Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Foreign Exchange Dealers Association of India (FEDAI)
Foreign Exchange Dealers Association of India (FEDAI) is registered under Companies Act 1956, and was
incorporated in the year 1958. The Association has been recognized by Reserve Bank of India, as well as Govt. of
India. The main functions of FEDAI are to lay down uniform rules and guidelines to be observed by all authorized
dealers in India. Some of its functions are:
1) Maintaining a close liaison with RBI and Govt. of India.
2) Maintaining a liaison with International Chamber of Commerce and other world bodies related to foreign trade
and business.
3) To circulate various policies matters and decisions related to foreign exchange business amongst the members.
4) Represents Indian foreign exchange dealers on policy matters related to foreign exchange dealings.
5) Maintaining of FEDAI rules regarding Transit period, Crystallization, Forward covers etc., that govern all the
6) Other functions include approving Foreign Exchange brokers.
1) All cancellations shall be at bank's opposite TT rates, TT selling rate for purchase contract and TT buying rate
for sale contract.-
2) In the event of delay in payment of Interbank foreign currency funds, interest at 2% above the prime rate of
the currency of the specified banks shall be paid by the seller bank.
3) In event of delay in payment of rupee settlement funds, interest for delayed period at 2% above NSE MIBOR
ruling on each day.
4) FEDAI, also prescribes code of conduct for Forex dealers, as also guidelines with regard to dealings with Forex

HOURS OF BUSINESS: Left at the discretion of the banks now. Extended business hours for dealers, if any,
should be approved by respective management.
RATES: ADs will quote exchange rates in direct terms. All currencies to be quoted as — per unit of foreign
currency = INR, while JPY to be quoted as 100 units of JPY = INR.
EXPORT BILLS FOR COLLECTION: In the event of ADs delay of payment to the exporter, they will pay interest
from date of realization to the date of actual payment. ADs may utilize 1 to 3 claim to release payment depending
upon the distance/location of branch where payment has to be remitted.
CRYSTALLIZATION: Unpaid Export bills should be crystallized at TT selling rate. Earlier FEDAI rule made it
mandatory to crystallize unpaid demand bills 30 days after the transit period and Usance bills, 30 days after the
due date. However FEDAI has given the authorized dealers the freedom to decide-on the period for crystallization
which may be linked to risk factors like credit perception of different types of exporter clients, operational aspects
etc. In case the bills are realized after crystallization, TT Buying rate is to be applied.
IMPORTS: Unpaid foreign currency bills drawn under L/C will be crystallized on le day from due date at Bills
Selling Rates or Contracted rates.
INWARD REMITTANCES: All foreign currency inward remittances equivalent to Rs. one lac should immediately
be converted in Indian rupees. Inward remittance for more than Rs. one lac may be converted at the request of
the customer but within the ) permissible period. If the payment of inward remittance is delayed, ADs will pay
interest @ 2% over the applicable to SB accounts after a period of 10 days, for remittances up to Rs one lac and
for 3 days after remittance for more than Rs one lac.
Excellent explanation.Thank you very much.
Excellent explanation.Thank you very much.

Users browsing this thread: 1 Guest(s)