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Subject
: Instructions to the Banks for recovery of bank charges
based on actuals and not considering the same as a
source of revenue.
EPCES
had organized an Open House in Kolkata on 20-9-05
under the Chairmanship of Shri G. K. Pillai, Additional
Secretary, Ministry of Commerce & Industry. In
this meeting EOUs and SEZ units had highlighted that
bank charges have increased exorbitantly on various
accounts like courier charges, commission charges
for remittance etc. It was emphasized that recovery
of bank charges should be based on the actuals and
should not be treated as a source of revenue. Shri
P. K. Pain, Chief Executive, Foreign Exchange Dealers’
Association of India (FEDAI), who was present in the
Open House, agreed that FEDAI will issue instruction
to all the banks on this account.
I
am happy to inform you that FEDAI has issued instructions
to all the banks reiterating that recovery of bank
charges should be based on the actuals and they should
not treat the same as a source of revenue. I have
received a letter No.1602/M/2005 dated 6th October
2005 from Shri P. K. Pain, Chief Executive, FEDAI.
A copy of this letter is enclosed. Mr. Pain has also
sent me a copy of the instruction No. SPL-63/Recovery/2005
dated 6th October 2005 and a copy of earlier circular
No. SPL-56/Recovery/2003 dated 7th October 2003 issued
to all the banks. Copies of these instructions are
enclosed alongwith.
EOUs
and SEZ units can accordingly make use of these instructions
while interacting with the banks.
Foreign
Exchange Dealers’ Association of India
(Registered
under Section 25 of The Companies Act, 1956)
17TH
FLOOR, MAKER TOWERS, ‘F’, CUFFEE PARADE,
MUMBEI 400 005
TEL.
22182583/22184432 FAX. 22189946 TLX. 011 82767
E-mail
: fedai@bom5.vsnl.net.in Website: www.fedai.org.in
Chief
Executive
` 1602/M/2005
6th
October 2005
Dear
Shri Singhal,
We
thank you for your letter No. EPC/SEZ/AM05/F.2 dated
26th September, 2005 forwarding therewith the ‘Record
Note’ of the discussion of Open House meeting
held under the Chairmanship of Mr. G.K. Pillai, Additional
Secretary, Ministry of Commerce & Industry on
20-9-05 at Kolkata. As discussed, we have issued suitable
circular to our member banks reiterating that the
recovery of bank charges (courier charges/out of pocket
expenses etc) be based on actuals and not treating
the same as a source of revenue, a copy of which is
enclosed.
With
regards,
Yours
sincerely,
Sd/-
(P.
K. Pain)
Shri
L. B. Singhal
Director
General
Export
Promotion Council for EOUs & SEZ Units
Ministry
of Commerce & Industry, Govt. of India,
705,
Bhikaiji Cama Bhawan, Bhikaiji Cama Place,
New
Delhi 110 066
Encl:
a/a
Foreign
Exchange Dealers’ Association of India
(Registered
under Section 25 of The Companies Act, 1956)
17TH
FLOOR, MAKER TOWERS, ‘F’, CUFFEE PARADE,
MUMBEI 400 005
TEL.
22182583/22184432 FAX. 22189946 TLX. 011 82767
E-mail
: fedai@bom5.vsnl.net.in Website: www.fedai.org.in
SPL-63/Recovery/2005
6th
October 2005
Dear
Sir,
Recovery
of courier charges and Other out of pocket expenses
We
request a reference to our Special Circular No. 56/Recovery/2004
dated 7th October 2003 (reproduced overleaf), inter
alia, conveying that the actual out of pocket expenses
such as courier tariff, telex charges and other handling
charges, if any, are expected to be recovered by member
banks based on actuals and that customers be kept
informed in advance about the bank’s schedule
of charges on various forex transactions. We, however,
continue to receive a few references informing us
that such charges recovered by some of the banks are
very high. Recently during the ‘Open House’
meeting organized by ‘Export Promotion Council
for EOUs & SEZ Units’, Ministry of Commerce
and Industry, Govt. of India at Kolkata, which was
chaired by the Additional Secretary, Ministry of Commerce
& Industry wherein FEDAI also participated, the
need for reiterating the instructions to banks again
was emphasized. Accordingly we reiterate that recovery
of bank charges towards courier/out of pocket expenses
be based on actuals without considering these transactions
as means of additional revenue and member banks are
requested to be guided by our said circular of 7th
October 2003.
Yours
faithfully,
Sd/-
Chief
Executive
Foreign
Exchange Dealers’ Association of India
(Registered
under Section 25 of The Companies Act, 1956)
17TH
FLOOR, MAKER TOWERS, ‘F’, CUFFEE PARADE,
MUMBEI 400 005
TEL.
22182583/22184432 FAX. 22189946 TLX. 011 82767
E-mail
: fedai@bom5.vsnl.net.in Website: www.fedai.org.in
SPL-56/Recovery/2003
7th
October 2003
TO
: ALL HEADS OF IDS/FEDS OF MEMBER BANKS
Dear
Sir,
Recovery
of courier charges and Other out of pocket expenses
During
the various Seminars on Export Credit organized by
RBI for exporters and financing banks, it has been
very often contended by exporters that courier charges
recovered by a few banks are very high.
As
you are aware, FEDAI Rules relating to charges stand
deleted with effect from 27th September 1999. As indicated
in our Special Circular No. 2442/FEDAI Rule/SPL-79/99
dated 28th September 1999, member banks are free to
determine their own charges for various types of forex
transactions, keeping in view the advice of RBI that
such charges are not out of line with the average
cost of providing services. Accordingly, banks are
expected to recover only the actual out of pocket
expenses such as courier tariff, telex charges etc.,
and other handling charges, if any, recovered as per
the respective banks’ policy may be shown separately
instead of including this as courier expenses. This
would allay the fear of customers that banks are treating
such out of pocket expenses as a source of additional
income to them.
We
suggest that customers may be kept informed in advance
about the bank’s schedule of charges for various
forex transactions so as to eliminate avoidable correspondence
in this regard.
Yours
faithfully,
Sd/-
Chief
Executive
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