Buy, sell foreign currency online
Though the registration begins on Monday, you will be able to trade only from August 5. Here is a look at why there’s a lag in the trading system and what you should know about it.Updated: Jul 01, 2019, 11:53 IST
On July 1, you can register on a forex platform to buy and sell foreign currency. Recently, the Reserve Bank of India (RBI), in its monetary policy, said that to bring transparency in forex trading for retail customers, an online facility will be launched. As part of RBI’s initiative, the Clearing Corporation of India Limited (CCIL) has introduced an FX-Retail platform where you can place an order to buy and sell dollar against rupee. In order to initiate the process, you have to register with the platform as a customer. Though the registration begins on Monday, you will be able to trade only from August 5. Here is a look at why there’s a lag in the trading system and what you should know about it.
How to register?
To be able to initiate an online transaction, you will have to register on https://www.fxretail.co.in/ and provide the name of your bank. After the registration, your details will be sent to your bank for verification and approval. On approval, you will get a login ID and password. As an individual, you have to pay a one-time registration fee of Rs 300, plus goods and services tax. For non-individuals such as mutual funds or companies, the one-time registration fee is Rs 1,000. For transaction amount up to $50,000, you don’t have to pay any fee. For a transaction amount above $50,000, the transaction fee is 0.0004% on the value of transaction in rupees.
During the registration process, you will have to upload your PAN and your bank details such as IFSC code. Once your account is registered, you will get a confirmation on your email. Once the trading system becomes operational on August 5, you can start selling and buying dollars online.
Will it be cheaper to buy online?
The objective to launch an online platform is to bring in transparency in the fee structure and margin in case of forex transaction. “Through the platform, you will know the currency exchange rate. The actual delivery will happen through the bank. There is an interbank price which a wholesale price. You can place a buy-and-sell request based on the interbank rate,” said an official close to the development.
“Now, banks have to mention the margin, which will be visible to the customer. Currently, the charge is not transparent. The rate will be available anonymously. You will not know who is providing the rate on the platform,” he said. But this doesn’t necessarily mean the online platform will turn out to be a cheaper option. “Margin will be different for different banks. It doesn’t mean that the margins will be lower.” As an individual you will be able to transact only in dollars on this platform. You will get the exchange rates and margin available transparently. However, it is too early to understand the liquidity situation and pricing structure.