A Research Report on “Foreign Exchange Operations”

At

DCB BANK

Submitted in partial fulfillment of degree of

MASTER OF BUSINESS ADMINISTRATION 2nd Year 2019 Examination

JAI NARAYAN VYAS UNIVERSITY, JODHPUR

Report Submitted to Submitted by

Prof.Shishupal Bhadu Ambiya Jagirdar

Head of Department MBA FS 4thSem.

Training Supervised By

Name: SHAFI MOHAMMAD

Designation: BRANCH MANAGER (DCB BANK)

Session 2018-19

Department of Management Studies

Opp.Senapati Bhawan Residency Road ,

Jodhpur-342011

Email dmsjodhpur@gmail.com
Acknowledgement

While submitting the research report on “The study on Banking

Services”at DCB bank ltd. I avail this opportunity to express my
gratitude towards all those who guided and helped me to finish this
project successfully.
I am grateful to Mr Shafi Mohammad, Branch Head (DCB BANK,
Jodhpur) for his inspiring guidance and kind encouragement.
I express my deep sense of gratitude and heart full thanks to Miss
Kalpana Choudhary ( Region Head FOREX Department) and all Staff for
those valuable guidance and encouragement, which has played a major
role in completion of this Project work. Her esteem suggestion and
encouragement from time to time has always helped me in the
completion of this project.

I express my sincere thanks to Dr Shishupal Bhadu for his generosity

and readiness to support.
I am thankful to my teaching staff for their valuable guidance and
encouragement in the completion of this project

I have the good fortune of having a very understanding & loving family.

Ambiya Jagirdar

MBA 4th Sem.

Declaration

I Ambiya Jagirdar student of MBA, Department OF MANAGEMENT

STUDIES, JNVU JODHPUR. Hereby declare that this research report
entitled “The study of Foreign exchange operations” At DCB BANK
submitted is my original work.
The finding of the report are based on the information collected by me
during the study and the result embodied in this study has not been
submitted to any other university for the award of degree.

Ambiya Jagirdar

PLACE: JODHPUR

DATE:
CONTENT

 INTRODUCTION
 INDUSTRY /COMPANY OVERVIEW
 REVIEW OF LITERATURE /THEROTICAL
BACKGROUND
 OBJECTIVES OF THE STUDY
 RESEARCH METHODOLOGY
 DATA ANALYSIS
 CONCLUSION
 LIMITATION OF THE PROJECT
 RECOMMENDATIONS
Executive Summary

The project titled “The study of Foreign Exchange Operations” at

DCB Bank ltd. is aimed to analyze the different types of services offered
by foreign exchange department of the bank. The foreign exchange
department of bank has various segments viz. L/C, Bank Guarantee,
Remittancesetc. The project has been started with the brief
understanding of different products / programmes available with the
bank/financial institution . Foreign exchange activities is a major part of
the project. Forex activities includes how DCB Bank ltd. operates their
Foreign Exchange operation in their day to day.
The objective of the study was to learn the basic procedures and
documentation required for the above mentioned services. For all these
banking services DCB bank uses Finacle Software designed by
INFOSYS.

This research is based on primary as well secondary data, however

primary data collection was given more importance. Research has been
done by primary data collection, and primary data has been collected by
interacting with executives and relationship managers, and it was
constructed in a manner of getting maximum information from the
executive.
Secondary data has been collected from company annual report and
database. The study was conducted based on questionnaires to collect
the necessary data: question were asked and the necessary information
was filled on the basis of the respondent answer. The questionnaires are
in the structured form, the research study was done with the structured
personal interview.
COMPANY PROFILE

DCB Bank Limited is a private sector scheduled commercial bank in

India. It has a network of 331 branches and around 505 ATMs in the
country. It offers products to individuals, small and medium businesses,
rural banking and mid corporates across the branch network.
The Aga Khan Fund for Economic Development (AKFED) is the
promoter of the Bank with around 15% stake. Public shareholding under
the Resident Individual category is approximately 39.4%. The Bank
received the Scheduled Commercial Bank licence from the Reserve
Bank of India on 31 May 1995.

Business

Personal Banking– Under this segment, it offers banking products and

services offerings saving accounts, deposit scheme, current accounts,
personal loans, housing loans, phone banking facility, Go - instant
mobile banking, SMS banking, telephone banking. mutual funds, Demat
account, life and general insurance etc.

Corporates banking– In this, it caters products and services from large

corporates to small and medium enterprises. It provides working capital
loans, export and import loans, foreign currency loans, term finance,
project finance and many other products.

NRI Banking–It also caters its products and services to NRI client such
as remittances services, western union money transfer, loans against
term deposit, currency exchange etc. , DCB NRI Customers can open a
DCB NRI Account from anywhere in the world. A prospective customer
only needs to log on the Bank's website, access the NRI open an
account section and simply fill and submit online. The Bank's NRI
Customer Service team available 24 Hours all through the year then
reaches out to the customer to complete the account opening process.
HISTORY OF Development Credit Bank(DCB)

DCB Bank has over the past two years doubled the branch network
presence to 331 branches (as on 31 March 2019) from 160 branches in
2015. This relatively recent growth spurt has been instrumental in driving
business growth as well visibility. The Bank has come a long way from
humble beginnings in the 1930s, in Mumbai from a series of Co-
operative bank mergers with the Ismailia Co-operative Bank Limited and
the Masalawala Co-operative Bank respectively.
These 2 banks later merged to form Development Co-operative Bank,
that changed to Development Credit Bank after it was granted the
scheduled bank license by the Reserve Bank of India in May 1995.
Development Credit Bank Ltd. went on to successfully offer shares to the
public by an Initial Public Offering (IPO) in 2006. DCB Bank Limited is
the new name of the Bank, changed with due regulatory approval in
January 2014.

Presence

The Bank is present in 19 States and 3 Union Territories.

Cities having DCB Bank branches are:-
Agra, Ahmedabad, Ambala Cantt, Aurangabad, Bengaluru, Bhopal,
Bhubaneswar, Chandigarh, Chennai, Coimbatore, Dehra Dun, Delhi
NCR, Gandhinagar, Gurugram, Hyderabad, Indore, Dewas, Jabalpur,
Jaipur, Jalandhar, Jodhpur, Kanpur, Kochi, Kolkata, Lucknow, Ludhiana,
Mumbai, Meerut, NOIDA, Panjim, Patna, Pune, Surat, Trichy, Udaipur,
Vadodara, Vishakhapatnam.

DCB Bank is also focussed in expanding in tier 3 to tier 6 towns in

Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Karnataka, Madhya
Pradesh, Maharashtra, Odisha and Telangana.
 States where DCB Bank branches are located:
Andhra Pradesh, Bihar, Chhattisgarh, Delhi NCR, Gujarat, Goa,
Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha,
Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand
and West Bengal.

ORGANIZATION STRUCTURE

S.NO. SECTOR PRODUCTS

1. GENERAL BANKING CASA products

2. NRI BANKING NRE,NRO ,FCNR

3. LOANS AND ADVANCES Mortgage,SME,Agriculture etc.

4. TREASURY AND CORRESPONDING BANKING REMITTANCE ,L/C ,BG etc.

VISION AND MISSION OF ORGANIZATION

VISION
The Bank’s vision is to be the most innovative and responsive
neighborhood bank in India serving entrepreneurs, individuals and
businesses. In line with our vision, we began implementing a new
strategy in FY 2010, which has now completed 9 years. The Bank
continues to make steady progress and improvements are clearly visible
in all areas of its business. In order to accelerate the business
momentum further, in October 2015, the Bank announced its plan to
increase its network by 150 more branches in 24 months. This plan was
successfully completed by October 2017 and the total number of
branches as on March 31, 2019 stood at 333. In the next 2 to 3 years the
Bank is likely to open around 15 to 20 branches per year.

MISSION

DCB Bank aims to be the preferred financial services provider amongst

the Bank's peers with a passion for excellence in service.

Awards
DCB Bank continued to be recognized for its progress and initiatives in
various functions.

Corporate Social Responsibility (CSR)

1) CSR Summit & Awards of UBS Forum, BFSI Category - DCB Bank
was awarded for the project ‘Participatory Natural Resource
Management along Watershed Lines in the Tribal Belt of South
Rajasthan’.
2) Bombay Chamber Good Corporate Citizen Awards 2018 – Winner
under Banking & Finance Companies category.
3) Asian Customer Engagement & Forum - ACEF Leadership Awards
2018, Excellence in CSR, Social Impact Awards - DCB Bank garnered
Bronze for Best Environmental Behaviour Change Award - Project :
Participatory Natural Resource Management along watershed lines in
the Tribal Belt of South Rajasthan.

Human Resources

1) Asian Customer Engagement & Forum - ACEF HR & CSR Forum &
Awards - Gold for Best in-house publication in the “Engagement and
Communications” category.

2) Asian Customer Engagement & Forum - ACEF HR & CSR Forum &
Awards - Silver for Best Employee Engagement Scheme in the
“Organisational Awards” category. 3) DCB Bank continues to be Great
Place to Work-Certified. This year DCB Bank Ltd has been recognized
among India’s 20 Best Workplaces in BFSI - 2019.
ORGANIZATION STRUCTURE

HUMAN
RESOURCE

COLLECTION MARKETING

ADMINISTRATION DEPARTMENTS PRODUCT

CREDIT
OPERATION
TEAM

SALES
ORGANIZATION CHART OF DCB BANK

NAME DESIGNATION

Naseer Munjee Chairman

Murali M Natrajan MD & CEO

Bharat Sampat CFO & President

Shridhar Seshadri Executive Vice President

Amin Manekia Director

Ashok Bharat Director

Iqbal Khan Director

Jamal Pradhan Director

Shafiq Dharamshi Director

Rupa Devi Singh Director

Action Plan

 Understanding day to day operations in Forex

department.
 Learning the process and documentation needed for
the purpose of the Foreign Exchange Transaction.
 Getting questionare filled by the executives to
understand what problems they faced in day to day
operations of foreign exchange.
 Getting questionnaire filled by the customers to
understand the satisfaction of the services received
by them
Review Theoritical Literature
What is Foreign Exchange?
The process of converting the foreign currency into INR received against
the exports and converting INR into foreign currency against imports.

The banks acts as a intermediary between the Buyer and Seller for the
export-import of goods ,services and invisibles across countries.

Commercial Banks are the major players in the market. They buy and
sell currencies for their clients. They may also operate on their own.

The banks involved in the foreign exchange for their clients maintains
three types of current account:

 NOSTRO:
 VOSTRO
 LORO

Nostro: A bank’s foreign currency account maintained by in the foreign

country and in the home currency of that country is known as NOSTRO
Account or “ Our account with you”

Vostro: Vostro account is the local currency account maintained by

foreign bank. It is
also known as “ your with us.”

Loro: It is a account wherein a bank remits fund in foreign currency to

another bank for credit to an account of a third bank.

In India, banks may deal directly or through recognized exchange

brokers. Accredited exchange brokers are permitted to contract
exchange business on behalf of authorized dealers in foreign exchange
only upon the understanding that they will conform to the rates, rules and
conditions laid down by the FEDAI. All contracts must bear the clause
―subject to the Rules and Regulations of the Foreign Exchanges
Dealers Association of India‘.
In India, authorized dealers have recourse to Reserve Bank to sell/buy
US dollars to the extent the latter is prepared to transact in the currency
at the given point of time. Reserve Bank will not ordinarily buy/sell any
other currency from/to authorized dealers. The contract can be entered
into on any working day of the dealing room of Reserve Bank. No
transaction is entered into on Saturdays. The value date for spot as well
as forward delivery should be in conformity with the national and
international practice in this regard. Reserve Bank of India does not
enter into the market in the ordinary course, where the exchages rates
are moving in a detrimental way due to speculative forces, the Reserve
Bank may intervene in the market either directly or through the State
Bank of India.

Settlement of Transactions

Banks use the exclusive network SWIFT to communicate messages and

settle the transactions at electronic clearing houses such as CHIPS at
New York.

SWIFT: SWIFT is a acronym for Society for Worldwide Interbank

Financial Telecommunications, a co operative society owned by about
250 banks in Europe and North America and registered as a co
operative society in Brussels, Belgium. It is a communications network
for international financial market transactions linking effectively more
than 25,000 financial institutions throughout the world who have been
allotted bank identified codes. The messages are transmitted from
country to country via central interconnected operating centers located in
Brussels, Amsterdam and Culpeper, Virginia. The member countries are
connected to the centre through regional processors in each country.
The local banks in each country reach the regional processors through
the national net works.

The SWIFT System enables the member banks to transact among

themselves quickly (i) international payments (ii) Statements (iii) other
messages connected with international banking. Transmission of
messages takes place within seconds, and therefore this method is
economical as well as time saving. Selected banks in India have become
members of SWIFT. The regional processing centre is situated in
Mumbai.

CHIPS: CHIPS stands for Clearing House Interbank Payment System. It

is an electronic payment system owned by 12 private commercial banks
constituting the New York Clearing House Association. A CHIP began its
operations in 1971 and has grown to be the world‘s largest payment
system. Foreign exchange and Euro dollar transactions are settled
through CHIPS. It provides the mechanism for settlement every day of
payment and receipts of numerous dollar transactions among member
banks at New York, without the need for physical exchange of
cheques/funds for each such transaction.

Foreign Exchange Transactions:

The foreign currency is considered as the commodity in foreign

exchange dealings.

Purchase and Sale transactions

Any trading has two aspects (i) Purchase (ii) sale. A trader has to
purchase goods from his suppliers which he sells to his customers.
Likewise the bank (which is authorized to deal in foreign exchange)
purchases as well as sells its commodity the foreign currency.

When we say a purchase we implied that

(i) the bank has purchased
(ii) it has purchased foreign currency

Similarly, when we sale a sale, we imply that

(i) the bank has sold
(ii) it has sold foreign currency.

In a purchase transaction the bank acquired foreign currency and parts

with home currency.
In a sale transaction the bank parts with foreign currency and acquires
home currency.

Exchange Quotations

We have seen that exchange rates can be quoted in either of the two
ways;

(a)direct quotation (b) indirect quotation.

The quotation in which exchange rate is expressed as the price per unit
of foreign currency in terms of the home currency is known as Home
currency quotation‘ or Direct quotation‘. It may be noted that under
direct quotation the number of units of foreign currency is kept constant
and any change in the exchange rate will be made by changing the
value in term of rupees. For instance, US dollar quoted at Rs.68 may be
quoted at Rs 67 or Rs.69 as may be warranted.

The quotation in which the unit of home currency is kept constant and
the exchange rate is expressed as so many unit of foreign currency is
known as Foreign Currency quotation‘ or Indirect quotation‘ or simply
Currency Quotation‘. Under indirect quotation, any change in exchange
rate will be effected by changing the number of units of foreign currency.

Basis for Merchant Rates

When the bank buys foreign exchange from the customer, it expects to
sell the same in the interbank market at a better rate and thus make a
profit out of the deal. In the interbank market, the bank will accept the
rate as dictated by the market. It can, therefore, sell foreign exchange in
the market at the market buying rate for the currency concerned. Thus
the interbank buying rate forms the basis for quotation of buying rate by
the bank to its customer.

Similarly, when the bank sells foreign exchange to the customer, it

meets tele commitment by purchasing the required foreign exchange
from the interbank market. It can acquire foreign exchange from the
market at the market selling rate. Therefore the interbank selling rate
forms the basis for quotation of selling rate to the customer buy the
bank.

The interbank rate on the basis of which the bank quotes its merchant
rate is known as the base rate.

Exchange Margin

If the bank quotes the base rate to the customer, it makes no profit. On
the other hand, there are administrative costs involved. Further the deal
with the customer takes p-lace first. Only after acquiring or selling the
foreign exchange from to the customer, the bank goes to the interbank
market to sell or acquire the foreign exchange required to cover the deal
with the customer. An hour or two might have lapsed by this time. The
exchange rates are fluctuating constantly and by the time the deal with
the market is concluded, the exchange rate might have turned adverse
to the bank. Therefore sufficient margin should be built into the rate to
cover the administrative cost, cover the exchange fluctuation and
provide some profit on the transaction to the bank. This is done by
loading exchange margin to the base rate. The quantum of margin that is
built into the rate is determined by the bank concerned, keeping with the
market trend.

FEDAI has standardized the exchange margin to be charged by the

banks and the banks are free to load margins within the range. The
FEDAI fixed margins are:

1. TT Purchase rate 0.025% to 0.080%

2. Bills Purchase rate 0.125% to 0.150%
3. TT Selling rate 0.125% to 0.150%
4. Bills selling rate 0.175% to 0.200%
(Over TT selling rate)
Principal types of Buying Rates

In a purchase transaction the bank acquires foreign exchange from the

customer and pays him in Indian rupees. Some of the purchase
transactions result in the bank acquiring foreign exchange immediately,
while some involve delay in the acquisition of foreign exchange. For
instance, if the bank pays a demand drawn on it by its correspondent
bank, there is no delay because the foreign corresponded bank would
already have credited the nostro account of the paying bank while
issuing the demand draft. On the other hand, if the bank purchases on
On demand bill from the customer, it has first to be sent to the draws
place for collection. The bill will be sent to the correspondent bank for
collection. The correspondent bank will present the bill to the drawee.

Depending upon the tine of realization of foreign exchange by the bank,

two types of buying rates are quoted in India. They are

(i) TT Buying Rate

(ii) Bill Buying Rate

(i)TT Buying Rate (TT stands for Telegraphic Transfer)

This is the rate applied when the transaction does not involve any delay
in realization of the foreign exchange by the bank. In other words, the
nostro account of the bank would already have been credited. The rate
is calculated by deducting from the interbank buying rate the exchange
margin as determined by the bank. Though the name implies telegraphic
transfer, it is not necessary that the proceeds of the transaction are
received by telegram. Any transaction where no delay is involved in the
bank acquiring the foreign exchange will be done at the TT rate.
Transaction where TT rate is applied is;

1. Payment of demand drafts, mail transfers, telegraphic transfers, etc

drawn on the bank where banks nostro account is already credited

2. Foreign bills collected. When a foreign bill is taken for collection, the
bank pays the exporter only when the importer pays for the bill and the
banks nostro account abroad is credited.
3. Cancellation of foreign exchange sold earlier. For instance, the
purchaser of a bank draft drawn on New York may later request the bank
to cancel the draft and refund the money to him. In such case, the bank
will apply the TT buying rate to determine the rupee amount payable to
the customer.

The method of calculating TT buying rate for foreign exchange to be

purchased for US dollars is given below.

TT Buying Rate

Dollar / Rupee market spot buying rate = Rs. ……………

Less: Exchange margin -- Rs. ………………
TT Buying rate = Rs. ………………..

Rounded off to nearest multiple of 0.0025.

(ii)Bill Buying Rate

This is the rate to be applied when a foreign bill is purchased. When a

bill is purchased, the rupee equivalent of the bill value is paid to the
exporter immediately.

However, the proceeds will be realized by the bank after the bill is
presented to the drawee at the overseas centre. In case of a usance bill,
the proceeds will be realized on the due date of the bill which includes
the transit period and the usance period of the bill.
The method of calculating bill buying rate is as follows:

Bill Buying Rate

Dollar/Rupee market spot buying rate =Rs………..
Add : Forward premium
(For transit and usance; rounded off to lower month)

OR

Less : Forward discount

(For transit and usance : rounded off to higher month) =Rs……….

Less: Exchange margin - Rs……....

Bill buying rate Rs……….

Rounded off to the nearest multiple of 0.0025

Principle types of selling rates

When a bank sells foreign exchange it receives Indian rupees from the
customer and parts with foreign currency. The sale is affected by issuing
a payment instrument on the correspondent bank with which it maintains
the NOSTRO account. immediately on sale, the bank buys the requisite
foreign exchange from the market and gets its NOSTRO account
credited with the amount so that when the payment instrument issued
buy its is presented to the corresponded bank it can be honored by debit
to the NOSTRO account. However, depending upon the work involved,
viz., whether the sale involves handling of documents by the bank or not,
two types of selling rates are quoted in India, they are

1. TT selling rate
2. Bills selling rate

1. TT Selling Rate

This is the rate to be used for all transactions that do not involve
handling of documents by the bank.

Transactions for which this rate is quoted are:

(1) Issue of demand drafts, mail transfers, telegraphic transfer, etc.,

other than for retirement of an import bill.

(2) Cancellation of foreign exchange purchased earlier. For instance,

when in export bill purchased earlier is returned unpaid on its due date,
the bank will apply the TT selling rate for the transaction.

2. Bills Selling Rate

This rate is to be used for all transactions which involve handling of

document by the bank: for example, payment against import bills. The
bills selling rate is calculated by adding exchange margin to the TT
selling rate. That means the exchange margin enters into the bills selling
rate twice, once on the interbank rate and again on the TT selling rate.
Process and Documentation
I served in the foreign exchange department of the DCB ltd. Bank. The
day to day operations of the forex includes : inward remittance , outward
remittance and bank guarantee. There are three standard payment
method in the export import trade market.1.Clean payment 2. Collection
of bills 3. Letter of credit. Mostly the transactions are of Clean payment,
Advance Payment and Letter of Credit.

Process of Inward Remittance:

Method : Advance Payment

Step 1:

The exporter is required to send his below mentioned details to the

importer so that his money arrive safely in his account. Each bank will
have their own requirements but the exporter can expect to be asked for
the following:

1. Exporters personal details including full name and address

2. Exporters bank name, address and account number

3. The correct SWIFT code of exporters bank

4. The purpose of remittance

5. Correspondent bank detail

Because there are variations in the requirements the exporter is required

to check for the exact information by the bank before you start the
transaction.

Step 2: Remitter request for remittance with its remitting bank.

Step 3: Remitting bank gives instruction to its correspondent VOSTRO
bank to transfer the amount.

Step 4: Remitting bank’s VOSTRO correspondent further request DCB

bank’s NOSTRO correspondent to transfer the remittance amount.

Step 5: DCB bank’s NOSTRO correspondent further credits the amount

to the beneficiary bank i.e. DCB bank.

Step 6: Beneficiary bank (i.e. DCB bank) credits amount to customers

account post stating purpose of remittance.

Inward Remittance for Advance Payment against Exports and Others

Pre Checks

1. Purpose of the remittance received to be confirmed.

Commonly used Purpose Code
P0103 (Advance against export P1006 (Business and
of goods) Management consultancy and
public relation services

P0807 (Advance against export P0012 (Long and medium term

of Software) loan with original maturity of 1
year or more)

P0802 (Software consultancy / P0006 (Foreign Direct

implementation) other than Investment)
those covers in SOFTEX forms

1. Proforma Invoice should be countersigned by exporter.

2. DCB Bank does not handle any transaction involving any
counterparties / countries /shipping lines /ship flags /ports /shore
listed under OFAC/UN sanctions list.
3. Advance remittance received towards exports Import Export
Code (IEC) allotted by DGFT is mandatory.
4. Inward Remittance received towards software exports, exporter
to be registered party in STPI.

5. Inward Remittance received in advance towards Merchant Trade

before import payment, the fund would be earmarked for Outward
Payment of import leg.

6. Inward Remittance received towards FDI, the remittance will be

settled upon receiving of KYC form foreign bank via SWIFT.

7. RBI/FEMA guideline will be applicable from time to time.

8. Depending on the nature of transaction DCB Bank may ask for

additional documents as and when required.

Post Transaction Compliance:-

1. Export to be made within 1 year of Advance Remittance received.

2. Export documents to be submitted within 21 days from the date
of shipment.
3. Direct dispatch of export documents to overseas party is
permitted provided a)The exporter is Status Holder or b) Payment
received in advance of full value.
4. Inward Remittance received against FDI, ARF filing to be done
within 30 days of credit of remittance and FCGPR filing within 6
months.
5. Inward Remittance received against ECB, Form 83 and ECB2
Return to be filed monthly.

Step 7:

After credit in the exporter’s account the beneficiary bank issues BRC.
Authorized dealers issue, e BRC once the payment is received and only
with the issuance of the e BRC, the export transaction becomes
complete.

Note: BRC is Bank Realization Certificate issued by the bank to

their customers who are in export business on each shipment if
export proceeds.It is one of the proof for the exporter to claim
export promotion benefit.

In order to get BRC exporter has to submit a copy of GR-Form to prove

the account under which they had received foreign amount.

At present there is no FIRC( Foreign Inward Remittance Certificate) or

BRC ( Bank Realization Certificate) required for government export
promotion agencies like DGFT or custom department where in EDI(
Electronic Data Interchange) facility available ,as the said foreign receipt
is directly linked electronically with customs and DGFT through the
authorized dealer bank of exporter.

Step 8 : The Bank Login to the IEDPMS site to update the remittance.
The Export Data Processing and Monitoring System (EDPMS) is an
online software introduced by the RBI in 2014 for all banks to bring their
transactions with the exporters online.

Under the system, the banks download the shipping bills or softex forms
issued by export agencies such as customs, special economic zones
(SEZ) and Software Technology Parks of India (STPIs), bill of entry
issued by ports.

This data is then matched with the data on inward remittance of export
proceeds from the exporting company.

Outward Remittance :
Remittance from our country to foreign countries is called outward
foreign remittance. On the other word, sales of foreign currency by the
authorized dealer or formal channels may be addressed as outward
remittance. The authorized dealers must utmost caution to ensure that
foreign currencies remitted or released by them are used only for the
purpose for which they are released. Outward remittance may be made
by appropriate method to the country to which remittance is authorized.
Most outward remittance is approved by the authorized dealer.

The purpose for the outward remittance may be import of goods from the
foreign country.

The process of the outward remittance is just opposite to the inward

remittance. The process can be explained below:

Process of Outward Remittance:

Step 1 : The seller or the exporter in the foreign country will give the
details of the bank account to importer or buyer in India, so that money
transfer safely.

Step 2: The remitter or the importer went to the remitting bank i.e DCB
bank.

Step 3: DCB bank gives instruction to its correspondent VOSTRO bank

to transfer the amount.

Step 4: DCB bank’s VOSTRO correspondent further request exporter’s

bank NOSTRO correspondent to transfer the remittance amount.

Step 5: Exporter bank’s NOSTRO correspondent further credits the

amount to the beneficiary bank i.e. Exporter bank.

Step 6: Beneficiary bank (i.e. Exporter bank) credits amount to

customers account post stating purpose of remittance

Documents for the Import payment or Outward Remittance..

Import Transactions

A. Advance Import Payments

1.Request Letter

2.Form A1

3. Proforma Invoice / Sales Contract signed by both parties Payment

Terms to reflect as Advance.

4. Declaration confirming that the advance payment does not involve

trade with any counterparties/countries /shipping lines /ship flags /ports /
shore listed under OFAC/UN sanctions

Note:

1. Payment terms on the invoice should call for Advance Payment

2. Adequate balance should be available in the account for making the

advance import payment

3. For every Advance Import Payment, the payment would be made

based on satisfactory due diligence on the Overseas Party. Request you
to contact your RM 2-3 days prior of Advance Payment

4. Original Import License would be required in case the goods fall under
the category of for in case the goods imported are in negative/restricted
list of Import in India

5. Bill of entry should be submitted within 90 days (3 years in case of

capital imports)

6. RBI/FEMA guideline will be applicable from time to time

B. Direct Import Payment

1. Request Letter

2. Commercial Invoice
3. Copy of Transport Documents (Bill of Lading/ Lorry Receipt /Air Way
Bill etc.)

4. Original exchange control copy of Bill of Entry (BOE). (CA certificate

should be provided in lieu of BOE in case of software imports)

Note:

1. Receipt of import documents by the importer directly from overseas

suppliers is allowed subject to certain conditions as specified in the RBI
circular

2. Adequate balance should be available in the account for making the

Direct Import Payment

3. Original Import License would be required in case the goods fall under
the category of or in case the goods imported are in negative/restricted
list of Import in India

4. In case BOE is not available due to goods in transit, declaration

should be provided for submission of the BOE within 15 days

5. Reasons for delay in payment should be furnished where the payment

is delayed more than 6 months from date of shipment

6. Bill drawn by any counterparties/countries /shipping lines /ship flags

/ports / shore listed under OFAC/UN sanctions would not be handled by
us.

6. RBI/FEMA guideline will be applicable from time to time.

RESEARCH METHODOLOGY

Method of research
 • Observation method-. In this the process of Inward
Remiitance and the process of inward and outward remittance
were observed. Whether they were handling the proper
documentation or not.The process was followed or not one after
another.
• Questionnaires method- This method included questionnaire
which was asked to the Forex executive at DCB bank.

Type of research-

Descriptive research- Descriptive studies are under taken in many

circumstances. When the researcher is interested in knowing the
characteristics of certain group such as age, gender, occupation,
educational level or income, a descriptive study may be necessary.
Other cases when a descriptive study could be taken up are when
researcher is interested in knowing the proportion of people in a given
population who are aware with the procedure and issuance of certificate
after the transaction of the foreign exchange.

Data type- Primary Data

Primary data is that which is collected by sociologists themselves during
their own research using research tools such as experiments, survey
questionnaires, interviews and observation.

Primary data can take a quantitative or statistical form, e.g. charts,

graphs, diagrams and tables. It is essential to interpret and evaluate this
type of data with care. In particular, look at how the data is organized in
terms of scale. Is it organized into percentages, hundreds, thousands
etc. Is it a snapshot of a particular year or is it focusing on trends across
a number of years?
Primary data can also be qualitative, e.g. extracts from the conversations
of those being studied. Some researchers present their arguments
virtually entirely in the words of their subject matter. Consequently the
data speaks for itself and readers are encouraged to make their own
judgements.
Primary data is the data collected by the researcher himself. I have used
the following sources of data in this project work.

• In my research the primary data collections was mainly done

through the questionnaires to Forex executive, I meet the
respondent personally & requested to answer my questions for the
requirement of my study.

Secondary data
Secondary data is data collected by someone other than the user.
Common sources of secondary data for social science include censuses,
organizational records and data collected through qualitative
methodologies or qualitative research.

Primary data, by contrast, are collected by the investigator conducting

the research. Secondary data analysis saves time that would otherwise
be spent collecting data and, particularly in the case of quantitative data,
provides larger and higher-quality databases that would be unfeasible for
any individual researcher to collect on their own. In addition, analysts of
social and economic change consider secondary data essential, since it
is impossible to conduct a new survey that can adequately capture past
change and/or developments.

• Previous research

• Data collected from store Web information

Data Collection tools –

The data was collected through questionnaire and data given by the
branch office.

• Sampling plan – Non-probability sampling plan.

• Sampling Unit-- The sampling unit were all respondent where the
executive of DCB bank.
• Size- Since my research work is entirely based on descriptive
design .I have used the sample size as 10.

• Sample unit- The sampling unit were all respondent where the
executives of the DCB bank and the customer of the DCB Bank.

• Sampling method- Non probability convenient sampling is used.

DATA ANALYSIS RESULTS AND INTERPRETAION

1. Do you know the complete process and documentation needed for

the purpose of remittance ?
 S.no. Particulars No. of Respondant %
1. Yes 6 60
2. No 4 40
Total 10 100

Process and Documentation

Yes
No

Through the above graph the results shows that the only 60% of the
executives knows the complete process and documentation of the
remittance in foreign exchange department.The reason is that 40% of
the executives were in the learning phase and are freshers so they don’t
know the complete process and documentation needed in the remittance
process.

2. Are you satisfied with technology or software being used in the

remittance process?

S.no. Particulars No. of respondant %

1. Yes 3 30
2. No 7 70
10 100

Technology or software

Yes
No

By the above results of the data collected it clearly shows that 70% of
the executive are not satisfied with the software and the technology
being used in the department.The DCB bank is using finacle software
which as compared to the other banks is time consuming and slower in
process.

3. What could be the reason for delaying in transaction?

S.no. Reasons Yes No

1. High 7 3
 Documentation
2. Unavailability of 9 1
online trading
3. Old version 7 4
software

5 Yes
No
4

0
High Documentation No online Trading old version software

Through the above data collected the results which came out was the
major reason of the delay in transaction is No Online Trading available.
This creates a cumbersome process of the booking of the rate by calling
in the treasury than to obtain the current market rate than confirming to
the customer than again booking for the rate. This also leads to the
change in the prices as the market is volatile and change within
seconds.

4. Do you have any problem regarding manpower?

S.no. Particulars No.of respondant %

1. Yes 9 90
 2. No 1 10
Total 10 100

Problem Regarding Manpower

Yes
No

By the above data collected the results which came out is the manpower
is low in the department which causes hassle in the handling of the
process and documentation.

Data Analysis for Customer Satisfaction:

1. Overall rating for the service provided by the foreign exchange

department of the DCB Bank?
 Very Satisfactory 18
Satisfactory 02
Poor 10

The above analysis shows that most of the customers are satisfied with
the service provided by the DCB bank foreign exchange department.

2. Does the executives explain you about the charges being charged
for the remittance?

S.no. Particulars No.of respondant

1. Yes 29
2. No 1
Total 30

The customers were very satisfied that the bank explains about all the
charges being charged by them for the purpose of remittance.

3. Does the Bank charge lower or higher than the other banks?
 S.no. Particulars No.of respondant
1. Yes 10
2 No 20
Total 30

The above analysis shows that some customers are being charged
higher than the other banks but they are staying with the bank because
of the other services are quite good than the other banks.

4. Does the Bank maintains a healthy relationship with you?

S.no. Particulars No.of %

respondant
1. Yes 30 100
2. No 0 0
Total 30 100

The analysis shows that the customers were very happy with the
relationship maintained by the bank

5. Please give rating to the executive response with you?

Five star 25
Four star 2
 Three star 2
Two Star 1
One Star -

Most of the customers shows a positive response for the executive

behavior and timely response to them,

Limitation
 Time provided to complete the project was only 6 weeks
  Project limited to selected area of Jodhpur only.

 Executives and the Customers were chosen randomly and

the size of the sample is low.

 Sometimes executive use to give wrong information during

survey.

Recommendation
  Most of the problems were regarding the documentation and the
software being used by the DCB bank for the purpose of
remittance. I suggest them to upgrade the software to compete
with the major banks who are using upgraded technology.

 The other main problem is the no online trading is available. This

sometimes also causes loss to the customer in the exchange rate
as the market is volatile. I suggest the bank to have online trading
system and verification team within the department only so that the
process can become hassle free for both the customer and
executive.

 One major problem is the manpower is very low especially in this

department of the bank. I suggest them to appoint the talented
candidates so that there will be no delays in the process of the
foreign exchange transactions.

Conclusion
From the beginning of greater change in the world economic structure,
DCB Bank is trying to develop banking sector through welfare and
servicing to the people. DCB Bank Ltd is committed towards the
excellence in the service with efficiency, accuracy and proficiency.

DCB Bank, being a bank of twenty first century, is also extending such
contributions as to the advancement of the socioeconomic condition of
the country. Like of most of the commercial banks, foreign exchange
department is one of the most important departments of Mercantile Bank
Ltd. Perhaps, it is the most important department of the Bank. This
department is driving the bank from the front.

DCB actively takes place in foreign exchange especially in export and

import. Every year bank earns a lot of money by issuing letter of credit
and its growth rate increase at in increasing rate.

The entire two months of the internship was a learning experience. A lot
of ups and downs came in the path of project completion but the end
results were very promising.

Company seems to be doing quite well and its customer’s base seems
satisfied. The company and the process of completing the transaction
can be easier if the Executive and the Verification team cooperate each
other in their work.

I observed that overall the environment was good but sometimes it is not
co-operative. According to the data collected I found most of the
feedback was positive but few of them were problematic also.

Overall If the DCB bank upgrades its technology, training and increase
the number of employees in the foreign exchange department, it will be
fruitful in the generation of revenue of the Bank.

Questionnare
 “Customer Satisfaction Feedback Form”

Name of the Customer?

Age

Occupation

Involved in Import/Export Business?

Customer of DCB Bank since?

Are you satisfied with the overall service of DCB bank?

Does the bank charge higher/lower charge than the other banks?

Does the bank maintains healthy relationship with you?

Does the executive explain you about the charges charged by you
for the purpose of remittance?

Would you like to give rating for the executive behavior and timely
response to you?

Would you like to give any suggestion for the improvement in the
service?
 Does the bank settle your transaction on time?

Bibliography
 Book C.R.KOTHARI Research methodology, new age international
publishers Srivastava T.N., (2011), Business research
methodology, Tata McGraw - Hill Education private limited.

 Online References:www.dcbbank.com. · www.Slideshare.com ·

www.dcbbankremit.com, www.ebco.com

 News Paper: · Economic Times · Times of India