Consulting Engineers Association of India (CEAI) has sought attention of the Governor, Reserve Bank of India and urged him to intervene and ensure that the foreign currency transactions within the country be not routed through the US banking system in order to avoid transaction fees and save foreign currency.
“Currently the transaction fee is levied on US Dollars transactions within the country. Say a payment in US$ from Delhi to Hyderabad from one entity to the other in the current dispensation is required to be undertaken through the US banking system. This should be undertaken directly through the Reserve Bank of India and there should be no requirement of routing them through the American Banking system.
“By routing the transactions through the American Banking system, the country is losing substantial money, which is going to the Americans towards transaction costs,” said K.K. Kapila, former president, Consulting Engineers Association of India (CEAI)
“It is a peculiar scenario that for foreign currency transactions within the country one of the Banks from India sends dollars to the US to get them back in another Bank in India? To my mind, as long as we are transacting in US Dollars within India, there should be no transaction cost payable to the US,” he added.
“This needs an urgent correction, lest we continue to lose every single day. If it is part of some Trade Agreement, it needs an urgent relook. Let this be addressed on top priority,” he said.
“RBI should bring in this correction immediately lest the country will continue to lose valuable foreign exchange. It is fully understood that the US transactions to countries other than India have to continue via the US but RBI should not continue to have internal transactions within the country via the US. If any amendment to existing agreements signed between the two nations are required, the Indian government should take it up logically and get this agreement revised showing them the merits of moving dollars within our country from one branch to another should not be required to be routed through the US,” he added.