Forex Digest Dec2010.pdf

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Academy of Excellence Inventing Methods for Igniting MindsAn initiative of Staff College under the aegis of

Wholesale Banking Department (Domestic Foreign Business), BCC, Mumbai

FOREX DIGEST Monthly, Issue No. VI, December ‘2010

)))‘2010‘2010)

JULY 2007 Merry Christmas &Happy New Year

RBI increases the Repo Rate by 25 bpsto 6.25 percent and Reverse RepoRate by 25 bps to 5.25 percent witheffect from 02 Nov. „2010

SLR 24.00 percent w.e.f 18th Dec. ‟10and CRR 6.00 percent w.e.f 24th Apr. ‟10

Bank Rate kept unchanged at 6 percent

GDP growth for 2010-2011 projectedat 8 percent

Bank‟s BPLR 13.25 percent w.e.f 13 Dec. „2010

Bank‟s Base Rate revised to 9 percentw.e.f 13 Dec. „2010

INCOTERMS 2010 comes into effectfrom 1st January, „2011

INCOTERMS 2010 will take effect on Januar1st, 2011.

In comparison to the previous Four Groups viE, F, C & D, INCOTERMS will now be separateinto 2 Groups those applicable to all modes otransport and those only applicable to sea aninland waterway transport.

In all there will be in all a total of 1INCOTERMS instead of earlier one having 13with 2 new additions, DAP and DAT and deletions viz. DAF, DDU, DEQ and DES.

Applicable for all modes of transport:

EXW : ex worksFCA : free carrierCPT : carriage paid toCIP : carriage and insurance paid toDAT : delivered at terminal – NEW!DAP : delivered at place – NEW!DDP : delivered duty paid

Only applicable for sea and inlandwaterway transport:

FAS : free alongside ship

FOB : free on boardCFR : cost and freightCIF : cost, insurance and freight

When INCOTERMS 2010 AppliesExisting sales contracts: INCOTERMS2000 will continue to apply, even performance of the contract will be madein 2011.

Sales contracts entered into betweenSeptember and December 2010: Either the 2000 or 2010 versions can beused. The version the parties agree tutilize, however, should be expresslystated in the sales contract.

Sales contracts drafted after January1, 2011: Any reference to “INCOTERMS”will be assumed to mean INCOTERMS2010.

IMPORTANT FINANCIAL

INDICATORS






)))‘2010‘2010)

JULY 2007

Our Specialized Integrated Treasury Branch

(SITB) has shifted to the new premises situatedon 4th and 5th Floors of Baroda Sun Tower, C-34,G Block, Bandra Kurla Complex, Mumbai – 400051 from 20th Dec. „2010.

(BCC:BR/102/347 dt. 16th Dec. „2010)

Revision of Service Charges

Our Bank has revised the service charges and

fees for various services provided by our Bankbased on the comparative study of ServiceCharges in various areas of operation prevalentin other peer banks, charges and fees.

The revised service charges have beenannounced vide Circular No. HO:BR:102:208dt. 16.12.2010 and would be effective from15.01.2011.

Section XI states the various Service Chargesfor authorized branches for rendering Forex

related Services. Further, the Zonal Head ispermitted to extend further concession of 25%on the rates prescribed, subject to the merits of the case.

The revised service charges are simple,competitive. All Branches are advised to use thisas an USP for canvassing further Business.

Use of International Debit Cards / Storevalue Cards / Charge Cards / SmartCards by resident Indians while on a visitoutside India

AD Banks are required to submit astatement as on December 31, each year in

case the aggregate forex utilization by theInternational Debit Card holders exceedUSD 100,000 in a calendar year.

NEWS YOU CAN USE Now, all the banks authorized to deal iForeign Exchange are advised tdiscontinue the submissions of thaforementioned statements from th

calendar year 2010 onwards.

(A.P. DIR Series Circular No. 29 d t.December 22, 2010)

KYC norms / AML standards / Combatingthe Financing of Terrorism / Obligationof APs under Prevention of MoneyLaundering Act, (PMLA), 2002 aamended by Prevention of MoneyLaundering (Amendment) Act, 2009

Cross Border Inward Remittance undeMoney Transfer Service Scheme (MTSS)

With a view to prevent the system ocross border inward money transfer intIndia from all over the world under thMTSS from being used, intentionally ounintentionally, by criminal elements fo

money laundering or terrorist financinactivities, it is clarified that whenevethere is suspicion of money laundering o

terrorist financing or when other factorgive rise to a belief that the customedoes not, in fact, pose a low risk, AP(Indian Agents) should carry out fuscale customer due diligence (CDDbefore making payment of anremittance.

These guidelines would also bapplicable mutatis mutandis to aSubagents of the Indian Agents undeMTSS and will be the sole responsibilitof the APs (Indian Agents) to ensure thatheir Subagents also adhere to thesguidelines.

(A.P.DIR Series Circular No. 19 and A.P(FL Series) Circular No. 02 dt. 25th Nov

„2010)






)))‘2010‘2010)

JULY 2007 Some useful Terminologies

Automated Forex Trading:A method of trading foreign currencies with acomputer program that is based on a set of analyses that helps determine whether to buy orsell a currency pair at any one time. Automatedforex trading uses a computer program that thetrader "teaches" to make decisions based on aset of signals derived from technical analysischarting tools. The signals create a buy or selldecision when they point in the same direction.

Base Currency:The first currency quoted in a currency pair onforex. It is also typically considered thedomestic currency or accounting currency. For

accounting purposes, a firm may use the basecurrency to represent all profits and losses.

Big Figure:The stem, or whole dollar price, of a quote,often used in reference to foreign currencies ormoney markets. For example, if a foreigncurrency was trading at 108.3457 and a moneymarket security was trading at 108.6666, bothwould have big figures of 108. Traders will oftennot mention the big figure when quoting asecurity, assuming that other traders know this

number. In the U.S., the big figure is oftenreferred to as the handle.

Bank For International Settlements:An international organization fostering thecooperation of central banks and internationalmonetary policy makers. Established in 1930, itis the oldest international financial organization,and was created to administer the transaction of monies according to the Treaty of Versailles. Among others, its main goals are topromote information sharing and to be a key

center for economic research.

Soft Currency:A currency with a value that fluctuates as aresult of the country's political or economicuncertainty. As a result of the of thiscurrency's instability, foreign exchangedealers tend to avoid it. It is also known as a"weak currency".

Correspondent Bank:A financial institution that provides services obehalf of another, equal or unequal, financiinstitution. It can conduct busines

transactions, accept deposits and gathedocuments on behalf of the other financiinstitution. They are more likely to be used tconduct business in foreign countries, and aas a domestic bank's agent abroad.

Currency Basket: A selected group of currencies in whicthe weighted average is used as a measure othe value or the amount of an obligation. currency basket functions as a benchmark foregional currency movements - its compositioand weighting depends on its purpose.

Exotic Currency: A foreign exchange term for a thinly tradecurrency. Exotic currencies are illiquid, lacmarket depth and trade at low volumeTrading an exotic currency can be expensiveas the bid-ask spread is usually large.

Forex Mini Account:A type of brokerage account that is used b

beginner traders looking to enter the foreigexchange market. This account allows thinvestor to take a smaller position in a currencthan if they were to trade the standard lotused by those with a regular accounGenerally, a mini account allows the trader ttrade contract sizes of 10,000 units rather thathe standard 100,000.

Leads and Lags: The alteration of normal payment or receipts a FEX transaction because of an expecte

change in exchange rates. An expecteincrease in exchange rates is likely to speed upayments, while an expected decrease exchange rates will probably slow them down.

Mine and Yours:Terms used by floor traders to signify buyingand selling. Mainly used in forex transactions.






)))‘2010‘2010)

JULY 2007 Launching of “Rupee Linked ForeignCurrency Deposit” (RLFCD) Scheme

The “Rupee Linked Foreign Currency Deposit” (RLFCD) Scheme is launched looking to the

opportunity in the prevalent forward exchangemarket and with a view to maximize the returnsto NRI thereby to augment business for thebank. This scheme is in effect from 10th Dec.,

2010. Identified Branches are the Category “B” Branches in India. “C” Category Branches tocontact “B” Category Branches for placement /transaction.

• Request / undertaking to be obtained from theNRI customer as per format in Annexure-I of Circular

• Debit NRE (INR) account, and report to SITBMumbai for conversion of INR in any of thedenominated foreign currencies e.g. USD, GBP,EUR, Japanese Yen, AUD and CAD as percustomer preference. Minimum USD 10,000 orits equivalent

• Converted foreign currency as above or freshremittance in foreign currency received fromNRI customer shall be placed under new depositScheme code TD 808 for a period of 12 months.The rate of interest payable on such depositshall be as applicable under our existing FCNRscheme for 12 months

• Book a forward contract with SITB forconverting of principal foreign currency amountin INR for delivery on maturity date of thedeposit

• Report to SITB the interest amount accruedand due in foreign currency on the deposit as aseparate transaction on due date of deposit forconversion in INR at spot rate

• Credit the maturity proceeds of the deposit(comprising principal amount plus interestearned) in INR in NRE saving account of thedepositor on due date. Deposit receipt is to beissued on the usual FCNR security paper and tobe inscribed as “Issued under RLFCD”

(BCC:BR:102:337 dt. 6th Dec. 2010)

Launching of Special Campaign: NRSavings Bank / Term Deposit & FCN

Deposit for NRIs/PIOs

Our Bank is to participate in the three da

event “Bhartiya Parvasi Divas” to be held aPargati Maidan, New Delhi from 07/01/2011 t09/01/2011. Simultaneously, Bank halaunched a Special NRE Savings Bank Deposit FCNR Deposit Campaign during the period from24/12/2010 to 31/12/2010 with a deposgrowth targeted at 27% in NRE depossegment. With this, Bank proposes to canvasnew 7000 NRE Accounts and a deposit target o

755 Crores during the Campaign period.

Unique Selling Points:

• Our Large Intl. presence to facilitate smootbanking to NRIs whilst their stay abroad.• All Braches in India & abroad are CBenabled.• Fast & convenient remittance facility – Rapfunds 2 India. Instant credit to Beneficiaraccount if both remitter & beneficiary havinaccount with our Bank. In other caseBeneficiary receiving remittance within 4hours from the instructions received from thremitter through NEFT / RTGS.

• NRI may choose to remit from his desk thrRemit Xpress from USA, UK & Europe.• Free remittance from cross border if thremitter & beneficiary maintain account witour Bank.• Free Baroda Connect facility to view antransact in the account even when NRI stationed abroad.• Free International Debit Card.• Large ATM net work in India and facility tdraw from VISA enabled ATMs of other bankin India & abroad.• Facility to obtain Home loan and Loan againdeposit, Loan against property to RIs/PIOfrom branches across India.

(BCC:BR:102:343 dt. 14th Dec. 2010

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Forex Digest Dec2010.pdf