CEAI writes to union ministry of finance to avoid transactions through u.s. banking system for foreign currency transactions within india
The Consulting Engineers Association of India (CEAI) an apex body of consulting engineers in the country in a letter has urged the Union Ministry of Finance to intervene and ensure that the foreign currency transactions within the country be not routed through the United States (US) banking system in order to avoid transaction fee.
“Currently transaction fee is levied on US Dollars transactions within the Country. As you are aware, while transacting in US Dollars or UK Pounds or Japanese Yen between any two countries, the payment is routed through the corresponding Banking system and a transaction fee is paid“ said Mr K K Kapila, Chairman, Business and Policy Committee, CEAI.
“The transactions in US Dollars payments within India, 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. 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 Mr Kapila.
“Is it not a peculiar scenario that 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.