FOREX RATES: A COMPARATIVE ANALYSIS OF VARIOUS INDIAN

PUBLIC AND PRIVATE BANKS AND OTHER INSTITUTIONS

INTROUCTION
This Article is written on the basis of the exchange rate on 16/08/2019. However,
through this, I intend to share my long research and understanding of the forex (foreign
exchange) services of various Indian Banks and some institutions and then make certain lasting
observations. I undertook this study for personal reasons.1 I have only looked at the below
referred Banks/institutions.
At the time this Article was written, the GBP/INR, USD/INR and GBP/USD exchange
rates were trading in the forex market at 86.56, 71.23 and 1.21 respectively. This exchange rate
is amid the US-China trade war, the Hong Kong protests, the crash of the Argentinian peso,
the Kashmir unrest and the threat of a global recession.
Definitions-
Most banks dealing with forex services display their daily rate cards on their website. I
have attempted to simply explain the most relevant terms and acronyms used by in the rate
cards.
Buy: This is the rate in INR at which the Bank would buy the foreign currency
(USD/GBP etc.) from you. Sell: This is the rate in INR at which the Bank would sell the foreign
currency (USD/GBP etc.) to you. CN: Currency Notes: This is the actual hard currency. TT:
Telegraphic Transfer: Wire transfer of money. TC: Traveller’s Cheque. SWIFT: Society for
Worldwide Interbank Financial Telecommunication: Used for International Wire transfers.
Forex Card: A prepaid debit card issued by the Bank in which the money is loaded in a foreign
currency.
Example-
1) The applicable CN rates by PNB on 16/08/2019: An Indian can buy GBP Currency
Notes (CN) from an authorized branch of PNB at the rate of INR 87.56 for 1 GBP. The
reciprocal selling rate is INR 84.79 for 1 GBP.
2) The applicable TT rates by PNB on 16/08/2019: An Indian can send or receive money
from a foreign Bank Account using SWIFT transfer. The SWIFT codes are used for
international wire transfers. The Telegraphic Transfer (TT) is the applicable rate in a
SWIFT transfer. PNB makes an outward transfer (i.e. converting INR to any other
currency) at the rate of INR 86.7 per 1 GBP. Reciprocally, it accepts money (i.e. foreign
currency) at the rate of INR 85.82 per 1 GBP.
FOREX RATE
Whenever we make a payment in a currency other than the currency of our Card, the Bank
that has issued us the (Debit/Credit/Forex) Card applies a generally pre-determined daily is
Forex Rate, which may sometimes be the same, or nearly the same, as the TC rate.

1
My reason is for the search of the best and most efficient forex services offered by Indian Banks, especially for
a student who intends to study in the United Kingdom for one year.
 Over and above this Bank determined forex rate, the Bank often charges us a cross-
conversion currency fee. For most variants of cards, these range from 2% to 3.5% of the
transaction amount. Imagine that I have a Visa Debit Card that is loaded in INR. I go to the
United Kingdom and purchase an item costing GBP 100. I swipe my card to pay the bill. So,
the Bank will first convert my loaded INR into GBP at the daily TC Sell/Forex Rates. Assume,
that the open forex market rate in which the currency is trading is INR 87. The rate (TC Sell
rate/Forex Sell rate) applied by my Bank was INR 90. My Bank will therefore, deduct, INR 90
X 100 = INR 9000 + 3.5 % cross currency mark-up charges, which is therefore equal to INR
9,315. But, my initial estimated expenditure was INR 8,700! In other words, a largely avoidable
loss of INR 600 on a INR 8700 expenditure!!!
Therefore, it becomes very important that we as travellers choose the best institution that
gives us the most user friendly and competitive rates. Let us compare the FOREX Rates for
Different Banks on 16/08/2019 to get a rough idea of the different rates offered by Public and
Private Banks in India.
BANK CURRENCY TT TC CN
Buy Sell Buy Sell Buy Sell
PNB GBP 85.82 86.70 85.25 87.13 84.79 87.56
IndusInd Bank GBP 84.51 88.16 83.62 89.05 83.26 89.41

ICICI Bank GBP 84.32 88.86 84.23 88.52 83.71 89.60

HDFC Bank GBP 84.89 87.73 84.89 87.99 83.91 89.48
YES BANK GBP 84.2 88.24 83.23 89.21 83.23 89.21
Axis Bank GBP 84.76 90.58 84.10 88.90 83.85 89.15
Bookmyforex GBP - 86.68 - 86.78 86.15 87.85

Therefore, it is rather clear that the best Forex rates is given by the PNB (Pubic Sector
Bank), which most of the private Banks providing the worst Forex rates. If one is still
determined to choose a private Bank and use a debit/credit card loaded in INR, I would
recommend that choose one which has the lowest (or even NIL) cross-currency mark-up.
IndusInd Exclusive Debit Cards, among some others, do offer zero cross-currency mark-up
fees.
FOREX CARDS
Some Banks/financial institutions in addition to providing TT and CN, also issue Forex
Cards. Sometimes, the Forex card rates are better than TT, TC, CN etc. rates.
These are the rates at which different Banks offer Forex Cards. I have also assessed the
amount that the Bank charges someone for every 1000 GBP that they would purchase from the
Bank.
BANK FOREX RATE Bank credits to your Bank debits from
(GBP/INR) Forex Card your Account
PNB 86.40 1000 GBP 86,500 INR
IndusInd Bank 86.5478 1000 GBP 86,800 INR
 ICICI Bank 88.52 1000 GBP 88,680 INR
HDFC Bank 87.99 1000 GBP 88,150 INR
YES Bank 89.21 1000 GBP 89,350 INR
Axis Bank 89.20 1000 GBP 89,350 INR
bookmyforex 86.5381 1000 GBP 86538 INR
Thomas Cook 88.2 1000 GBP 88200 INR

Therefore, it is rather clear that the best Forex Card rates are given by the PNB (Pubic
Sector Bank) and bookmyforex, which some of the private Banks, like Axis Bank and YES
Bank have the worst Forex Card rates. IndusInd Bank does make a comparatively well
performance by having a rate that nearly matches PNB. In between PNB and IndusInd Bank,
it comes more on additional factors like the cross-currency mark-up, Issuance Charge, ATM
withdrawal etc, in which IndusInd performs better, albeit negligibly.
Personally, I would recommend the following:
FOREX CARDS 1) BookmyForex Forex Card
(Foreign Currency) 2) A PNB World Travel Card
3) IndusInd Forex Card
DEBIT CARDS 1) IndusInd Signature Exclusive Visa Debit Card
(FX Rates/TC) 2) PNB International Debit Card
3) IndusInd World Debit Card
CREDIT CARDS 1) PNB International Debit Card
(FX Rates/TC) 2) HDFC Bank Regalia Credit Card
CURRENCY NOTES 1) PNB
(CN) 2) Bookmyforex
3) Local Money Exchange Dealer
WIRE TRANSFERS 1) PNB
(TT) 2) Bookmyforex

Needless to say, barring a few stray instances of private banks, only Public Sector
Banks (PSBs) and specialized entities (like bookmyforex) are the most favourable and friendly.
It would be much appreciated if the PSBs improve their customer service, so that their true
benefits may be easily accessible to the people.
I hope this Article will help many outbound individuals, especially students who plan
to study in a foreign country.
Legal Disclaimer: This Article is only meant for informative purposes. The author does
not take any liability of or on behalf of any of these Banks/institutions. The author further does
not represent any entity of these entities nor has been personal interest in any of these entities.
Reader discretion is advised.
Author: SHLOK GOEL
Law Student
BBA. LLB. (JGU)
LLM (KCL)