FX-Retail and its Uses

The Reserve Bank of India in its Statement on Developmental and Regulatory Policies dated June 6, 2019 had announced the launch of an electronic trading platform for trading in foreign exchange by retail customers of banks. Accordingly, the Reserve Bank of India issued a notification on June 20, 2019 informing about the launch of a foreign exchange trading platform called FX-Retail, developed and managed by the Clearing Corporation of India Limited (CCIL) for retail participants. The customer registration process on the above platform was started from July 1, 2019 and trading on the above platform was started from August 5, 2019.

Reserve Bank of India has highlighted that this platform provides transparency and fair pricing to retail users (Individuals, Corporates and Micro, Small and Medium Enterprises) in foreign exchange.

Clearing Corporation of India Limited has developed a web based, FX- Retail Trading platform for retail participants which includes individuals, corporates, micro, small and medium enterprises etc., to trade in foreign exchange. This web-based platform can be used for trading in foreign exchange in the form of US Dollar/INR currency pair. Bank's customers who need to buy or sell US Dollars in exchange for Rupees can access the FX-Retail platform through the website https://www.fxretail.co.in.

Union Bank of India's performance in FX-Retail

Many MSME and corporate customers of Union Bank of India are using FX-Retail facility, and bank aims to add more customers in the future. Union Bank of India has achieved tremendous success in the foreign exchange (FX-Retail) business. The bank has understood the needs of the customers and provided them with excellent services, which has increased the trust of the customers. The bank aims to provide this facility to more customers in the coming time so that they can fulfill their business needs through this facility. Union Bank of India is looking forward to further improving its services by keeping in mind the future needs of the customers. The bank believes that it can expand its services only by building strong relationships with customers and understanding their changing needs. As part of this strategy, Union Bank of India is committed to add more customers to FX-Retail service.

Customer Registration Process

The customer has to visit the FX-Retail link https://www.fxretail.co.in to register himself. The customer has to register himself using the “register here” button on the homepage where the registration page will be displayed, wherein the customer has to enter the following details:

• Profile Details
• Bank relationship details
• Default user information for creating user credentials

Once the customer has entered all the required details, customer can preview all the fields by clicking on the preview and submit option. To get approved, the customer has to submit the “FX-Retail Limit Request Form” to the respective branch after entering the bank details in the relationship menu. Union Bank of India determines the order amount ceiling limit and the bank's exchange mark-up margin on the platform based on the customer's request. Once the same gets approved by bank, the customer receives user credentials on his registered email ID. A link to the transaction platform is also provided through the email.

Features of FX-Retail

• Internet-based: Customers can access the platform via the internet network.
• Instruments: Customers can trade in US Dollar/INR pair on the platform.
• Order size: Maximum single transactions up to 5 million US Dollars are allowed.
• Execution : Orders will be matched based on price and time priority.
• Limit Order: The customer can place, modify and cancel orders on the trading platform.
• Session Timings: Trading session timings for Union Bank of India customers will be as per the existing regular business timings.
• SMS Facility: Available for customer registration, login, One Time Password (OTP), trade details etc.

Transaction Limits and Charges

• One-time registration charges have been fixed by CCIL as free of cost for individuals and proprietorship concerns and Rs. 1000.00 for others like Partnership Firms, Companies & Corporates etc.
• There is no limit on the number of transactions per customer in a day. The total amount of customer transactions will be subject to the order amount ceiling limit set by the bank.
• Single transaction up to a Maximum of 5.00 million US Dollar​ will be permitted.
• CCIL will not levy any transaction charges for transactions less than USD 50,000.00 per day.
• CCIL will levy a nominal charge of 0.0004% for transactions above USD 50,000.00.
• Exchange mark-up margin will be applicable as per the approval given by bank to the customer.

Union Bank of India is not charging any extra fee from its customers for this facility but transaction charges levied by CCIL will be payable by the Customer and will be settled from the Customer's account.

Transaction Processing -- FX-Retail (Union Bank of India)

Before buying or selling foreign currency on FX-Retail, the bank needs to set order amount ceiling limits and exchange mark-up value for the customer on the platform as per customer registration process given earlier. After submitting completely filled transaction forms e.g., request letter, A2 Form and declaration in accordance with Foreign Exchange Management Act (FEMA) to the concerned branch, the customer can place orders on the FX-Retail platform within the validity period and up to the limit prescribed by the Bank.

On successful completion of the FX-Retail order, an order confirmation SMS is sent to the customer on their registered mobile number. The customer needs to immediately contact the concerned branch with this order confirmation along with any other documents as required by bank/branch for execution of the transaction.

Benefits of FX-Retail Platform Facility to Foreign Exchange Market Participants

• Customers can buy/sell US Dollars at the best exchange rate.
• Customers can deal directly on the platform and get access to current market rates, thus moving from telephone-based trading to electronic trading.
• The platform provides transparency and better value to the customers.
• The customer will get a dealing platform that also offers automated price discovery facility apart from other qualitative benefits.
• Security is ensured through 2 step authentication (Password & OTP).
• Access to inter-bank exchange rates is possible.
• Facility to add more than one relationship banks is available.
• Facility to set transaction priorities is available.
• Provides a better comparative view on prices and mark-ups.
• Facility to send information through SMS is available for each trade.

FX-Retail is an initiative by RBI to promote fair, transparent and competitive rates for the customers, where the customers have the option available to them to get the best value in the foreign exchange market.

Union Bank of India is one of the first banks to offer its customers the FX-Retail platform powered by CCIL and through this the Bank has made it extremely easy for all its customers to carry out foreign exchange transactions in greater volumes.