying documents are required for fresh booking as well as for existing outstanding contracts
If outstanding notional increasing USD 10 mio in the same FY, evidence of cash flows on a contract basis is required for all outstanding contracts
The same exposure should not be hedged using any other derivative contract.
The same exposure has not to be hedged using any other derivative contract.
CGTMSE Scheme: Maximum Coverage Raised to Rs. 500 Lakhs
The Indian economy is supported by micro and small businesses (MSEs). However, because they frequently lack collateral or credit history, small companies frequently struggle to get loans from conventional financial institutions. (CGTMSE) the scheme was created by the Indian government to address this issue.
(SIDBI) and (MSMEs) introduced the CGTMSE program in August 2000. By ensuring a percentage of the loan amount, the initiative aims to give micro and small businesses access to credit without the need for collateral.
A lender (bank or finance institution) gives loans to MSEs within the CGTMSE scheme without requiring any kind of security. Any micro or small enterprise engaged in manufacturing, trading or service activities can avail of the benefits of the CGTMSE scheme. The scheme covers both new and existing enterprises, including those in the retail trade, agriculture, and allied activities.
According to a notification issued by the Indian government on March 31, 2023, there have been substantial changes made to the (CGTMSE) program. The CGS-I scheme’s coverage ceiling has been raised from Rs. 200 lakhs to Rs. 500 lakhs as a result of the notification with reference number CGTMSE/44/293 and circular number 220/2022-23.
The CGS-I scheme provides credit guarantees for micro and small enterprises (MSEs) for the credit facilities extended by eligible Member Lending Institutions (MLIs). The coverage under the CGS-I scheme has been increased from Rs. 200 lakhs to Rs. 500 lakhs per borrower
The revised modifications will be applicable for all guarantees approved on or after April 01, 2023, including enhancement in the working capital of existing covered accounts. All other terms and conditions of the scheme shall remain unchanged.
The increase in the ceiling of coverage under the CGS-I scheme is a significant development that will benefit micro and small enterprises. It will enable these enterprises to access higher credit facilities without any collateral, thereby promoting entrepreneurship and creating employment opportunities. The CGTMSE scheme has been instrumental in supporting the growth of MSEs in India, and this modification will further strengthen its impact on the economy.
To be eligible for the CGTMSE scheme, the enterprise should have a good track record and creditworthiness. It should also have a viable project report, which is evaluated by the lending institution. The scheme is not available to enterprises engaged in speculative or illegal activities.
The premium for the guarantee covered under the CGTMSE scheme is borne by the borrower, and it varies according to the amount of the loan and the tenure of the loan. The premium rates are lower for women entrepreneurs and for enterprises located in the North-Eastern Region and the hilly states.
In conclusion, the CGTMSE scheme is a significant initiative by the Government of India to support the growth of SMEs in the country. By providing collateral-free credit and guarantee cover, the scheme has made it easier for SMEs to obtain loans from banks and financial institutions. The scheme has contributed significantly to the development of the SME sector and has played a vital role in promoting economic growth and employment generation in the country.
The Organization of the Petroleum Exporting Countries, commonly referred to as OPEC is a group of 13 countries that are major producers of crude oil. These countries are Algeria, Angola, Congo, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, Venezuela, and Gabon.
OPEC was formed in 1960 with the aim of coordinating and unifying the petroleum policies of its member countries to secure fair and stable prices for petroleum producers and ensure a regular supply for consumers. Since then, OPEC has played a significant role in shaping the global oil market.
One of the most powerful tools at OPEC’s disposal is the ability to cut oil production. When OPEC reduces its oil production, it leads to a reduction in the global oil supply. This reduction in supply, in turn, leads to an increase in oil prices, as the market tries to balance the supply and demand equation.
The impact of OPEC’s production cuts worldwide can be seen in several ways:
Oil Prices:
Whenever OPEC reduces output, the amount of oil available globally declines. In turn, this causes the price of oil to rise. The cost of other commodities like petrol, diesel, and heating oil is impacted by rising oil prices. As the price of producing these goods rises as a result of increasing oil prices, their prices may also increase.
Inflation:
Excessive oil prices might cause inflation in other economic sectors as well. Inflation can result when the price of products and services rises due to greater production costs brought on by rising oil prices.
Global Economic Growth:
Higher oil prices can also have a negative impact on global economic growth. When oil prices rise, it increases the cost of transportation and manufacturing, which can reduce economic activity and slow down economic growth.
Stock Market:
OPEC’s production cuts can also impact the stock market. Companies that produce and distribute oil, such as ExxonMobil and Royal Dutch Shell, can see their stock prices rise when oil prices increase due to OPEC’s production cuts.
Currency Market:
When OPEC cuts the supply of oil, it can lead to an increase in oil prices in the global market. Since oil is priced in US dollars, an increase in oil prices can lead to an increase in demand for US dollars. This is because countries that import oil, including the United States, will need to purchase more US dollars to pay for their increased oil imports.
Impact on Indian Currency:
When OPEC cuts the oil supply, it can lead to an increase in oil prices, which can impact the Indian currency against the US dollar. This is because India is one of the largest importers of crude oil, and a rise in oil prices can increase the country’s import bill, leading to an increase in the demand for US dollars. As a result, the value of the Indian currency against the US dollar may decrease when OPEC cuts its oil supply. This can make imports more expensive for India, leading to inflationary pressure on the economy.
What distinguishes OPEC and OPEC+ from one another?
Organizations active in the international oil market include OPEC and OPEC+. But there are some significant variations between the two.
The 13 nations that together make OPEC are the world’s top producers of crude oil.
OPEC+ is a group of oil-producing countries that includes 13 OPEC member countries plus 10 non-OPEC countries, including Russia, Mexico, and Kazakhstan. The formation of OPEC+ was a response to the global oil market’s changing dynamics and the increasing influence of non-OPEC oil-producing countries. The primary objective of OPEC+ is to coordinate oil production levels among its member countries to stabilize oil prices and reduce volatility in the global oil market.
The key difference between OPEC and OPEC+ is that OPEC is composed only of the 13 OPEC member countries, while OPEC+ includes both OPEC member countries and non-OPEC countries. The formation of OPEC+ has allowed OPEC to work more closely with non-OPEC countries to better manage global oil supply and demand dynamics. OPEC+ has also allowed non-OPEC countries to participate in the decision-making process, which has led to a more inclusive and coordinated approach to managing the global oil market.
The Indian government has recently introduced the Foreign Trade Policy 2023-28 (FTP 2023-28) to promote exports and boost economic growth. One of the key highlights of this policy is the introduction of a special one-time Amnesty Scheme to address default on Export Obligations for EPCG and Advance Authorizations.
Export Promotion Capital Goods (EPCG) and Advance Authorizations are schemes that allow Indian exporters to import goods without paying customs duties, provided they fulfill certain export obligations. However, in some cases, exporters may default on their obligations due to various reasons, such as lack of demand, supply chain disruptions, or other business challenges.
The government has implemented a one-time Amnesty Program under the FTP 2023 to address this problem. This program is designed to help exporters who have struggled to fulfill their responsibilities under Advance Authorizations and EPCG and who are suffering from the high customs and interest charges brought on by pending cases.
This plan allows for the regularisation of all open cases of failure to complete the Export Obligation (EO) of the aforementioned authorizations in exchange for the payment of all duties and taxes that were previously exempted in proportion to the outstanding Export Obligation. Under this arrangement, the maximum amount of interest that can be paid is 100% of the exempted duties.
The amount of Added Customs Duty and Special Additional Customs Charge, on the other hand, is exempt from interest payment, which is expected to be a comfort to exporters as their interest costs will be significantly reduced.
The government’s “Vivaad se Vishwaas” campaign, which aimed to resolve tax problems amicably, is consistent with this amnesty program. The government wants to lessen litigation and promote trust-based partnerships to help exporters with their problems by giving defaulting exporters a second chance.
Under this amnesty, it is intended that these exporters will get a second chance and a chance to comply. By increasing exports and lowering the amount of outstanding litigation, this strategy will not only help the defaulting exporters but also the broader economy.
To boost the export industry and encourage ease of doing business, the Indian government’s one-time Amnesty Program for Export Obligations under FTP 2023 is a commendable effort. Defaulting exporters can benefit from this program to resolve their outstanding problems and reopen their businesses without having to pay exorbitant duty and interest fees.
