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Summer Internship Programme Report

On Forex Department At United Bank Of India


(Parkstreet Branch)

By

SHAJAR AHMED
Acknowledgement
. I am thankful

to Mr. P.P.Singh (AGM of park street branch), Mr.P.Sutar (Officer of Forex in Park Street branch) and also Mr. Sudip for their professional help and support during the course of my internship I am very much thankful to Mr. Nabarun Dey Purkayastha (AGM of IBD department) for sending me in the Park Street branch to see the foreign exchange operations My deepest gratitude to the DGM of HRM Mr.Sanjay Dasgupta for giving me an opportunity to be associated with UNITED BANK OF INDIA, KOLKATA I am deeply indebted to Mrs. Lopamundra Bhattacharya ,The CEO of Global Leadership Forum School Of Management (GLF) for having allowed me to carry out the project.

About International Trade


International trade is the exchange of capital, goods, and servicesacross international borders or territories.In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization,advanced transportation, globalization, multinatio nal corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture.

What is a Bank?
Finance i Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system. s the life blood of trade, commerce and industry. Now-a-days, bankimodern business. Development of any country mainly depends upon the banking syste Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system.

What is a Bank?
Finance is the life blood of trade,commerce and industry.Now a days banking sector acts as tha backbone of modern business.Development of any country mainly depends upon the banking system. The term BANK is derived from the French word BANCO which means a BENCH or Money Exchange Table.In olden days,European country money lender or money changer used to display coins in big quantity on benches or table for the purpose of lending or exchanging.

Banking History
Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became theBank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted

as quasi-central banks, as did their successors. The three banks merged in 1921 to form theImperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. Merchants in [Calcutta] established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 184849. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues stock and requires shareholders to be held liable for the company's debt) It was not the first though.

During Post Independence


The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. TheGovernment of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

The Reserve Bank of India, India's central banking authority, was established in April 1934, but was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).[1] In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India".

The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the SBI, and no two banks could have common directors.

Nationalisation
Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation."[2] The meeting received the paper with enthusiasm. Thereafter, her move was swift and sudden. The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969')) and nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. These banks contained 85 percent of bank deposits in the country[2]. Jayaprakash Narayan, a national leader of India.

United Bank of India(UBI) History United Bank of India (UBI) is one of the 14 major banks which were nationalized on July 19, 1969. Its predecessor the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz. Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932) (which were established in the years indicated in brackets after the names). The origin of the Bank thus goes as far back as to 1914. As against 174 branches, Rs. 147 crores of deposits and Rs. 112 crores of advances at the time of nationalisation in July, 1969, today the Bank is 100% CBS enabled with more than 1600 branches and offices and is having a Total business of more than Rs 1.50 lac crore. Presently the Bank is having a Three-tier organisational set-up consisting of the Head Office, 32 Regional Offices and the Branches. After nationalization, the Bank expanded their branch network in a big way and actively participated in the developmental activities, particularly in the rural and semi-urban areas in conformity with the objectives of nationalization. In the year 1970, they set up mobile branches. In the year 1973, Hindustan Mercantile Bank Ltd merged with the Bank and in the year 1976, Narang Bank of India merged with the Bank. In the year 1980, the Bank was appointed as convenor of

State Level Bankers' Committee in West Bengal, Tripura and Manipur. In the year 1993, the Bank brought their first branch under total branch mechanism. In the year 2000, they rolled out their first CBS branch. In the year 2007, the Bank set up United Bank Socio - Economic Development Foundation Trust for rendering assistance to the weaker and under priviledge sections of the society. They set up their first Rural Development & Self Employment Training Institute for providing residential training to small farmers and unemployed youth free of cost. In the year 2009, the Bank achieved 100% CBS for all their branches.
CORRESPONDENT BANK UBI has correspondent banking relationship with more than 450 International banks around the globe. The correspondent banks are selected with great care to ensure that their customers get the best and most reliable service in the foreign lands at most competitive rates.

Highlights for Financial Year ended March 31, 2012 1. Net Profit up by 20.7 %. to ` 632.53 cr (` 523.97 cr in FY 2010 11) 2. Net Interest Income up by 14.3 % to ` 2479.23 cr (` 2169.35 cr in FY 2010-11) 3. Non Interest Income up by 15.1 % to ` 732.91 cr (` 637.05 Cr in FY 2010-11) 4. Operating Profit up by 21.4 % to ` 1828.84 cr (` 1506.99 cr in FY 2010-11) 5. Advance up by 18.4 % to reach ` 63873 crore.

6. Deposit up by 14.5 % to reach ` 89116 crore. 7. Capital Adequacy : 12.69% ( 13.05 % in FY 2010-11) TIER I Capital Adequacy: 8.79 % ( 8.90 % in FY 2010-11) 8. Net Interest Margin at 3.17% 9. Return on Average Assets (RoA) at 0.70% (0.66% in FY 2010-11) 10.Return on Equity- (RoE) at 13.16 %

Foreign Exchange Operation In united bank of india


United Bank of India, one of the major public sector banks in India having a strong presence in the foreign exchange market , has a representative office at Dhaka Bangladesh and the only bank assigned to facilitate Indo Myanmar trade in India.

They have 47 designated B Category Authorized Dealer (AD) branches and 193 C category Authorized Dealer (AD) branches across the country. The Bank has retained its primacy as a leading market maker both in spot and forward markets, along with foreign exchange swap markets. Through its large network of authorized branches, the Bank caters to the foreign exchange needs of its customer engaged in export and import trade and the dealing room at H.O. provides rates for conversion of all major world currencies like U S Dollar, Sterling Pounds, Euro, Swiss Francs, Japanese Yen etc.The services to the customers of the Bank include hedging of foreign currency risks by providing forward covers and various derivatives product, instant encashment of travelers cheques and foreign currency notes tendered by the tourists. Granting of pre-shipment credit in foreign currency and Rupee currency to exporter customers Purchasing/Discounting/Negotiating of export bills Opening of foreign letters of credit for import customers and issue of foreign customers, Execution/Transmission of Payment Orders through SWIFT, Correspondent relationship with major international Banks.

Treasury department of ubi


United Bank of India has a strong presence in the Treasury Market in India. the Foreign Exchange treasury at Head office is equipped with state of art technology, highly experienced and motivated staff with professional skills. The Bank deal in all the major international currencies i.e. US$, GBP, Euro, Yen as well as other

currencies. The treasury undertakes the following treasury related activities:

Foreign Exchange Inter Bank Placements / Borrowings Sale & Purchase of currency on behalf of customers Forward Cover Bookings Cross Currency Swaps Interest Rate Swaps (IRS) Foreign Exchange Money Market Operations
**UBI serves the NRI in a best way by giving them accounts & deposit like: NON-RESIDENT ORDINARY A/C (NRO)

NRE account
1)Eligibility-The Non-resident Indian(NRIs)are permitted to open and maintain NRE account with Authorized Dealer and with banks Authorized by the Reserve Bank. 2)Types of account-The account may be maintained in any form.example:saving , current , recurring or fixed deposits accounts etc. 3)Permitted Credit-(a)Credit to the account shall be only by way of:1)proceed of inward remittance received from outside India through normal banking chanel.

2)Transfer from other NRE account. 3)Interest accuring on the fund held in the account. 4)Any other credit if covered under general or special Permission granted by Reserve Bank. 4)Permitted Debit-a)local disbursement. b)Remittance outside India. c)Transfer to NRE account of the account holder or any other person eligible to maintain such account. d)Any other transaction if covered under general or special permission granted by the Reserve bank. 5)Joint Account-joint account in the name of two or more non-resident individual may be opened provided all tha account holder are person of Indian Nationality or origin. 6)Tax Examption-Income from interest on balances standing to the credit of NRE account is exempt from Income tax. 7)Reporting The transaction in these account shall be reported to the Reserve Bank in accordance with the direction issued by it from time to time.

CASE STUDY ON NRI

1)Mr.snowhite is an executive & undertakes export promotion tour very frequently. In the last financial year he was in australia for nearly 201 days. He wants to claim the NRI status. Whether as a banker will you consider him as NRI? ANS 1)No since mr.snowhite is employed in India and he is undertaking the tour for expanding his companys business and has not gone to Australia for taking up employment or carrying on business outside India for an uncertain period.He, therefore, cannot claim the NRI status.

2)Mr.Snowwhite has gone to Australia to play cricket and represent India.The duration of the matches on account of certain reason is extended upto 7 months.Now Snowwhite wants to claim the NRI status.Can he be treated as NRI since he is more than 182 days abroad?

Ans)No MR.Snowwhite has gone for a fixed period to play in Australia and not for uncertain period.

3)Mr. Snowwhite has taken up British citizenship even though his wife and children are in Mumbai.He travel very often to India to meet his wife and children and is always in India for more than 200 days .Will he be treated as Resident or Non-Resident?

Ans)Mr.Snowwhite will be treated as Non-Resident Since he has no intention to stay in India for an uncertain period.

Services provided by bank to its customer for import


United bank of india provide various type of services to its customerfor facilitating the import in the country.Payment are done by the bank on behalf of its customer for import/purchase of goods, against some security.For this purpose bank need to open an account in foreign bank which is known as Nastro

account. Nastro a/c-it mean a bank account in foreign bank. . All the facilities are subject
to the prevalent rules of the Bank/ RBI guidelines

The various facilities provided are:


Collection of import bill. Opening of Import L/Cs (Sight/ DA) Financing of import by way of Foreign Currency Loans Issuing guarantees etc

Collection of Import bill-The import bills are collected through


their authorized branches at very competitive rates. The Bank has correspondent relationship with reputed International Banks throughout the world and can provide the services to importers who may be importing from any part of the globe

Letter of credit- LC-letter of credit-is a trade related instrument. It is


an assurance given by the buyers bank to the seller.LC is a non fund item. It is also known as documentary credit. All details of goods are attached. Being a Prime Bank of repute, the L/Cs of the United Bank of India are well accepted in the International market. With the Letter of Credit of United Bank of India, importers can build up better trust/ confidence in their suppliers and develop other business relationship.

Parties to a letter of credit:


A letter of credit transaction normally involves the following parties:
1.

Ap plic ant / opener The buye r of the goods ( Importer ) wh o has to m ake payment to an overseas supplier.

2.

Issuing Bank The bank whi c h iss ues th e c redit and undertake s to mak e the payment on behalf of the applicant as per terms of the letter of credit. Bene ficiar y The se ller of the goods (exporte r) who ob tai ns paym ent on presentation of documents complying with the terms and conditions of the letter of credit . Ad vis ing Bank Banks whic h a dvis es the l etter of c redit c ertif yi ng its authenticity to the beneficiary and is generally a bank operation in the country of the beneficiary. Confirming Bank A bank which adds its guarantee to the letter of credit opened by another bank and thereby undertakes responsibility for payment / acceptance / negotiation / incurring deferred payment under the credit in addition to that of the Issuing bank. It is normally a bank operating in the country of the beneficiary and hence its guarantee adds to the acceptability of the letter of credit to the beneficiary. Nominated Bank Bank speci fi call y authori z ed by the is sui ng bank to m ak e payment etc. under the letter of credit. Reimburs ing Ban k Bank authorized to honour the rei mburseme nt cl ai m made by the paying, accepting or negotiating bank. It is normally the bank with

3.

4.

5.

6.

7.

which issuing bank has account from which the payment is to be made.
8.

Transferring Bank In a transferable letter of credit the first beneficiary may request the bank authorized to pay, incur a deferred payment undertaking, acceptor negotiate, to transfer the letter of credit in favour of second beneficiary. Such a bank is called transferring bank. In the case of a freely negotiable credit, the bank specifically authorized in the letter of credit as a transferring bank, can transfer the letter of credit.

Types of letter of Credit


1. R e v o c a b l e l e t t e r o f c r e d i t A revocable letter of credit is one which can be cancelled or amended by the issuing bank at any time and without prior notice to or consent of the beneficiary.

2. Irr e vocabl e lette r of cre dit An irrevocable letter of credit is one which cannot be cancelled or amended without the consent of all parties concerned. 3.Back to back letter of credit When a middle men enters into a contract to supply goods to be obtained from other suppliers but is unwilling to disclose the identity of the buyer and the buyer also is unwilling to open a transferable letter of credit. Actual manufacturer supplier insists on payment against documents but the beneficiary of first credit is short of funds, such back to back credits are opened. The beneficiary of the original letter of credit will become the applicant for the second set of letter of credit (back to back letter of credit).

4.Tra nsfera ble letter of credit A transferable credit is one that can be transferred by the original (first) beneficiary to one or more second beneficiaries. When the sellers of goods are not the actual suppliers or manufacturers, but are dealers / middlemen, such credits may be opened, giving the sellers the right to instruct the advising bank to make the credit available in whole or in part to one or more other beneficiary 5.Revolving letter of credit

A revolving letter of credit is one where, under the terms and conditions there Of, the amount is renewed or reinstated without specific amendments to the credit being needed. 6.Confirmed letter of credit Confirmed letter of credit is a letter of credit to which another bank (bank other than the issuing bank) has added its confirmation. This is to say, in a confirmed letter of credit, the beneficiary will have a firm undertaking of not only the issuing the credit, but also of confirming bank. 7. Standby credit Standby credit is a documentary credit or arrangement however named or described represents an obligation to the beneficiary on the the issuing bank to make payment on account indebtedness undertaken by the applicant, borrowed or for any default by the applicant performance of an obligation. 8.Acceptance letter of credit Acceptance credit is similar to deferred payment credit except for the fact that in this credit drawing of a usance Bill of Exchange is a must. 9.Negotiation letter of credit similar which part of of any money in the

Negotiation credit can be a sight credit or a usance credit. A Bill of Exchange is usually drawn in negotiation credit. In a negotiation credit, the negotiation can be restricted to a specific bank or it may allow free negotiation, in which case it is called as Freely Negotiable Credit whereby any bank who is willing to negotiate can do so. 10.Payment letter of credit Payment credit is a sight credit which is available for payment at sight basis against presentation of requisite documents to the designated paying bank. 11.Def er red pa yment l ette r of credi t Deferred payment credit is an usance credit where, payment will be made by designated bank, on respective due dates, determined in accordance with the stipulations of the credit, without the drawing of Bill of Exchange

About export trade and import trade


Export trade- Exports from India should strictly conform to EXIM policy and exchange control regulations. Every exporter has to apply for and obtain an Importer Exporter code number(IEC).

. Exports may be made under Export Promotion Capital Goods (EPCG ) Scheme which facilitates prior import of capital goods, subject to export obligation to be fulfilled over a period of time. PRE-SHIPMENT Pre-shipment credit is over by the way of packing credit to enable him finance to purchase/import of raw materials, processing and packing of the goods meant for export. Packing Credit is an advance granted to an exporter or a subsupplier for financing the procurement of raw materials, processing, manufacturing, packing, transporting, warehousing and shipping of goods meant for export. Packing Credit is generally granted to an exporter who has an export order or Letter of Credit in his own name and will actually export the goods.The advance is granted against pledge or hypothecation of stocks to be processed / produced to execute the export order.

POST-SHIPMENT Post-shipment finance is granted under the following heads: 1.Negotiation by payment / acceptance of export bill drawn under a Letter of Credit: The negotiating bank will be entitled for re-imbursement of the bill amount paid by it under the Letter of Credit, only if the bill

negotiated strictly conforms to the terms and Conditions of Letter of Credit. 2.Purchase / Discount of export bills drawn under confirmed contract / orders: In respect of bills drawn under these arrangements, the bank has to look primarily to the drawer customer for repayment of advance in the event of non payment of bills, since re-import of relative exported goods ( if these goods are lying uncleared at destination ) is quite expensive and the ultimate sale proceeds in all probability would be disproportionately small in relation of the bill amount. 3.Advance against export bills sent for collection: At times, the exporter might have fully utilized his bills limit and in certain cases the bills drawn under letter of credit may have some discrepancies. In such cases the bills will be sent on collection basis. In some cases, the exporter himself may request for sending the bills on collection basis anticipating the strengthening of the foreign currency. Bank may allow advance against these collection bills to an exporter.

Import trade-The term import is derived from the conceptual


meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". [1] Thus an import is any good (e.g. a commodity) or service brought in from one country to another country in a legitimate fashion, typically for

use in trade. It is a good that is brought in from another country for sale.[2] Import goods or services are provided to domestic consumers by foreign producers. An import in the receiving country is an export to the sending country..

There are two basic types of import: 1. Industrial and consumer goods 2. Intermediate goods and services Companies import goods and services to supply to the domestic market at a cheaper price and better quality than competing goods manufactured in the domestic market. Companies import products that are not available in the local market. The Non Fund Based Credit Facility is in the form of Letters of Credit. It contains an undertaking by the bank to pay against presentation of prescribed documents conforming to the terms and conditions stipulated in the Letter of Credit.

The Fund based Import Finance generally takes the form of a back up limit to the Letter of Credit limit sanctioned to a customer. Such limits are considered where import of goods is made in Economic Order Quantities for use in production over a period of time. However, in the normal course, whenever an import Letter of Credit is considered, it should be ensured that the importer will have sufficient cash flow available to retire the bills presented under the Letter of Credit, promptly. If that is not ensured, the

Bank would be forced to fund the transaction after crystallizing the foreign exchange liability. The import licenses are issued in two copies :** Customer Copy is for the purpose of clearing the imported goods through customs, and ** Exchange Control Copy is to facilitate remittance of foreign exchange on respect of relative import bill .

IEC-Importer- exporter code- no export or import shall be made by any person without an IEC number unless specifically exempted. An IEC number shall be granted on application by competent authority in accordance with procedure specified in HBPv1. Application for Grant of IEC number An application for grant of IEC number shall be made by Registered Office.Only one IEC would be issued/allowed against a single PAN number.The application for issuance of fresh IEC or modification of IEC shall indicate the name and designation of the person whose photograph has been affixed on the bank certificate. Surrender of IEC number

If an IEC holder does not wish to operate alloted IEC number ,he may surrender the same by informing issuing authority.On receipt of such intimation,issuing authority shall immediately cancel it,and electronically transmit it to DGFT and customs authrities.

About bill for collection

Collection Against Bills is published by International Chambers of Commerce (ICC).It is an arrangement by which the seller after shipping the goods submits the documents to his bank as a agent for collection . Documents are presented to the buyer through correspondent bank of the sellers bank , which will be realesed upon buyers payment of the amount specified. , Parties involve in the collection: 1)exporter-is the person who sends the goods to the purchaser and hand over the document related to the goods to their bank. 2)exporter bank is the person who receive the goods from the exporter and remit the bill for collection with proper instruction. 3)buyer- The buyer / importer is the drawee of the Bill. The role of the importer is to: Pay the bill as mention in the agreement (or promise to pay later). Take the shipping documents (unless it is a clean bill) and clear the goods. 4)importer banks- The buyer / importer is the drawee of the Bill. The role of the importer is to: Pay the bill as mention in the agreement (or promise to pay later). Take the shipping documents (unless it is a clean bill) and clear the goods. About Foreign Exchange Management Act 1999 After the review of the Foreign Exchange Regulation Act,1973, in 1993 significant developments have taken place since then such as substantial increase in countrys Foreign Exchange Reserve, growth in foreign trade,rationalization of tariffs, current account convertibility, liberlisation of Indian investment abroad, increased access to external

commercial borrowing by Indian corporate and participation of foreign institutional investor in countrys major stock market. Taking into consideration the above facts the central government decided to introduce the Foreign Exchange Management Act 1999 and repeal the Foreign Exchange Regulation Act 1973 with a view to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade & payment and for, promoting the orderly development and maintenance of foreign exchange market in india.The FEMA , 1999 has come into force on the 1st day of june 2000 and the FERA , 1973 stand repeated.

Regulation notified by Reserve Bank under FEMA 1999 Title of basic Notification
1)Foreign Exchange Management Borrowing and Lending in foreign by an

Summarised Text

(borrowing or lending in foreign Exchange)regulation,2000

authorized dealer. Borrowing and Lending Foreign Exchange by a person other than authorized dealer.

2)Foreign Exchange Management (Deposits)Regulation ,2000

NRO Account NRE Account FCNR(B) Account NRNR Account Acceptance of deposits by a company Incorporated in india.

3)Foreign Exchange Management (export and import of currency) Regulation, 2000

Prohibited on export of Indian coins. Export and Import of Indian currency and currency notes.Import of foreign Exchange into Indian subject to CDF

4)Foreign Exchange Management (possession and retention of Foreign currency)regulation2000 Limits for possession and retention of Foreign currency or foreign coins. 5)Foreign Exchange Management (export of goods and services) Regulation, 2000 General provision relating to export from india.

Definition in FEMA Act,Rule and regulation Section 2(c)Authorised Person mean an authorised dealer,money changer,off-shore banking unit or any other person for the time being authorised under sub-section (1) of section 10 to deal in foreign exchange or foreign securities. Section 2(l)Export with its grammatical variation and cognate expressions,meansa)the taking out of india to a place outside India any good; b)provision of service from India to any person outside India. Section 2(m) Foreign Currency mean any currency other than Indian currency. Section 2(p)Import with its grammatical variation and cognate expression ,mean bringing into India any goods or services.

Section 2(u)Person include: a)an individual; b)a Hindu undivided family; c)a company; d)a firm; e)an association of person or a body of individual; f)any agency,office or branch owned or controlled by such person.

Restriction imposed by FEMA to deal in foreign exchange Under Section 3 of FEMA 1999. No person,unless authorised by RBI shall:a)deal in or transfer any foreign exchange or foreign security to any person not being an authorised person; b)make any payment to or for the credit of any person residen outside India in any manner; c)recevie otherwise through an authorised person, any payment by order or on behalf of any person resident outside India in any manner. d)enter into any financial transaction in India as consideration for or in association with acquisition or creation or transfer, any asset outside India by any person.

GLOSSARY OF TERM FOREIGN TRADE POLICY &CUSTOMS:


Pc-packing credit-advance payment made by bank on behalf of its customer to purchase raw material and export finished goods. FTP-foreign trade policy-Refers to foreign trade policy announced by the commerce & industry minister on 31st august 2004.it is a 5year policy[2004-2009]which provide a stable policy framework.the annual supplement 2005 and 2006 to the FTP announced by the commerce and industry Minister in 1st April 2005, & 1stApril 2006 respectively.

DGFT-Director General of Foreign Trade-which is headed by the director general of foreign trade. The office of the dgft is responsible for formulating and execution of foreign trade policy, including licensing. Appointment of Director General and his Function 1)The central government may appoint any person to be the Director General of Foreign trade for the purpose of this act. 2)The director general shall advise the central government in the formulation of the foreign trade policy and shall be resonsible for carrying out that policy. 3)The central government may, by order published in the official gazette, direct that any power exercisable by it under this act may also be exercised, in such cases and subject to such condition, by the director general or such other officer subordinates to the director general, as may be specified in the order Exim policy refers to export and import policy. Exim policy got in corporated into the comprehensive foreign trade policy, which was announced by the commerce and industry minister on 31st august 2004. CAD-cash at delivery BOF-board on freight ECGC-export credit gaurantee corporation of india 1)It is government undertaking: 2)It help the export to gather information about the importer:

3)It helps to know the exporter about the financial position of the importer: 4)If the importer is not able to pay the amount than the ecgc pay the amount CIF-cost ,freight & insurance ECC- Exchange Control Copy ECC are issued by the custom/RBI.Goods detail are attached along the party detail,description of goods,destination of goods.shipping bill is very vital. Advance Licence-is granted forimport of input without payment of custom duties. Such licences can be issued for import of inputs for use in the export production as well as for replenishment of the input already used in the export product. IEC-Importer- exporter code- no export or import shall be made by any person without an IEC number unless specifically exempted. An IEC number shall be granted on application by competent authority in accordance with procedure specified in HBPv1. Import licence-Except for goods included in the negative list which require licence under the FTP in force,bank may freely open LoC and allow remittance for import.