Issue of Drafts in foreign currency

As the customer profile changes so does the services offered by banks. Today banks see customers that a younger in age, better read and demand a various set of services than before. That’s why banks are constantly re inventing themselves and providing varied services. These services may include net and phone banking, personalized portfolio management, quick loans as well as forex services.

This service provided by the bank deals with foreign exchange. Like the name suggests, here banks exchange rupees for the desired currency at current market rates. The rate usually flashed on an electronic board somewhere close to the teller window. You will see two columns against the currency. One will display the rate at which the banks buys currency from their clients and one column will display the rate at which the sell to their clients. Quite obviously the bank will sell at a marginally higher price than the buying rate.

On the whole the currency exchange rates offered by banks are slightly lesser than other forex exchange agents. When exchanging money in the bank you need proof of identification and have to fill up a simple form. The procedure is pretty fast and also depends on the availability of currency notes. You can exchange rupees for the US Dollar, EURO, Pound, YEN, Dirham, Thai Bhatt etc. The US Dollar is the most widely accepted currency all over the world and it is always advisable to exchange your money to dollars while travelling. This way you are assured a good exchange rate when you sell the remaining currency. Other forex services offered by banks include travellers’ cheques always as travel debit cards. Travellers’ cheques are pre –printed monetary instruments of a preset value. They are usually available in stacks of fives, tens and hundreds.

Travellers’ cheques reduce the risk of carrying high value currency notes around and makes travel a lot safer. Since it needs to be signed and countersigned in front of the acceptor, it is difficult to en cash them if stolen! You can also avail of special debit cards specially issued by banks for foreign travel. You can withdraw money and swipe it at hotels, restaurants and shops anywhere in the world. Banks also issue drafts in foreign exchange as a part of their forex services & trade services. This service is extremely helpful when you want to send money to friends and relative abroad, pay tuition fees to international universities, payment towards GRE and TOFEL etc.

The RBI has set certain limits and guidelines for foreign exchange. The limit differs according to purpose. Foreign exchange Drafts are issued in currencies such as United States Dollars (USD), Great Britain Pounds (GBP), EURO, Japanese Yen (JPY), Australian Dollars (AUD), Canadian dollars (CAD), New Zealand Dollars (NZD), Hong Kong Dollars (HKD), Swiss Francs (CHF) and Singapore Dollars (SGD). They one thing you need to keep in mind is that they will take a bit longer than other drafts.