Allow foreign currency transactions via RBI

New Delhi: Consultants and service providers in the country have urged the government to stop routing domestic foreign currency deals via the US banking system, in order to avoid transaction fees and save foreign currency.

Rather such domestic deals involving foreign currencies such as the US dollar should be routed through the Reserve Bank of India. At present a transaction fee is levied on US dollars transactions within the country. For example, a payment in US dollars from Delhi to even nearby Faridabad 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," ambassador for Asia-Pacific region for the International Federation of Consulting Engineers K K Kapila said in a statement.

Kapila pointed out that a small country like the Philippines does not route its internal foreign exchange transactions through the United States. "If the Philippines can do it, why not India? " he said, adding "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."