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Universal Banking Solution from Infosys Confidential and Proprietary to Infosys Technologies Limited MULTICURRENCY TRNSACTIONS Introduction Regulations Issues CONCEPT OF TRANSACTIONS
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Banking Fundamentals Training
SESSION-4
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
MULTI-CURRENCY TRANSACTIONS
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
MULTICURRENCY TRNSACTIONS
• Introduction• Regulations• Issues
CONCEPT OF TRANSACTIONS
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
MULTICURRENCY ACCOUNTS
EEFCRFCPCFC
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
MULTICURRENCY CONVERSION RATES
• Notional Rates• Market Exchange Rates
PS: Transactional Risk
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
MULTICURRENCY ACCOUNTINGAccounts are maintained Individually for each currencyIn case of buying
Dr. Foreign Currency A/cCr. Home Currency A/c
In case of SellingDr. Home Currency A/cCr. Foreign Currency A/c
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
MULTICURRENCY ACCOUNTING(Contd.)End of Day
– Net position Branch-wise calculated
– Net Position bank-wise calculated
– Inter-Office Dr./Cr. Entries posted in home currency
– Net position of Bank squared by F.D. in foreign Currency
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
EXCHANGE RATE MECHANISM
DIRECT QUOTATIONINDIRECT QUOTATION
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
FACTORS INFLUENCING EXCHANGE RATES
FUNDAMENTAL ISSEUS TECHNICAL ISSUES
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
FUNDAMENTAL FACTORS
• BALANCE OF PAYMENT• ECONOMIC GROWTH RATE• FISCAL POLICY• MONETARY POLICY• INTEREST RATES• POLITICAL ISSUES
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
TECHNICAL ISSUES
CHARTINGTREND ISSUES
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
EXCHANGE RATES
– BUYING RATES
– SELLING RATES
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
PRINCIPAL TYPES OF BUYING RATES
• TT BUYING RATE• BILL BUYING RATE• DD BUYING RATE• TC BUYING RATE• CURRENCY BUYING RATE• CHEQUES BUYING RATE
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
PRINCIPAL TYPES OF SELLING RATES
• TT SELLING RATE• BILL SELLING RATE• TC SELLING RATE• CURRENCY SELLING RATE
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
FORWARD RATES FORWARD RATES ARE ALWAYS
HIGHER THAN SPOT RATES EXAMPLE USD/ITALY EXCHANGE
RATESUSD
CONVERSION RATE ITL
10000 @1500 15000000Intt. @5% Intt. @10%After 1 yr. After 1 yr. USD 10,500 @1571.43 16500000
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
CONCEPT OF TRANSACTIONS
OTHER EXCHANGE RATE RELATED ISSUES
• MERCHANT BUSINESS• MERCHANT RATE• BASE RATE• BANK MARIGIN• COVER OPERATION• DEALING ROOM OPERATIONS• FEDAI• REVALUATION• VALUE DATED TRANSACTIONS
Universal Banking Solution from InfosysConfidential and Proprietary to Infosys Technologies Limited
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