MUMBAI: Individuals and small businesses who need
foreign currency
for travelling abroad will soon get to buy it at rates closer to the
interbank rate
through a new online platform. Currently, buyers of small lots of currency pay a mark-up of anywhere between 1% and 3%, depending on where they purchase it from.
The
RBI has said that the
Clearing Corporation of India
has developed a new platform, which is being tested. The platform will be available for users by early August.
In 2017, the RBI had first proposed a foreign exchange trading portal for retail participants that would provide customers with access to an online electronic trading platform on which they can purchase/sell foreign currency at market-clearing prices.
“By unifying the existing fragmented market microstructure, this platform would provide transparency of pricing and promote competition among market-makers leading to better pricing for all customers, regardless of order size,” the RBI said in a statement.
“The average foreign currency purchase by individuals is less than $1,000. Specialised foreign exchange dealers like us provide value-added, personalised services,” said Hariprasad M P of CentrumDirect.
Bankers say that price-conscious customers, who turn to the unorganised market, might shift to the online platform to get a better deal. The Foreign Exchange Dealers Association has informed members that the customer registration process for the new platform will go live on July 1.According to dealers, the currency that will be sold through the new online exchange will be the notes that banks receive from returning passengers and non-residents who choose to sell dollars to their banks in India.
Currently, banks consolidate their
forex
currency collections from various branches and accumulate it at a nodal branch and sell to the highest bidder among foreign currency dealers. However, it is not clear how will the platform ensure that there is enough currency at all times.