A consulting engineers association on Thursday urged the government not to route foreign currency transactions within the country through the American banking system in order to cut transaction fee cost.
The Consulting Engineers Association of India (CEAI) demanded that such deals involving foreign currencies such as the US dollar in the country should be routed through the Reserve Bank of India.
“Currently, transaction fee is levied on US dollars transactions within the country. As you are aware, while transacting in US dollars or UK Pounds or Japanese Yen between any two countries, the payment is routed through the corresponding banking system and a transaction fee is paid,” K K Kapila, Chairman, Business and Policy Committee, CEAI said.
“The transactions in US dollars payments within India, say a payment in US$ from Delhi to Hyderabad from one entity to the other in the current dispensation, is required to be undertaken through the US. This should be undertaken directly through the Reserve Bank of India and there should be no requirement of routing them through the American banking system,” he said.
By routing the transactions through the American banking system, the country is losing substantial money, which is going to Americans towards transaction costs, Kapila said. “Is it not a peculiar scenario that one of the banks from India sends dollars to the US to get them back in another Bank in India? To my mind, as long as we are transacting in US Dollars within India, there should be no transaction cost payable to the US,” he added.
“This needs an urgent correction, lest we continue to lose every single day. If it is part of some trade agreement, it needs an urgent relook. Let this be addressed on top priority,” he added.