FEDAI Rules 5, Clean Instruments.

Application of exchange and interest rates
Application of charges
Certificates

RULE 5-Clean Instruments
I. Inward remittances

1. Application of exchange and interest rates
   For the purpose of encashment of TTs/ payment of foreign currency Demand Drafts, Mail Transfer, etc. the application of exchange and interest rates shall be as under table Type of transaction: Exchange and interest rates applicable:
   1. Encashment of TTs/ Purchase of MTs/ DDs current IT buying rate (NO exchange margin in respect of which cover has been received orinterest to be charged) in Nostro Accounts.
   2. Type of transaction: Encashment of TTs/ Exchange and interest rates applicable:
      Purchase of MTs/ DDs where reimbursement is to be obtained in cover by drawing demand drafts on overseas branches or correspondent banks. Current TT buying rate plus exchange Margin of 0.125%. Interest to be recovered separately from the customer
      at the rate of 15% per annum for a transit period of 10 days.
   3. Type of transaction: Encashment of customer’s Exchange and interest rates applicable: personal cheques, demand drafts, international money orders, bankers pay orders payable abroad.
      TT buying rate plus exchange margin of 0.15%. Interest to be recovered separately for a transit period of 15 days from the customer at commercial rate of interest.
      
      Note:
      It shall be optional for the encashing bank in India to pay on application or await receipt of cover in respect of Demand Drafts/ Mail Transfers/ Telegraphic Transfers and pay therefore.
      
      
2. Application of charges
   1. A flat charge of Rs. 25/- shall be recovered in respect of each clean payment effected under instructions from a foreign correspondent. (Bank may waive this charge at their discretion.) (AR 10/95 dated 20.12.95)
      
      Where the inward remittance has to be executed in foreign currency by issuing a demand draft/ mall transfer/ payment order/ telegraphic transfer a charge of 0.10% subject to a minimum of Rs. 10/- shall be recovered from the beneficiary.
   2. Clean instruments for collection:
      
      A commission of 0.25%, subject to a minimum of Rs.10/- shall be recovered on clean instruments for collection abroad. Bank may at their discretion waive this commission if the value of the instrument does not exceed the equivalent of Rs.5000/-. (ar 3/96 dated 30.03.96)
   3. All actual out of pocket expenses of the bank such as postage, telegram, telex charges, including those of the correspondent bank will be recovered from the beneficiary.
      
3. Certificates
   
   1. A flat charge of Rs.25/- shall be recovered for issuing bank certificates on security paper in respect of payment of clean remittances from abroad and/ or for encashment of foreign currency notes. (Bank may waive this charge at their discretion.) (AR 10/95 dated 20.12.95)
      
      Note:
      Banks are authorized by Reserve Bank of India to issue the required certificates on their ordinary printed letter heads in the undernoted circumstances and they may reduce collection of the charge to Rs.20/- in such instances (Bank may waive this charge at their discretion.) (AR 10/95 dated 20.12.95)
      
      1. Where the Rupee value of the inward remittance of foreign currency encashed does not exceed Rs.15, 000/-
      2. Where the certificate (irrespective of amount) is required to be produced to Reserve Bank of India for approval of a remittance for refund or reconversion or for any other purpose to be made through the same bank branch which has received the inward remittance or encashed the foreign currency.
      3. Where the certificate (irrespective of amount) is required to be filed with Reserve Bank of India for completion of records and no facility there against involving foreign exchange directly (i.e. refund, reconversion etc.) or indirectly (i.e. payment of passage fare freight) GR/pp waiver etc. will be asked for.
         
         (Illustratively, where certificate are require to be submitted to Reserve Bank of India in regard to repatriation of foreign exchange against bank guarantees given to Reserve Bank of India, repatriation of dividends/ balances held in foreign currency accounts etc.)
   2. Encashment of foreign currency travellers cheques and currency notes
      
      Foreign currency travellers cheques/ currency notes will be encashed at the bank’s option at the travellers cheques/ currency note encashment rates ruling on the date of such encashment.
   3. Outward remittances
      1. Outward remittances will be effected at the TT selling rate of the bank ruling on the date of such remittance or at forward contract rate.
      2. A minimum commission of Rs.100/- will be levied on all foreign currency outward remittances not being proceeds of import bills. (AR 10/95 dated 20.12.95)
      3. On all Rupee outward remittance, a commission at the following rates shall be charged:Upto Rs. 10,000/- @0.25% Minimum Rs.10/-Over Rs. 10,000/- @0.125% Minimum Rs. 25/-
      4. All actual out of pocket expenses of the bank such as postage, telex charges including those, of the correspondent bank shall be recovered from the customer.
   4. Issue of foreign currency travellers cheques/ currency notes
      1. Foreign currency travellers cheques shall be issued at the option of the bank at the bank’s selling rate for the travellers cheque ruling on the date of issue. Banks will collect a commission not exceeding 1% on Rupee equivalent payable by the customer.
      2. Foreign currency notes shall be issued b banks as per the exchange control regulation and at the foreign currency note selling rates.
      3. Where at the request of the beneficiary other than an Indian resident, foreign currency travellers cheques are issued by a bank against foreign currency remittance received from abroad, the bank will collect in Indian Rupees a commission of 0.25%.