Project

LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT
Report on Summer Training CUSTOMER SATISFACTION IN FOREX SERVICES AT CAPITAL LOCAL AREA BANK LTD. Submitted to Lovely Professional University
In partial fulfillment of the Requirements for the award of Degree of Master of Business Administration Submitted by: APINDER SINGH BATRA 11207917-B33
DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY JALANDHAR NEW DELHI GT ROAD PHAGWARA PUNJAB
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Acknowledgement I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am highly indebted to Jatinder Kumar (Executive) for their guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project. I would like to express my gratitude towards my parents & member of Capital Local Area Bank Ltd. for their kind co-operation and encouragement which help me in completion of this project. I would like to express my special gratitude and thanks to industry persons for giving me such attention and time. My thanks and appreciations also go to my colleague in developing the project and people who have willingly helped me out with their abilities.
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INDEX
Description Executive Summary Chapter 1 Introduction (1.1) (1.2) (1.3) Importance of customer satisfaction Foreign Exchange meaning and features Scope, Significance and need Page no. 4 6 7,8 8 to 10 10 11 12 to 14 14 to 16 17 17 to 53 54 to 59 60 to 65 66 to 79 81 82 83 to 85
Chapter 2 Industry Profile (2.1) (2.2) (2.3) (2.4) Banking Structure In India Company Profile Retail Forex in Jalandhar Forex Services at Captial Local Area Bank
Chapter 3 Literature Review Chapter 4 Research Methodology Chapter 5 Data Analysis Chapter 6 Conclusion References Appendix
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Executive Summary Customers satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to Product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. With the phenomenal increase in the country's population and the increased demand for banking and Forex services; speed, service quality and customer satisfaction are going to be key differentiators for each bank's future success. Thus, it is imperative for banks to get useful feedback on their actual response time and customers service quality perceptions of retail banking, which in turn will help them take positive steps to maintain a competitive edge. This project helps to study the satisfaction level of customers of Forex services in Capital Local Area bank in India.
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CHAPTER 1 INTRODUCTION
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INTRODUCTION A research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic research for pertinent information on a specific topic. In fact, research is an art of scientific investigation. Redman & Mory define research as a systematic effort to gain new knowledge. Some people consider research as a movement, a movement from the known to unknown. It is actually a voyage of discovery. Research comprises defining and redefining problems, formulating hypothesis or suggested solutions, collecting, organizing and evaluating data, making deductions and reaching conclusions and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. Research is, thus, an original contribution to the existing stock of knowledge making for its advancement. It is the pursuit of truth with help of study, observation, comparison, and experiment. In a competitive market place where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Customers satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. The banking industry is highly competitive, with banks not only competing among each other; but also with non-banks and other financial institutions. Most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of price and quality. Therefore, customer satisfaction is potentially an effective tool that banks can use to gain a strategic advantage and survive in todays ever-increasing banking competitive environment. The argument for customer retention is relatively straightforward. It is more economical to keep customers than to acquire new ones. The costs of acquiring customers to replace those who have been lost are high. This is because the expense of acquiring customers is incurred only in the beginning stages of the commercial relationship. In addition, longer-term customers buy more and, if satisfied, may generate positive word-of mouth promotion for the company. Additionally, and are less sensitive to price changes. These findings highlight the opportunity for management to acquire referral business, as it is often of superior quality and inexpensive to obtain. Thus, it is believed that reducing customer defections by as little as five percent can double the profits. Customer satisfaction has been a subject of great interest to organizations and researchers alike. The principal objective of organizations is to maximize profits and to minimize cost. Profit maximization can be achieved through increase in sales with lesser costs. One of the factors that can help to increase sales is
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customer satisfaction, because satisfaction leads to customer loyalty (Wilson et al., 2008, p. 79), recommendation and repeat purchase. Customers became very vital in business during the marketing era of the 1950s when companies could produce what they can sell and not just selling what they can produce as it was during the production era. Since the beginning of the consumption era in marketing, the focus on customers/consumers has increased more as the consumption era also shifts to post-consumption; where organizations are obliged to render more services in addition to what they provide as offers to their customers. (David Armano, 2009). What are the qualities of these services provided to customers? Are the customers satisfied with these services? Thus, this research originated from the fact that customer/consumer is the key to business. In fact, their satisfaction is the most important tool that helps to increase sales and generate profits in the business environment. Moreover, the importance of customer satisfaction and service quality has been proven relevant to help improve the overall performance of organizations. (Magi & Julander, 1996, p. 40).
1.1 Importance of customer satisfaction From the view of operations management, it is obvious that customers play important roles in the organizational process (Lee & Ritzman, 2005, p. 92). Before the placement of strategies and organizational structure, the customers are the first aspect considered by managements. The questions asked in the strategic planning ranges from who will need to consume these offers, where are they and for how much can they buy to how to reach the customers and will it yield them maximum satisfaction? After these questions, the organization will then designs the product, segment the markets and create awareness. This does not only show the importance of customers in the business environment but also the importance of satisfying them. Customers are always aiming to get maximum satisfaction from the products or services that they buy. Winning in todays marketplace entails the need to build customer relationship and not just building the products; building customer relationship means delivering superior value over competitors to the target customers (Kotler et al., 2002, p. 391). Whether an organization provides quality services or not will depend on the customers feedback on the satisfaction they get from consuming the products, since higher levels of quality lead to higher levels of customer satisfaction (Kotler & Keller. 2009, p. 169). Most companies are adopting quality management programs which aim at improving the quality of their products and marketing processes, because it has been proven that quality has a direct impact on product performance, and thus on customer satisfaction (Kotler et al., 2002, p. 8). The reason for this is to satisfy the customers. But, are the customers satisfied because of the products or service quality? I.e. are the companies providing the actual qualities perceived by the customers/consumers? In this era of globalization, people/company is migrating and operating from one country to another. But the value of currency of one country differs from another. So the people face various problems to transact from owned local currency in to the international market. So a service marketer wanted to make inconvenient Page 7
when the transaction is done between different values of currency. This study has been undertaken to analyze whether the customers who deals with Capital Local Area Bank for foreign exchange services in this twin cities are satisfied with the services provided by the Capital Local Area Bank or not. In todays market there are many foreign exchange service providers, but every customer has some preference to choose a particular foreign exchange service provider, and the customer who has used Capital Local Area Bank service at least once will only use the Capital Local Area Bank services again when heist satisfied with the services provided by the Capital Local Area Bank; because if performance he expectations the customer is satisfied. A satisfied customer is a repeat buyer and if the customer is satisfied they also says good things about the product or services to the others.
1.2 Meaning of Foreign Exchange:The foreign exchange market exists wherever one currency is traded for another. The foreign exchange market is an over the counter market in which currencies of different countries are bought and sold against each other. Foreign Exchange is nothing but claims of the residents of a country to foreign currency payable abroad. It is a method of converting one country's currency into another. So as long as there is a cross border flow of funds, the need for such conversion/exchange continues to arise; for example if you are living in India and want to buy electronic goods from Japan, either you or the company that you buy the electronic goods from has to pay them in Yen. This means that the Indian importer would have to exchange the equivalent value of Indian Rupee (INR) into Yen. The same goes for traveling. An Indian tourist in China can't pay in INR to see the Great Wall of China because it's not the locally accepted currency. As such, the tourist has to exchange the INR for the local currency.
FOREIGN EXCHANGE MARKET OVERVIEW In todays world no economy is self sufficient, so there is need for exchange of goods and services amongst the different countries. So in this global village, unlike in the primitive age the exchange of goods and services is no longer carried out on barter basis. Every sovereign country in the world has a currency that is legal tender in its territory and this currency does not act as money outside its boundaries. So whenever a country buys or sells goods and services from or to another country, the residents of two countries have to exchange currencies. So we can imagine that if all countries have the same currency then there is no need for foreign exchange. Let us consider a case where Indian company exports cotton fabrics to USA and invoices the goods in US dollar. The American importer will pay the amount in US dollar, as the same is his home currency. However the Indian exporter requires rupees means his home currency for procuring raw materials and for payment to the labor charges etc. Thus he would need exchanging US dollar for rupee. If the Indian exporters invoice their goods in rupees, then importer in USA will get his dollar converted in rupee and pay
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the exporter. From the above example we can infer that in case goods are bought or sold outside the country, exchange of currency is necessary. Sometimes it also happens that the transactions between two countries will be settled in the currency of third country. In that case both the countries that are transacting will require converting their respective currencies in the currency of third country. For that also the foreign exchange is required. Particularly for foreign exchange market there is no market place called the foreign exchange market. It is mechanism through which one countrys currency can be exchange i.e. bought or sold for the currency of another country. The foreign exchange market does not have any geographic location. Foreign exchange market is described as an OTC (over the counter) market as there is no physical place where the participant meets to execute the deals, as we see in the case of stock exchange. The largest foreign exchange market is in London, followed by the New York, Tokyo, Zurich and Frankfurt. The market is situated throughout the different time zone of the globe in such a way that one market is closing the other is beginning its operation. Therefore it is stated that foreign exchange market is functioning throughout 24 hours a day. In most market US dollar is the vehicle currency, viz., the currency sued to dominate international transaction. In India, foreign exchange has been given a statutory definition. Section 2 (b) of foreign exchange regulation ACT, 1973 states: Foreign exchange means foreign currency and includes: All deposits, credits and balance payable in any foreign currency and any draft, travelers cheques, letter of credit and bills of exchange. Expressed or drawn in India currency but payable in any foreign currency. Any instrument payable, at the option of drawer or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other. In order to provide facilities to members of the public and foreigners visiting India, for exchange of foreign currency into Indian currency and vice-versa. RBI has granted to various firms and individuals, license to undertake money-changing business at seas/airport and tourism place of tourist interest in India. Besides certain authorized dealers in foreign exchange (banks) have also been permitted to open exchange bureaus. Following are the major bifurcations: Full fledge moneychangers they are the firms and individuals who have been authorized to take both, purchase and sale transaction with the public. Restricted moneychanger they are shops, emporia and hotels etc. that have been authorized only to purchase foreign currency towards cost of goods supplied or services rendered by them or for conversion into rupees. Authorized Dealers they are one who can undertake all types of foreign exchange transaction. Bank are only the authorized
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Features of Forex Market: One unique aspect of this international market is that there is no central marketplace for currency exchange. Rather, trade is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week. Currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - across almost every time zone. This means that when the trading day in the U.S. ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.
1.3 Scope of the Study The scope of the study is restricted to the Jalandhar district only. In this era it is very imperative to know about the customer satisfaction about a particular product or services in order to improve the quality of product services. So that business can sustain in the market. With their money consumers elect the retailers, and if they are not satisfied by the service of one company they will surely go and use the same service provided by the other company where they are satisfied. So ultimately, Consumers determine which companies will survive in the market, and which will go out of business.
Significance of the Study Only customers can determine the fate of the company; that means only customers determine which organizations will survive and which one will fail. After knowing the customer satisfaction level; the company can know with which services the customers are most satisfied and which services need improvement at Capital Local Area Bank which provides foreign exchange services for the retailers well as whole sale customers.
Need for the Study: A foreign exchange market exists wherever one currency is traded for another. Customers play a vital role in the increase of sales and in getting profits to the company. As competition in foreign exchange market is growing up day by day, every company needs to concentrate on each and every aspect of its activities. Customers should be satisfied with the foreign exchange rates, service quality, place where it is located, etc. So every company needs to know the satisfaction level of its customers; and try to reach expectations of the customers.
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CHAPTER 2 INDUSTRY PROFILE
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2.1 Banking Structure in India Problems in the banking sector can seriously affect the real economy, as has been experienced globally in the last few years. Therefore, a well-regulated banking system is a key comfort for local and foreign stakeholders in any country. Prudent banking regulation is recognized as one of the reasons why India was less affected by the global financial crisis. The Banking Regulation Act, 1949 defines a banking company as a company which transacts the business of banking in India. Banking is defined as accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise. Section 49A of the Act prohibits any institution other than a banking company to accept deposits from the public withdrawable by cheque. RBI is the apex regulator for banks. Banks can be broadly categorized as Commercial Banks or Co-operative Banks. Commercial Banks include: Public Sector Banks (SBI, SBI Associates and Nationalized Banks) Private Sector Banks (Old, New, Foreign and Local) Regional Rural Banks
Co-operative Banks include: Urban co-operative banks Rural / Agricultural co-operative banks. Banks which meet specific criteria are included in the second schedule of the RBI Act, 1934. These are called scheduled banks. They may be commercial banks or co-operative banks. Scheduled banks are considered to be safer, and are entitled to special facilities like re-finance from RBI. Inclusion in the schedule also comes with its responsibilities of reporting to RBI and maintaining a percentage of its demand and time liabilities as Cash Reserve Ratio (CRR) with RBI. Non-banking finance companies (NBFC) become a source of incremental finance. At times, they finance businesses which do not meet strict banking norms. NBFCs do not have access to cheap bank deposits from the public (in the form of savings account, current account etc. which are discussed in the next Chapter), although they can accept fixed deposits. Their cost of funds being higher than banks, their lending too tends to be at a higher rate. Yet borrowers access these funds, either because they are unable to mobilize funds from banks, or to fund their requirements beyond what they can mobilize from banks. NBFCs are particularly active in consumer finance and personal finance. Market Participants Unlike the equity market - where investors often only trade with institutional investors (such as mutual
funds) or other individual investors -there are additional participants that trade on the forex market for Page 12
entirely
different
reasons
than
those
on
the
equity
market.
Therefore,
it
is
important
to identify and understand the functions and motivations of the main players of the forex market. The Forex market is so complex that not only banks (AD1s) but AD2s, NBFCs, FFMCs deal in foreign exchange. The existences of these money changers make this market a very complex one.
Governments and Central Banks Arguably, some of the most influential participants involved with currency exchange are the central banks and federal governments. In most countries, the central bank is an extension of the government and conducts its policy in tandem with the government. However, some governments feel that a more independent central bank would be more effective in balancing the goals of curbing inflation and keeping interest rates low, which tends to increase economic growth. Regardless of the degree of independence that a central bank possesses, government representatives typically shave regular consultations with centralbank representatives to discuss monetary policy. Thus, central banks and governments are usually on the same page when it comes to monetary policy. Central banks are often involved in manipulating reserve volumes in order to meet certain economic goals. For example, ever since pegging its currency (the Yuan) to the U.S. dollar, China has been buying up millions of dollars worth of U.S. treasury bills in order to keep the Yuan at its target exchange rate. Central banks use the foreign exchange market to adjust their reserve volumes. With extremely deep pockets, they yield significant influence on the currency markets.
Banks and Other Financial Institutions In addition to central banks and governments, some of the largest participants involved with forex
transactions are banks. Most individuals who need foreign currency for small-scale transactions deal with neighborhood banks. However, individual transactions pale in comparison to the volumes that are traded in the interbank market. The interbank market is the market through which large banks transact with each other and determine the currency price that individual traders see on their trading platform. These banks transact with each other on electronic brokering systems that are based upon credit. Only banks that have credit
relationships with each other can engage in transactions. The larger the bank, the more credit relationships it has and the better the pricing it can access for its customers. The smaller the bank, the less credit relationships it has and the lower the priority it has on the pricing scale. Banks, in general, act as dealers in the sense that they are willing to buy/sell a currency at the bid/ask price. One way that banks make money on the forex market is by exchanging currency at a premium to the price they paid to obtain it. Since the forex market is a decentralized market, it is common to see different banks with slightly different exchange rates for the same currency.
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Hedgers Some of the biggest clients of these banks are businesses that deal with international transactions. Whether a business is selling to an international client or buying from an international supplier, it will need to deal with the volatility of fluctuating currencies. If there is one thing that management (and shareholders) detests, it is uncertainty. Having to deal with foreign-exchange risk is a big problem for many multinationals.
For example, suppose that a German company orders some equipment from a Japanese manufacturer to be paid in yen one year from now. Since the exchange rate can fluctuate wildly over an entire year, the German company has no way of knowing whether it will end up paying more Euros at the time of delivery. One choice that a business can make to reduce the uncertainty of foreign-exchange risk is to go into the spot market and make an immediate transaction for the foreign currency that they need. Unfortunately, businesses may not have enough cash on hand to make spot transactions or may not want to hold massive amounts of foreign currency for long periods of time. Therefore, businesses quite frequently employ hedging strategies in order to lock in a specific exchange rate for the future or to remove all sources of exchange-rate risk for that transaction. For example, if a European company wants to import steel from the U.S., it would have to pay in U.S. dollars. If the price of the euro falls against the dollar before payment is made, the European company will realize a financial loss. As such, it could enter into a contract that locked in the current exchange rate to eliminate the risk of dealing in U.S. dollars. These contracts could be either forwards or futures contracts. Speculator Another class of market participants involved with foreign exchange-related transactions is speculators. Rather than hedging against movement in exchange rates or exchanging currency to fund international transactions, speculators attempt to make money by taking advantage of fluctuating exchange-rate levels .Some of the largest and most controversial speculators on the forex market are hedge funds, which are essentially unregulated funds that employ unconventional investment strategies in order to reap large returns. Think of them as mutual funds on steroids. Hedge funds are the favorite whipping boys of many a central banker. Given that they can place such massive bets, they can have a major effect on a countrys currency and economy. Some critics blamed hedge funds for the Asian currency crisis of the late 1990s, but others have pointed out that the real problem was the ineptness of Asian central bankers. 2.2 COMPANY PROFILE Capital Local Area Bank Limited, the largest Local Area Bank in the country started its operations on January 14, 2000. The Bank has been operating in the three contiguous Districts of Jalandhar, Kapurthala and Hoshiarpur in Punjab for the last 13 years with excellent performance in all spheres. The Reserve Bank of India in January 2013 has accorded the approval for expansion of area of operation of the Bank to two
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more Districts of Ludhiana and Amritsar in Punjab. This expansion will go a long way for the overall growth of the Bank. The Bank pioneered in bringing modern banking facilities to the rural areas at a low cost. In line with the objective for which the Local Area Banks have been set up, the Bank focused on promoting Financial Inclusion in the area of operation since inception by providing easy access to the masses to banking services. The aim of the Bank to provide credit for viable economic activities and deploy funds in the area of operation only, has accredited it with the highest Credit Deposit Ratio and a role model Banking Institution for economic development of the area. The total business of the Bank at present is over Rs.1650 crores with a satisfied customer base of more than 2,09,000. With an objective to serve the masses, the Bank has opened 29 branches (14 rural, 12 semi urban and 3 urban). The Bank has more than 80% of its business in rural and semi urban areas with credit exposure of more than 32% in Agriculture. Exposure to Micro and Small Enterprises constitutes 16% of Net Bank Credit. The tremendous performance of the Bank is evident from the fact that most of its rural and semiurban branches have become the largest credit branches in their respective areas in this short span. The Bank is in the process of opening five new branches with one each in Ludhiana and Amritsar cities. The business of the Bank has been projected to grow to Rs.1965 crores by March 31, 2014 and to Rs.2350 crores by March 31, 2015 with 40 branches across all the five districts of area of operation of the Bank. FINANCIAL INCLUSION Going ahead with the national agenda to provide banking services in every unbanked village having population of 2000 and above, the Bank has voluntarily adopted 10 villages in the first phase out of 178 such villages identified in the area of operation of the Bank. The Bank has taken the lead in its area of operation with extension of Banking Services in these centers through Business Correspondent Model by opening 10 Suvidha Kendras (Brick & Mortar BC outlets) as against only 1 unbanked village allocated by SLBC. In a short span, the Bank has been able to generate a total business of Rs.71.91 crores through these Suvidha Kendras by opening 13059 number of accounts. The No-Frill Accounts of the Bank constitute 25% of the total Savings Bank accounts of the Bank. FEATURES 7 day branch banking. Uninterrupted & extended banking hours -Monday to Friday (9.30 a.m. to 6.00 p.m.)
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-Saturday & Sunday (9.30 a.m. to 2.00 p.m.) State-of-the-art Branch Interiors. ATM Card acceptance at more than 115000+ ATMs across India on RuPay Network. Internet banking. Mobile banking. Locker Operation 7 Days a week. All kinds of loans at competitive Interest rates. ACHIEVEMENTS Pioneer in bringing state-of-the-art banking facilities in rural areas at a low cost. Promoting Financial Inclusion in area of operation since the inception by providing easy access to masses to banking services. Extension of banking services to the unbanked villages through Suvidha Kendras (Brick & Mortar B.C. outlets). 7 day branch banking from day one with extended and uninterrupted banking hours. Accredited with ' ICAI Award for Excellence in Financial Reporting ' for 2 consecutive - years [2008 & 2009]. State-of-the-art Branch Interior. Credit Deposit Ratio of 62% as against 35% in the area. ZERO Net NPA. Business CAGR of more than 22%. One-Stop Financial Hub in rural and semi urban areas. Contribution towards economic development and employment generation in the area. Surpassed National Targets in Priority Sector, Agriculture and Weaker Section Advances. ATM Card acceptance at more than 115000+ ATMs across India on RuPay Network. Internet and Mobile banking facility. Page 16
2.3 Retail Forex Market in Jalandhar

The forex market consists of two major parts namely trade forex and retail forex. Trade forex covers major portion of the foreign exchange transactions because of the involvement of large amounts for commercial purpose. Retail foreign exchange trading is a small segment of the larger foreign exchange market where individuals speculate on the exchange rate between different currencies. This segment has developed since the advent of the internet and dedicated electronic trading platforms that allowed individuals to access the global currency markets. In 2007 it had been speculated that volume from retail foreign exchange trading represents 5 percent of the whole foreign exchange market which amounts to $50100 billion in daily trading turnover. Prior to the development of forex trading platforms in late 1990s forex trading was restricted to large financial institutions. It was the development of the internet, trading software and forex brokers allowing trading on margin that started the growth of retail trading. Traders are able to trade spot
currencies with market makers on margin. Meaning they need to put down only a small percentage of the trade size and can buy and sell currencies in seconds. Retail forex trading has been promoted by some as an easy way to make profits and has thus been the focus for a number of foreign exchange frauds. In response financial regulators in a number of countries have introduced restrictions or provided warnings about this type of trading. However due to the decentralized nature currency trading and the easy global access to the internet a number of brokers are based in less restrictive jurisdiction.
2.4 FOREIGN EXCHANGE SERVICES AT CAPITAL LOCAL AREA BANK
INTRODUCTION Capital Local Area Bank is now extending foreign exchange services to our retail customers. FES Business will provide a broad spectrum of travel related foreign exchange and other non- trade related remittances. In continuation of our efforts to make life of our customers truly Jiyo Easy! , Capital Local Area Banks FES business offers a range of foreign currency products and services to make travel, remittance and payments across borders easier.
CURRENCIES THAT CAPITAL LOCAL AREA BANK WILL DEAL IN Capital Local Area Bank will currently deal in the following 13 currencies. They include 1. United States Dollars (USD), 2. Japanese Yen (JPY), 3. Swiss Francs (CHF), 4. Canadian Dollar (CAD), Page 17
5. Sterling Pound (GBP), 6. Swedish Kroner (SEK), 7. Saudi Rial (SAR), 8. Hong Kong Dollar(HKD), 9. Singapore Dollar (SGD), 10. Euro (EUR) 11. Danish Kroner (DKK), 12. Australian Dollar (AUD), 13. New Zealand Dollar (NZD).
PRODUCTS OFFERED Products offered to retail customers under the umbrella of FES are: Foreign currency banknotes: Purchase and Sale of Bank Notes available in major currencies in various denominations from customers travelling on business, leisure, education, immigration, medical treatment etc. Travellers cheques: Instrument which is similar to bearer cheque. You need not convert the same to cash, but can use it across the counters at shops, hotels and other establishments. Capital Local Area shall provide TC of American Express in all major currencies through our network of branches. Available in six currencies namely US Dollars, Euro, British Pound Sterling, Canadian Dollar, Australian Dollar , and Japanese Yen. Usage Guidelines. Sign your cheques immediately at the upper left hand corner Keeps the purchase receipt (PAF) mentioning the TC Nos. separately from travelers cheques. At the time of encashing the traveler's cheques, sign at the bottom left hand corner Make note of the Traveler's cheque Nos. as and when it is encashed.
Forex travel card: Travel card is a prepaid card which is issued to an individual travelling abroad. These are used for making payments at overseas merchant establishments and also for drawing cash from ATM terminals. Travel card products are available in three major currencies including US Dollar, Great Britain Pound and Euro. Operating on the VISA platform, these cards are accepted at over 10 million Visa Electronic Merchant shopping establishments, in addition to providing access to local currency through 8, 00,000 self-owned and affiliated ATMs worldwide.
Security Features
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Forex Prepaid Card is protected by 4 digits secured PIN (Personal Identification Number), which prevents anyone else from using the card, even if it is lost or stolen. Such PIN are provided to the card user in a sealed cover and not indicated in the card. Other features These cards can be used anywhere in the world other than India, Nepal and Bhutan. These can be converted into destination currency Cards can be reloaded for additional value Cards usage statement can be accessed through net. Balance amount in the card can be encashed on return or can be used for future travel In case of loss of card, emergency replacement card can be provided. Add-on cards also being provided, if required
Foreign currency demand drafts: Capital Local Area bank will offer foreign currency demand drafts (FCY DD) in favor of the beneficiary. Customers can send the FCY DD to the beneficiary who will receive the funds upon crediting the draft amount into his/her account abroad. Customers can now avail FCY DD facility to make payments for various purposes like: University fees abroad Application fees Living expenses Gift remittances Maintenance of close relatives abroad Medical treatment abroad And all other permitted purposes as per the RBI guidelines.
FCY Demand Drafts are issued in currencies such as United States Dollars (USD), Great Britain Pounds (GBP), EURO, Japanese Yen (JPY), Australian Dollars (AUD), Canadian dollars (CAD), New Zealand Dollars (NZD), Hong Kong Dollars (HKD), Swiss Francs (CHF) and Singapore Dollars (SGD).
Wire transfers: Customer can send money overseas to their relatives or friends in major currencies through SWIFT transfer facility in place of FCY DD. It is one of the safest and most convenient ways to send money abroad.
Travel Insurance: Capital Local Area Bank will also offer travel insurance at very competitive rates offering various health / accident coverage for travel to all countries
KYC/SCREENING REQUIREMENTS FOR ALL TYPES OF DEALS AND CUSTOMERS Page 19
Ensure that all KYC requirements of the bank is met as per existing policy. All FES customers/business partners/agents are to be screened on Compliance Enquirer before deals are closed.
1. For individuals: Transactions of all individuals, including walk-ins, customers of travel agents, students, retail chains, etc will undergo pre-transaction screening using Compliance Enquirer at the branch by staff handling FES transactions.
2. For Corporates: The acceptance of all corporate accounts which are in the final stages of deal finalization will be routed through ASFM (AML, Sanctions and Fraud Monitoring) team, who upon verification of the company will confirm if pre transaction screening of individual customers is required. ASFM will be given a TAT of 3 days to revert to the FES team. For those corporate accounts which are accepted by ASFM, pre-transaction screening will be waived. However, it must be noted that these corporate customers will continue to be subject to day end screening. For all other corporate accounts, customers will be treated as normal individual customers and pre-transaction screening will be performed. All individual corporate customers will be screened using Compliance Enquirer at the branch by staff handling FES transactions.
3. Pre- transaction screening: Pre- transaction screening involves the use of a web based application called Compliance Enquirer (CE). The branch official will verify if the customers name is on any restricted party list using this application. The branch will have to maintain the screenshots of verification done as a part of the transaction documentation. In case of any hits as a result of screening in CE, the concerned branch will have to refer the case to the FES Business team (Level 1 alert handling). The decision for these alerts will be taken by the FES Business team. The branch can process the transaction only after receiving the approval from the FES Business team. The FES Business team will provide a weekly MIS to the ASFM on the alerts referred. In case of doubt as a part of the escalation process the FES Business team should refer the alert to the Sanctions team (Level 2 alert handling). The TAT for ASFM reply would be 1 hour. All alerts referred to the ASFM team can be processed only after receiving their approval.
4. Process for screening for Haj: Screening of all Haj customers is waived as an exception, given that the list of all Haj customers is provided to the Bank by the Haj Committee which is a constitutional body. Transactions that are being proposed is for generation of small value foreign currency drafts on behalf of individuals for the payment of their boarding and lodging during the Haj. The funds will be Page 20
transferred by the Haj committee and the Bank in turn will generate the drafts and provide the drafts to the Haj Committee.
5. Day End Screening: The complete customer database in FES will be part of the day end screening process of the Bank. Any true hits in the screening process will be escalated to the FES Head.
6. Date of Birth: The date of birth of all clients will be captured on the FES application to facilitate the alert handling process.
7. User Guidelines: User guidelines for screening through Compliance Enquirer can be seen in Annexure 2.
8. Remittances screening: In case of all types of remittances made by the bank, compliance screening must be done for both applicant as well as beneficiary by staff handling FES transactions
9. Influencing Agent Screening: Before transacting with influencing agents and creating the master code in FES System, FES CPU shall screen all requests from FES Sales staff on Compliance Enquirer.
CRITICAL POINTS TO NOTE No deals to be done where countries categorized as Ultra High Risk Countries (UHRC) are involved. IVBLs High Risk Country Policy prohibits transactions with Cuba, Iran, Myanmar, North Korea, Sudan and Syria. All customers to be screened on compliance enquirer and necessary KYC documentation to be obtained. Screenshots to be maintained along with documentation. Photocopies of all original documents to be stamped Originals Seen and Verified and initialed by branch staff. All FES related documentation should be retained by the branch permanently.
RSC RATE APPROVAL PROCESS
Branch cannot input deals for transaction equal to or above USD 5000 or equivalent. Further they will have to contact RSC for rates beyond their approval limits. RSC to receive the phone request followed up by mail request from the branch for fine rates beyond branch powers. Page 21
If rate falls within RSC's band, RSC to provide rate to the branch If rate does not fall within RSCs band, RSC to obtain approval from concerned authority per approval grids on mail. Each RSC can input deals in CREDENCE for all the branches in his/her region. RSC will input deal in system according to rate offered to the branch within their rate bands. Branch can pick up the deal and utilize the same at their end.
Revert to BH on the rate which has been given/confirmed over phone. Ensure that all approvals are marked to BH and approvals email id so that branch has a record of the same to meet audit requirements. RSC to inform branches that rates may vary depending on market movements
MODE OF PAYMENT PROCESS Branches may receive payment for foreign exchange sales in the following modes: Cash: Payment can be accepted by cash for transactions less than USD 1000 CCM to generate payment voucher in triplicate CCM to direct customer to make INR payment at the teller counter CCM to handover payment voucher in duplicate to the teller with details of INR amount to be deposited One voucher to be retained with CCM for records Teller will receive payment from the customer as per details mentioned in the voucher Teller to stamp and sign the customer copy of voucher and handover the same to the customer CCM to check in Profile whether payment has been received Handover foreign currency as per requirement post release of payment
Account Debit: Where customer has an Capital Local Area Bank account, CCM to debit required amount in Profile from the customers account CCM to check in FES Suspense account whether payment has been received Handover foreign currency as per requirement post release of payment
Other bank DD/cheque: Large portion of FES clients would be non-constituents of the Bank and the best way to receive payments from them would be in the form of DDs as verification with the issuing bank is easy. However, the risk of the DD being stolen or forged still remains. To mitigate this risk, verification with the Issuing Bank is essential for high value DDs.
The Verification & Approval Grid for DD purchase is as follows: Page 22
Amount of DD purchased Rs. Lakhs Up to 2 >2 up to 5 >5 up to 10 >10 up to 50 No verification required BOSH BOSH BOSH BOSH Branch Head ROSH/ Regional Sales Manager- FES NOSH/ Head FES in Verification (Call back) by Approval Authority
Delegation of Powers(DOP)
DOP for One-Off Cheque Purchase Generally, cheque purchase will not be permitted for non-constituent customers of the Bank. Depending on the Net Worth and social standing of the individual, one-off cases can be permitted by Head-FES and HeadCA-RB jointly. This should be an exception rather than a regular occurrence, as RBI restricts cheque purchase for non-constituents. For existing Customers (SB, CA, OD account holders of the Bank), one-off cheque purchase is permitted and shall be done subject to the guidelines of the Bank. Rules for DD purchase If there were any issues in the past in purchase and realization of DDs issued from some Bank, the same should not be purchased without permission of Head-FES. DDs of ALL Co-operative Banks shall not be purchased. Only local DDs will be purchased. Out-station DDs will be taken only subject to realization. DDs that are beyond the value of Rs.50 Lakhs shall not be purchased. They will have to go for collection. Rules for Cheque Purchase Out-station cheques will not be purchased. Repetitive purchases will not be entertained for the same Customer. It would be only on collection basis. For cheque purchase of individuals, CIBIL check has to be conducted.
Process for DD Purchase When a DD is received from a Customer desiring to buy Foreign Currency or Travelers Cheque or Pre-paid cards or Foreign Currency DDs (FCY-DD) or Telegraphic Transfers (TTs) the following process has to be followed: o Basic information is fed into Credence (Passport number, Name and Address) and checked as to whether the DD amount is within caps stipulated by RBI Guidelines for travel, education, Page 23
etc. If it is beyond the caps, the Sale cannot proceed. If it is within the caps, further processing happens. o The DD Verification and DD Purchase Authorization form is filled after verifying the Passport details, conducting a telephonic verification with the DD Issuing Bank. It is forwarded to the Appropriate Authority as per the Grid for approval. o Once Approval is received from the Approval Authority over Mail, the same is printed and filed along with the documents collected and the remaining details are entered into Credence as an Ad hoc Transaction. o The necessary Accounting Entries are passed by Credence and on a daily basis such entries move to Profile at GL level. o All DD Purchased to be recorded in the DD purchased register and followed up for recovery.
Process for Cheque Purchase Cheque purchase authorities will be same as that existing for clients. However, this will be only for existing clients of the Bank. Purchase will be done only after ascertaining the balance in the account.
KYC/ AML Compliance KYC /AML compliance should be ensured as per the Banks Policy as well as RBI directives. As Customers from whom DD/ Cheque is being purchased is not a constituent of the Bank, extra care has to be taken as the comforts of the regular KYC compliance checks are not available. The Passport is an important document for ensuring KYC/AML compliance. Thus, through verification of the Passport has to be ensured. The Profile of the Customer has to be prepared and scrutinized. The information sought should relate to his identity, source of funds, social / financial status, nature of business activity, etc. The information sought from the Customer should cover only information that is relevant to the risk category of the Customer. The nature and extent of Due Diligence will depend on the risk perceived by the Bank. Well known, high Net Worth individuals can be categorized as Low Risk and due diligence need not be so rigorous.
FOREIGN EXCHANGE PURCHASE
WALK IN CLIENTS ELIGIBILTY Any Indian Resident Foreign Nationals/Tourists Non Resident Indian
Guidelines for retail foreign exchange encashment Page 24
1. For encashment of foreign currency notes and/or Travelers Cheques up to USD 500 or its equivalent, production of passport need not be insisted upon and any other suitable document of identification like ration card, driving license etc. can also be accepted. 2. For verification of the identity of customer for encashment in excess of USD 500 or its equivalent, a photo identity document such as passport, driving license, PAN Card, voter identity card issued by the Election Commission, etc. should be obtained. 3. Requests for payment of sale proceeds in cash may be acceded to the extent of USD 1000 or its equivalent per transaction. Requests for payment in cash by foreign visitors / Non-Resident Indians may be acceded to the extent of US $ 3000 or its equivalent. All encashment within one calendar month may be treated as single transaction for the purpose. In all other cases the payment should be made by way of "Account Payee" cheques / demand draft only. 4. Where the amount of forex tendered for encashment by a non-resident or a person returning from abroad exceeds the prescribed limit of USD 10000 (Both Currency and TCs together) or cash currency beyond USD 5000 equivalent production of Currency Declaration Form (CDF) should invariably be insisted. In case of foreign exchange purchases the following precautions should be taken: Foreign currency bank notes and / or TCs beyond USD 10000 should not be accepted unless accompanied by currency declaration form that is duly stamped by customs at the airport. Coins will not be accepted. Currency Declaration Forms should be endorsed and returned back to client, if the balance amount in the CDF is nil then the CDF should be retained. It should be ensured that TCs are purchased on the basis of Watch & Compare i.e. the customer must sign TCs in the presence of Bank Officer. The original and counter signatures should invariably match with each other as also with passport and purchase agreement form. TC encashment requires signatures duly checked with original counter signatures on TCs plus those on the passport. In cases of doubt or while encashing large amounts counter teller must ask for purchase agreement form. Authorization should be taken from the issuer of TCs. This Facility is available with AMEX, In case of Master & Visa since VISA / MASTER that no longer issue TCs, more care is required and where ever in doubt, TCs encashment should be taken on collection basis. Check for the authenticity that bank notes are not counterfeit, mutilated or de-monetized Lodge the transaction in the system and handover the Encashment Certificate (Bordeaux) to the client. In case of NRIs the encashment certificate to be super scribed Not to be deposited in NRE a/c.
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Encashment Amount for FCN/TC's Identification Documents
Up to US $ 500 or equivalent
Excess of US $ 500 or equivalent
Production of passport need not be Photo identity document such as insisted upon and any other suitable passport, driving license, PAN document of identification like Card, voter identity card issued
ration card, driving license etc. can by the Election Commission, etc. also be accepted. should be obtained.
Encashment certificate to be issued in all cases, whether asked for or not. Passport number, nationality, reason for encashment, to be noted on Encashment Certificate. The Encashment Certificate to contain a declaration to be signed by the client that he/she is surrendering the unutilized portion of foreign exchange is with in period of sixty day from the date of its purchase. The signatures of the beneficiary to be taken on encashment certificate & in case of NRIs /foreign nationals, the local address also to be noted on the encashment certificate.
KYC FOR ENCASHMENT
Identification Documents for Purchase of Foreign Currency Notes & Travelers Cheques Documents for Identification of Customers Amount Less than US $200 or equivalent Between US $200 to US $ Above US $ 2000 or 2000 or equivalent Identificati Photocopies of the Identification Photocopies on document need not be kept on identification of equivalent the Photocopies of the
document identification
document
Documents record. However, full details of the should be maintained for one should be maintained for a Required identification document should be year and completion of minimum period of five years.
maintained in a separate register / statutory audit. system. Limits for Encashment of Foreign Currency Notes/ Travelers Cheques
Sale Proceeds Payment To
Indian Resident
Foreign Visitors/ NRI's Cash may be acceded to the extent of US $ 3000 or its equivalent. Payments for Any amount higher than that should Page 26
Cash may be acceded to the extent of USD 1000 or its equivalent per transaction.
Cash Proceeds / Cheque Payments
Amounts higher than Rs. 50000
Sale Proceeds Payment To
Indian Resident should be paid by credit to clients account/ issuance of a DD/BC. All encashment within one
Foreign Visitors/ NRI's be made by DD/BC or credit to the clients account. All encashment within one month may be treated as single transaction for the purpose . In all other cases the payment should be made by way of "Account Payee" cheque,
month may be treated as single transaction for the purpose. In all other cases the payment should be made by way of "Account Payee" cheque,
demand draft or credit to the clients account maintained
demand draft or credit to the clients account maintained with our bank.
with our bank. Where the amount of forex tendered for encashment by a non-resident or a person
returning from abroad exceeds the limits prescribed for Form
Currency
Declaration
(CDF), production of CDF should invariably be insisted.
RATE APPLICABLE 1. Rates to be applied shall be as per the card rates, Fine rates will be offered as approval grid. 2. PAYMENT MODE For Indian National Up to Rs. 50000 in cash, in case of the amount is higher than the entire amount by way of bankers Cheques/ DD/ Credit to his account maintained with us/RTGS to other bank accounts For foreign nationals / NRIs - INR cash can be paid for encashment up to USD 3000, any amount higher than that should be paid by way of bankers Cheques/ DD.
Purchase Authorized MONEY CHANGERS (AMCs) AND BANK Authorized Money Changers (AMCs) AND BANK.
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1. 2.
FFMCs- Full Fledged Money Changers Franchisee Franchises of Capital Local Area Bank authorized to carry out Restricted Money Changing Activities
3.
Franchises of Others Franchises of other Banks and FFMCs authorized to carry out Restricted Money Changing Activities
4. 5.
Authorized Dealer Banks. Restricted Authorized Dealers- Wall Street Finance, Thomas Cook, Centrium Forex.
Client (FFMCs / Banks / Hotels only) Empanelment Formalities Dealing with client should be subject to completion of Know Your Customer (KYC) formats/undertaking. . KYC of all FFMCs & Franchises of Other FFMC & Banks have to be done at branch level and is the responsibility of the relationship executive and the branch head / Regional Sale Manager to get all KYC formalities completed for each client. All KYC documents sit at respective branches and in branch managers custody. As per the new KYC guidelines, the stress will be more on our internal assessments based on license verifications, analysis of client's dealings and market reputation. In cases of clients that are exchange companies, all efforts should be made for them to have account relation with our bank, however should not be treated as pre condition.
Procedure for purchase of Banknotes from exchange companies (EC) and Banks (ADs) at the branch counters 1. Currency can be accepted from only from approved ECs and ADs; normally coins will not be accepted. 2. Usually exchange companies send their representative to our designated branches while our Sales staff reaches out to other banks (ADs) for purchase of currencies. 3. The exchange companies from whom we would buy currencies would be empanelled by us and signatories of their authorized representatives held on record 4. The executive of client (ECs) that comes to deliver currencies should be in the list of authorized signatories furnished by the Client. 5. Currency should be accepted & counted in front of the client. 6. Check for the authenticity of bank notes for counterfeit, etc 7. Soiled, torn or demonetized bank notes in permissible currencies can be accepted only after confirmation from the RSM who would seek such confirmation from export centre or taken in collection.
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8. The export centre will ensure that each soiled, torn or demonetized note is confirmed to be acceptable to the overseas counterparty before accepting the note and quoting a rate. 9. Physical currencies should tally with the currencies mentioned in the Encashment certificate of the client. 10. Rate for ECs and ADs these are not card rates but driven by rate grids for wholesale purchases 11. Once the currencies are counted & Rates are fixed, purchase memo should be made through front office software and handed over to the client. 12. Our counter executive should sign on the purchase memo and also on the clients sales memo and stamp the same. 13. Clients sales memo should be signed by the offloading clients authorized executives and stamped. 14. In case of a currency / TC purchases from a Bank or a hotel where our bureau staff has to move out of branch, he / she must obtain signature and stamp on banks manual purchase memo from authorized signatory of the client. 15. All such manual bills should be entered into the front system immediately upon return to office. Bureau In charge has to then ensure that our banks manual purchase memo is attached with the computerized purchase.
FOREIGN EXCHANGE SALES
1. PERSONAL / LEISURE VISIT
Product: Bank Notes, Travelers cheques and Forex Travel Card
Eligibility Resident Indian Nationals. Foreign Nationals permanently residing in India are also eligible to avail this quota provided the applicant is not availing of facilities for remittance of his/her salary, savings etc. abroad in terms of the existing FEMA regulations. Foreign born wife of an Indian national. Children endorsed on parents passport are also eligible for full entitlement.
Quantum of exchange Up to a total of US$ 10,000 or its equivalent per resident individual in a financial year of which maximum of US$ 3,000 in Currency notes per visit and rest in Travelers cheques / Travel card for all the countries except for travel to Iraq, Libya, Islamic Republic of Iran, Russian Federation and other Page 29
Republics of Commonwealth of Independent States. Individuals traveling to countries like Nepal & Bhutan are not eligible to withdraw foreign exchange under this scheme. For Travelers proceeding to Iraq or Libya, foreign exchange in the form of currency notes may be sold up to limit not exceeding US$ 5,000 or its equivalent per resident individual in a financial year. For Travelers proceeding to the, Russian Federation and other Republics of Commonwealth of Independent States, entire foreign exchange can be released in the form of currency notes. Travelers proceeding to Pakistan, Bangladesh by land route are eligible up to limit of US$ 10,000 of foreign exchange or its equivalent per resident individual in a financial year. Foreign exchange quota for personal visit can be availed over and above the specified amount under all other schemes for release of foreign exchange. Rates Application: Deals greater than or equal to USD 5000 or equivalent cannot be inputted by the branch and must be inputted by the Regional Sales Coordinator. FES System (Credence) will not allow branches to input the same. Branches need to pull the deal inputted by the RSC and utilize the same at their end. Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a daily basis by the treasury. Card rates may change and treasury will update branches with fresh rates. In case of fine rates, approval to be taken in accordance of approval grid. For rate requests falling within the branchs powers, branch may offer better rates to the customer These powers have to be exercised by the branch judiciously depending on the relationship of customers. Branch has to ensure that for all improvements in exchange rates within their authority are done with proper approval as per the grid and kept on record. Annexure 1 Approval Grids For rate requests that fall above the branch grids, branch to refer the same to their respective Regional Sales Coordinator(RSC) Branch CCM to keep customer informed that the rates mentioned are purely indicative and are subject to intraday changes based on changes in market levels Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to close at their end.
2. BUSINESS VISIT
Product: Bank Notes, Travelers cheques, Forex Travel Cards.
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Eligibility International business travel sponsored by firms/companies/organization in India. Participation in International conferences / seminars which are of a scientific, technical or educational nature. Specialized training/study tour sponsored by institutions or undertaken by professionals like Doctors.
Rates Application: Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a daily basis by the treasury. Card rates may change and treasury will update branches with fresh rates. In case of fine rates, approval to be taken in accordance of approval grid. For rate requests falling within the branchs powers, branch may offer better rates to the customer These powers have to be exercised by the branch judiciously depending on the relationship of customers. Branch has to ensure that for all improvements in exchange rates within their authority are done with proper approval as per the grid and kept on record. For rate requests that fall above the branch grids, branch to refer the same to their respective Regional Sales Coordinator(RSC) Branch CCM to keep customer informed that the rates mentioned are purely indicative and are subject to intraday changes based on changes in market levels Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to close at their end.
Quantum of Exchange Up to US$ 25,000 per business trip, irrespective of period of stay and number of times in a financial year. Release of foreign exchange beyond US$ 25,000 for a single business visit requires prior approval of RBI. Foreign Exchange may also be released to foreign nationals if the visit is sponsored by the company/ firm/organization in India where they are employed on regular basis. If a passenger plans to club both Conference and business visit together, the entitlement remains only up to a maximum of US$ 25,000. Personal Visit entitlement can be availed over and above the specified amount under this scheme.
Rates Application:
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Deals greater than or equal to USD 5000 or equivalent cannot be inputted by the branch and must be inputted by the Regional Sales Coordinator. FES System (Credence) will not allow branches to input the same. Branches need to pull the deal inputted by the RSC and utilize the same at their end. Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a daily basis by the treasury. Card rates may change and treasury will update branches with fresh rates. In case of fine rates, approval to be taken in accordance of approval grid. For rate requests falling within the branchs powers, branch may offer better rates to the customer These powers have to be exercised by the branch judiciously depending on the relationship of customers. Branch has to ensure that for all improvements in exchange rates within their authority are done with proper approval as per the grid and kept on record. Annexure 1 Approval Grids For rate requests that fall above the branch grids, branch to refer the same to their respective Regional Sales Coordinator(RSC) Branch CCM to keep customer informed that the rates mentioned are purely indicative and are subject to intraday changes based on changes in market levels Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to close at their end.
3. IMMIGRATION
Product: Bank Notes, Traveler Cheques, Forex Travel Cards, Telegraphic Transfer and Demand Draft
Eligibility Resident Indian proceeding for permanent immigration abroad.
Rates Application: Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a daily basis by the treasury. Card rates may change and treasury will update branches with fresh rates. In case of fine rates, approval to be taken in accordance of approval grid. For rate requests falling within the branchs powers, branch may offer better rates to the customer These powers have to be exercised by the branch judiciously depending on the relationship of customers. Page 32
Branch has to ensure that for all improvements in exchange rates within their authority are done with proper approval as per the grid and kept on record. For rate requests that fall above the branch grids, branch to refer the same to their respective Regional Sales Coordinator(RSC) Branch CCM to keep customer informed that the rates mentioned are purely indicative and are subject to intraday changes based on changes in market levels Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to close at their end.
Quantum of Exchange Up to US$ 100,000 per person or the amount prescribed by the country of emigration, subject to production of documentary evidence in support. For drawing exchange beyond this amount, prior approval of RBI required. Personal Visit can be availed over and above the specified amount under this scheme.
4. EMPLOYMENT Product: Bank Notes, Traveler Cheques, Forex Travel Cards, Telegraphic Transfer and Demand Draft.
Eligibility Resident Indians going abroad for employment.
Quantum of Exchange Up to US$ 100,000 per person going abroad for employment. For drawing exchange beyond this amount, prior approval of RBI is required. Personal Visit can be availed over and above the specified amount under this scheme.
Rates Application: Deals greater than or equal to USD 5000 or equivalent cannot be inputted by the branch and must be inputted by the Regional Sales Coordinator. FES System (Credence) will not allow branches to input the same. Branches need to pull the deal inputted by the RSC and utilize the same at their end. Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a daily basis by the treasury. Card rates may change and treasury will update branches with fresh rates. Page 33
In case of fine rates, approval to be taken in accordance of approval grid. For rate requests falling within the branchs powers, branch may offer better rates to the customer These powers have to be exercised by the branch judiciously depending on the relationship of customers. Branch has to ensure that for all improvements in exchange rates within their authority are done with proper approval as per the grid and kept on record. Annexure 1 Approval Grids For rate requests that fall above the branch grids, branch to refer the same to their respective Regional Sales Coordinator(RSC) Branch CCM to keep customer informed that the rates mentioned are purely indicative and are subject to intraday changes based on changes in market levels Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to close at their end.
5. STUDIES ABROAD Product: Bank Notes, Traveler Cheques, Forex Travel Cards, Telegraphic Transfer and Demand Draft. Eligibility Resident Indian going abroad for studies. Students holding Indian passports, who had earlier gone abroad for pursuing studies without availing of exchange, can avail foreign exchange for the balance period of the course. Students holding foreign passports dependent on their parents resident in India.
Quantum Of Exchange: US$ 100,000 per annum towards tuition fees, maintenance expenses books, etc. Foreign Exchange in excess of US$ 100,000 (at actual) per academic year may be released to the extent of the requirement of foreign exchange indicated in the letter from the overseas institution/university. Foreign Exchange may be released in the form of currency notes not exceeding US$ 3,000 and balance amount may be released in the form of Prepaid Forex Travel Card, Travelers Cheques/Demand Draft/TT in favor of the student or the educational institution, as directed by the applicant. Students going to Russia to other CIS countries, foreign exchange may be released in the form of currency notes for a period up to one year. Personal Visit entitlement can be availed over and above the specified amount under this scheme.
Rates Application:
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Deals greater than or equal to USD 5000 or equivalent cannot be inputted by the branch and must be inputted by the Regional Sales Coordinator. FES System (Credence) will not allow branches to input the same. Branches need to pull the deal inputted by the RSC and utilize the same at their end. Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a daily basis by the treasury. Card rates may change and treasury will update branches with fresh rates. In case of fine rates, approval to be taken in accordance of approval grid. For rate requests falling within the branchs powers, branch may offer better rates to the customer These powers have to be exercised by the branch judiciously depending on the relationship of customers. Branch has to ensure that for all improvements in exchange rates within their authority are done with proper approval as per the grid and kept on record. Annexure 1 Approval Grids For rate requests that fall above the branch grids, branch to refer the same to their respective Regional Sales Coordinator(RSC) Branch CCM to keep customer informed that the rates mentioned are purely indicative and are subject to intraday changes based on changes in market levels Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to close at their end.
6. MEDICAL Product: Bank Notes, Traveler Cheques, Forex Travel Cards, Telegraphic Transfer and Demand Draft. Eligibility Resident Indian going abroad for Medical Treatment /Check Up. Must be suffering from an ailment requiring specialized treatment abroad. Resident Indian fallen sick after proceeding abroad. Accompanying as attendant.
Quantum of Exchange For patient Hospitalization Up to US$ 100,000 its equivalent for the patient going abroad for medical treatment or check up abroad.
For the attendant Page 35
Up to US$ 25,000 for accompanying as attendant to a patient going abroad for medical treatment/check up. Personal Visit entitlement can be availed over and above the specified amount under this scheme. For release of foreign exchange for meeting expenses for medical treatment /check up abroad exceeding US$ 100,000, prior approval of RBI is required.
Rates Application: Deals greater than or equal to USD 5000 or equivalent cannot be inputted by the branch and must be inputted by the Regional Sales Coordinator. FES System (Credence) will not allow branches to input the same. Branches need to pull the deal inputted by the RSC and utilize the same at their end. Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a daily basis by the treasury. Card rates may change and treasury will update branches with fresh rates. In case of fine rates, approval to be taken in accordance of approval grid. For rate requests falling within the branchs powers, branch may offer better rates to the customer These powers have to be exercised by the branch judiciously depending on the relationship of customers. Branch has to ensure that for all improvements in exchange rates within their authority are done with proper approval as per the grid and kept on record. Annexure 1 Approval Grids For rate requests that fall above the branch grids, branch to refer the same to their respective Regional Sales Coordinator(RSC) Branch CCM to keep customer informed that the rates mentioned are purely indicative and are subject to intraday changes based on changes in market levels Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to close at their end.
7. GOVERNMENT OFFICIALS
Eligibility Member of Parliament / State Legislatures with Letter of sanction in original from Ministry of Finance, (Department of Economic affairs). Official of Central / any State Government with Letter of sanction in original from Administrative Ministry of Government of India (Central Government Employee).
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Members of Official / non official delegations financed out of central fund / state government with letter of sanction in original from Government of India (In case of Official of State government, Members of Parliament and State Legislature).
Official in the office of Comptroller and Auditor General (C&AG) of India deputed abroad with Letter of sanction in original from C & AG office.
Quantum of Exchange Up to US$ 25,000 per business trip, irrespective of periods of stay and number of times in a financial year. Personal Visit entitlement can be availed over and above the specified amount under this scheme.
8. MAINTENANCE OF CLOSE RELATIVES ABROAD
Product: Telegraphic Transfer and Demand Draft. Page 37
Eligibility Resident Indian sending remittance for maintenance of his/ her close relative abroad. Resident Indian * but not permanently residing in India sending remittance for maintenance of his/ her close relative abroad. Any individual resident in India on account of his employment or deputation of a specified duration (irrespective of length thereof) or for a specific job or assignment, the duration of which does not exceed three years, is a resident Indian but not a permanent resident.
Quantum of Exchange Up to US$ 100,000 per remitter / applicant per annum. For drawing exchange beyond this amount, prior approval of RBI is required.
9. CASH TO MASTERS TRANSACTIONS PROCESS (CTM) OF SHIPPING COMPANIES
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Product: Bank Notes Background Often, foreign ships travel through India and dock their vessels at various ports / harbors in the country. One of the major requirements during such temporary stays is of Foreign Currency Notes that has to be made available to the Captain of the Ship for covering crew wages or for other expenses on board. These requirements are usually met through a facility called "Cash to Master". To collect this cash, the master of the ship has to either approach the FES location or Foreign exchange gets delivered by FES staff at the designated port. Beneficiary master has to submit copy of his passport and a duly filled up application form to avail the CTM amount. This product is available only in United States Dollars, Pounds Sterling and Euro.
Transaction process Cash To Masters Transactions (CTM)
Shipping Companies worldwide operate through their agents at respective ports. These shipping agents are the one which handle all requirements of the vessel at respective ports including the requirement of the vessel for foreign exchange. In order to deliver banknotes to the Master of the vessel, we first need to get a credit in our nostro for the amount of Foreign Exchange to be delivered plus the service charges. FES provides nostro details to the Indian Shipping agency that in turn deals with the parent company of the vessel and arranges to get the credit in our nostro along with the identification details of the master.
The amount of credit to be received is based on actual amount to be delivered plus the commission to be charged on the deal. The Overseas shipping company credits our nostro account and sends a SWIFT message (MT 103) copy to Indian Shipping Company which in turn forwards it to the designated FES location. On receipt of the SWIFT advice FES over mail informs the credits in the designated USD Nostro a/c to the concerned department of IVBL, who in-turn confirms the receipt of the actual funds from the overseas shipping company.
FES location over mail confirms Indian Shipping company about the receipt of the inward credit and re-confirms them about the FES charges and actual CTM amount to be delivered. Indian Shipping agency over mail advice FES location about the CTM delivery details such as o Master Name, o Passport number, Page 39
o Port of delivery, o Ship/ vessel name, o Delivery time and date. FES verifies / matches the beneficiary details given by the Indian shipping company with the details mentioned in the SWIFT advice sent by the overseas shipping company. Designated FES location enters the CTM transaction in Credence and generates bill from credence. FES coordinates the delivery with the regional Indian Shipping company office and reaches the port for CTM delivery. FES staff personally meets the beneficiary master and verifies his identity through his original passport which must match with the beneficiary details mentioned in the inward MT 103 message copy. FES staff hand over the CTM amount to the master of the ship and take the receipt signature on the cash memo and passport photocopy. Original copy of the cash memo is handed over to the master. Following additional documents are taken from the Master of the ship o Request letter from master of the ship with the seal of the ship. o Form A2 signed by master of the ship.
KYC Guidelines Indian shipping agency to provide the SWIFT message (MT103) of the amount remitted by the foreign shipping agency. CTM amount & delivery details to be furnished by Indian Shipping Agency over mail. At the time of CTM delivery, master of the ship shall be required to show the original valid passport which must match with the details mentioned in the MT 103 copy sent by the overseas shipping company. FES staff to keep masters passport photocopy (undertaking on documents verified to be done by the concerned FES staff) for necessary records. FES staff to collect Ship Masters signature on cash memo.
10. REMITTANCES FOR TOUR ARRANGEMENTS, ETC. (AT THE REQUEST OF THE TRAVELER)
Eligibility Individuals traveling abroad on personal /Leisure visit or business visit can remit upto a reasonable limit towards his hotel accommodation, tour arrangements, etc. in the countries proposed to be visited by him, Page 40
provided it is out of foreign exchange purchased by the traveler out of the limits prescribed as per FEMA guidelines (including foreign exchange drawn for private travel abroad). Quantum of exchange The amount remitted should be net of commission / mark up due to the Indian agent, since quantum of exchange is not specified in the RBI circular Receipt of Payments All the payments for release of foreign exchange should be received in advance. In case of cheques acceptance, exchange to be released after cheque realization. Payments for release of foreign exchange up to Rs. 50,000 or its equivalent can be received in cash. When foreign exchange is drawn on more than one occasion within one month for a single journey/visit should be treated as single transaction, the aggregate of rupee equivalent of foreign exchange drawn on different occasions for the single journey/visit should not exceed Rs.50,000 if cash is to be accepted. Wherever the rupee equivalent exceeds Rs 50,000, the entire payment is to be accepted in advance and should be drawn from the bank a/c of the applicant. Payments could be accepted by way of Cheque, Pay order, Demand Draft, RTGS, NEFT. In case of release of foreign exchange against acceptance of drafts/pay orders, approval from the competent authority as per draft acceptance guidelines should be held on records. 11. REMITTANCES FOR TOUR ARRANGEMENTS, ETC. (AT THE REQUEST OF THE AGENT)
Eligibility Agents in India, having a good track record and satisfying all KYC norms, having tie up arrangements with hotels/agents, etc., abroad for providing hotel accommodation or making other tour arrangements for travelers from India, provided the remittance is made out of foreign exchange purchased by the concerned traveler from us or from an authorized person out of the limits prescribed as per FEMA guidelines (including exchange drawn for private travel abroad).
Quantum of exchange Amount as per the invoice of the overseas hotels/agent within the prescribed limits of personal / business visit foreign exchange quota.
Receipt of Payments 1. The remittance is to be made only to the debit of foreign currency account in the name of the agent
with us, which can be opened for this purpose with any of our AD branch. Page 41
2.
DD in FC issued from the foreign currency account in the name of the agent maintained with other
ADs along with a certificate issued by the AD certifying that the amt is debited to the FC account of the agent. 3. 4. 5. 6. Debit of Current a/c of the agent with us. Crossed cheque drawn on applicants bank account, Pay order /Demand Draft issued from the applicants bank a/c RTGS/NEFT transfer from applicants bank a/c
12. REMITTANCES UNDER LIBERALIZED REMITTANCE SCHEME
Eligibility All Resident Individuals are eligible to avail the facility under the scheme. The facility will not be available to corporate, partnership firms, HUF, Trusts, etc.
Quantum of exchange USD 200,000. The facility will be per financial year basis (April-March) for any current or capital account transactions or a combination of both. Investment by resident individual in overseas companies would be sub-summed under the Scheme of USD 200,000. Limit of USD 200,000 under the Scheme would also include remittances towards Gift and donation by a resident individual.
Purpose This facility is available for making remittance up to USD 200,000 per financial year basis (AprilMarch) for any current or capital account transactions or a combination of both. Under this facility, resident individuals will be free to acquire and hold immovable property or shares or any other asset outside India and will also be able to open and maintain and hold foreign currency accounts with a bank outside India for making remittances under the scheme. The foreign currency account may be used for putting through all transactions connected with or arising from remittances eligible under this scheme. Gift Donation
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13. OTHERS a. Period of surrender of foreign exchange
In case the foreign exchange purchased for a specific purpose is not utilized for that purpose it could be utilized for any other eligible purpose for which drawl of foreign exchange is permitted. The unutilized portion of foreign exchange is required to be surrendered to Bank within period of 180 day from the date of its purchase.
1. Unspent Foreign Exchange Unspent foreign exchange brought back to India by a traveler should be surrendered within 180 days from the date of return of the traveler, if the unspent foreign exchange is in the form of currency notes. If such foreign exchange is in the form of travelers cheques, the same should be surrendered to an authorized person within 180 days from the date of return.
The traveler can utilize foreign Exchange brought back for his subsequent visit abroad during the period specified above. However, a returning traveler is also permitted to retain with him, foreign currency travelers cheques and currency notes up to an aggregate amount of USD 2000 and foreign coins without any ceiling. The traveler can utilize foreign exchange so retained, for his subsequent visit abroad.
14. REMITTANCES FOR RESTRICTED AUTHORIZED DEALERS (AD II) As per RBI Circular No. AP/DIR/Circular No. 25 dated 06.03.2006, some FFMCs have been granted Authorized Dealer-Category II (Restricted Authorized Dealers) license. AD II category license holders are not permitted to open a nostro account in their name, RBI has allowed them to enter into business arrangements with the banks to facilitate issuance of Foreign Currency Drafts, TT services. Objective The objective of the business arrangement with the AD II is to provide easier foreign exchange services to the customer, by enlarging the network of money changing facilities especially for DD & TT services.
Forex transactions allowed under AD II category are:1. Private Visits 2. Remittance by tour operators / travel agents etc. 3. Business travel 4. Fee for participation in global conferences 5. Film shooting Page 43
6. Remittance for participation in international events / competitions 7. Medical Treatment abroad 8. Disbursement of Crew wages 9. Overseas Education 10. Remittance under educational tie up arrangements with universities 11. Remittance towards exam fees 12. Employment and processing, assessment fees for intending migrants 13. Emigration 14. Visa fees.
KYC / RBI inspection/Audit 1. As per the Circular, for ADs-Category II RBI reserves the right to inspect them when considered necessary. RBI also requires a special audit of AD-Category II, depending on the nature of the transactions by an auditor from the approved list of RBI / ICAI. 2. KYC and Anti-Money Laundering norms prescribed for FFMC's will be applicable to ADCategory II also. 3. These transactions are processed on a request letter from the AD-II mentioning the applicant name, remitter, complete beneficiary details & also certifying the KYC norms with regard to the applicant are complied with. The documents submitted by the applicants are retained by the AD II only. The AD-II customers are also required to submit 5 % of the documents to the bank on a random basis for audit purpose. Process for AD II category transactions Sales Staff shall identify the AD II category client. Commercial to such client will fall under the delegated commission grid of Regional Sales Manager, Head FES. While sending the AD II commercial recommendation to Head FES / RSM , RSC is required to send the cost benefit analysis on the business arrangement covering the various aspect like expected gross income, expenses and net revenue to be earned. Commercial approvals from Head FES/RSM to be kept in FES records. While submitting the commercials to AD II customer, FES Sale staff must ensure to take their AD II category license issued by RBI. Copy of the commercial offer duly signed and accepted by the AD II & their license to be kept in the concerned departments record. Copy of the commercial arrangements & ADII license shall be submitted to the RSC in charge. AD II shall approach the designated FES location for foreign exchange transaction and submit the required documentation to CCM. Page 44
AD II customer shall submit the declaration cum undertaking on their company letter head giving applicant name & complete beneficiary detail. Accepted mode of payment for such transaction will be through a/c debit /RTGS/NEFT/DD/PayOrder from ADIIs a/c, Cheque drawn from ADIIs bank a/c. For payments by way of cheque for release of foreign exchange would be effected after realization of the cheque. After verifying all necessary documentation & receipt of payment from AD II, FES shall process the transaction & hand over the foreign draft / TT advice to the authorized staff of AD II. Travelers cheques can only be issued by CCM staff in the presence of the customer only.
Documentation required for the transactions under AD II category AD-II shall submit an application form with details and also confirming customers KYC compliance for affecting the remittance. Covering letter from the AD II providing the applicant name, complete beneficiary details & also certifying the KYC norms are complied with.. Form A2 cum FEMA Declaration duly signed by the AD II. Payment needs to be collected by way of RTGS/NEFT/DD/Pay-Order/cheque drawn from the AD IIs bank a/c (In case of cheque, remittance need to be effected after cheque realization). AD-II customer to submit 5 % of the transaction documents to the bank on a random basis for audit purpose.
KYC Compliance Important Points to be Noted: Agreement with AD II should mention clearly that the AD II would be responsible for KYC and establishing bonafides of the transactions being put through. It would be the responsibility of the AD II for monitoring / reporting of suspicious transaction to Financial Intelligence Unit (FIU). All AD II Fx arrangements should be approved by RSM / Head FES. Covering letter from the AD II on company letter head providing the complete applicant / remitter and beneficiary details & also certifying the KYC norms are complied with. AD II customer to submit the AD II category license given by RBI. Payment for the transaction to be made from the bank account of AD II.
Transfer between the Branches (intercity) Page 45
BOSH should plan the transfer between the branches with FES Sales staff in consultation with the FES Dealing Room. Branch to branch transfer of stock to happen in FES system No other persons other than the ones mentioned above should be aware / told / talked to about the transfers. Counter staff must carry a banks valid ID while transferring currencies. All Transfers should be accompanied by following documents: o Packing List o Branch Head to authorized branch executive to carry currencies between the branches on banks letter head duly attesting his /her signatures. o Authorized executive to record his movement details in movement register before leaving the branch premises. o BOSH should finalize the route of transfer; a routine route should be altered on regular basis for security reasons.
Records Keeping: 1. All the purchase /sale cash memos should be filed, day wise in seriatim. 2. All the documents regarding the retail sales cases should be filled day wise in seriatim on case to case basis and the BOSH have to ensure that the documentation for all the retail cases should be complete, the moment the case is processed in the system. 3. The empanelment business forms/KYC formats; valid RBI license copy should be on record before the initialization of foreign exchange business with any FFMC/RMCs/ Franchisees. 4. All these empanelment business forms/KYC formats, valid license copy and the declarations cum indemnities should be filed properly. 5.A database on list of FFMCs/RMCs/ Franchisees addresses that our Bank is currently dealing with along with list of their authorized dealing persons and expiry dates of their licenses should be kept on record. 6. A list of authorized executives to deal in foreign exchange business with these FFMCs /RMCs /franchisees / Banks duly approved is on record. 7. Permission to deal in foreign exchange /valid license copy to be kept on record and to be displayed in case of offsite locations. 8. All records to be permanently retained at branch/CPU
APPOINTMENT OF INFLUENCING AGENTS AND INCENTIVE PAYOUT GRIDS
Introduction: Page 46
Scope of note: Appointment of Influencing agents Their Agent code creation in Credence system Processing of transactions referred by influencing agents Influencing Agent Commission Payout & Delegation Grid.
Background: An individual or business establishment which can refer foreign exchange business to our bank. The category of influencing agents shall be education / immigration consultants, travel agents / tours operators, exchange companies FFMCs/RADs, Franchisees, Franchises of other FFMCs, chartered accountants, real estate agents, money transfer subagents, others etc.
Products: Prepaid Forex Travel Card, Bank Notes, Travelers Cheques, Foreign Currency Demand Drafts, Telegraphic Transfers.
Who can be an Influencing Agent? Individuals Proprietorship Firms Partnership Firms Private Limited Companies Public Limited Companies
Who cannot be an Influencing Agent? Defense / Weapons procurements; Gambling and Gaming companies, including casinos, and lottery operations; Individuals / organizations engaged in politics for financing political activities or to charitable Organizations whose main source of income is contributions from patrons overseas. (Exception to the donation income rule as above shall be educational / health institutions); Projects which may have negative socio economic impact (especially hydro projects which may displace original inhabitants); Projects which may lead to occupational / adverse environmental impact/health concerns (Especially corrosive chemicals, hazardous material disposal,); Projects which may have ecological impact such as destruction of wild life habitat (especially logging for paper, clearing forests for industry / commerce); Page 47
Chit Funds For credit to companies for buy-back of their securities Towards advances to agents / intermediaries as considerations for deposit mobilization Production of Ozone depleting materials Bullion merchants or lending against bullion Ship breaking industry Financing Banned Articles -IVBL will not finance credit engagements/ transactions that involve Dealing with / against security of banned articles, possession of which is banned under Wild Life Protection Act, 1972 Any activity, which is not encouraged by RBI.
Responsibilities of entity creation in Credence
Initiation of the Relationship
Sales Manager, Area Manager, Regional Sales Manager, Business Development Manager
Document Collection
Sales Manager, Area Manager, Regional Sales Manager, Business Development Manager
Document Verification
Regional Sales Coordinator, Sales Manager.
Document handling
CCM / BOSH /Branch Head
Entity Creation in Credence FES CPU KYC Documents required for different entity type Individual a. b. c. d. e. Identity Proof Address Proof Signature Proof PAN Card Code of Conduct
Proprietorship Firms a. b. Establishment Certificate Business address Proof Page 48
c. d. e.
Identified, Address & Signature Proof of Proprietor PAN Card of Proprietor Code of Conduct
Partnership Firms a. b. c. d. e. f. Establishment Certificate Business Address Proof Notarized Copy of Partnership Deep List of All Partners Identity Address & signature proofs of all partners Consent Letter & Authorized Signatory list signed by competent authority for entering into Influencing Agent agreement. g. h. PAN Card of the firm Code of Conduct
Private / Public Limited Companies a. b. Certificate of Incorporation Certificate of commencement of business (Only in case of Public Ltd. Companies). c. d. Business Address Proof Consent Letter & Authorized Signatory list signed competent authority for entering into Influencing Agent agreement. e. f. g. h. Memorandum of Associates (MOA) Article of Association (AOA) PAN Card of the company Code of Conduct
CHECK LIST FOR EMPANELMENT OF INFLUENCING AGENT
A 1
Details of Influencing Agent Influencing Agent Name Address
Contact Details Pan Number Page 49
Influencing Constitution ING-FES mapped ING-FES Sales Location
Agent
Individual Public Limited
Proprietorship Others Specify) (Pls
Partnership Firm
Private Limited
to
be
4 B 1 2 3 4 C 1
Manager
Name to be mapped Influencing Agent Business Specifications Current Business activity of the Influencing Agent Position in Areas Class of Trade In Business since Documents Code of Conduct on the Influencing Agent letterhead signed by authorized signatory Consent Letter & Original authorized signatory list for entering into Influencing Agent agreement signed & stamped by the top executive Pan Card in the name of the firm. Form 49A & 60 will not be considered Copy of commercial agreement signed & stamped by the authorized signatory. Influencing Agent Details A/c credit for Capital Local Area account holders Influencing Agent Account number Issue drafts for Non Account holders Issue pay order favoring for NonAccount Holders Approval Process FES- approvals for agents appointment as per policy Issue pay order favoring for Non-Account Holders Page 50 Yes No Yes No Yes No Yes No
2 3 4 D 1 2 3 4 E 1 2
Yes Yes Yes
No No No
Prepaid By Name & Designation
Verified By Name & Designation
Signature
Date
Signature
Date
Please note all KYC Docs have to be self attested by Influencing Agent and OSV done by Bank Staff with Stamp & Sign Process of Appointment of an Influencing Agent Sales Team will approach influencing agent and brief about FES services of Capital Local Area FES Relationship Manager to initiate a new corporate has to first create a visit report and Profile sheet with details of company, cost benefit analysis and obtain pricing approvals from Head - FES. Determine commercial terms with influencing agent through an arrangement letter as approved by authority as per grid FES would also complete the KYC documents for one time master creation. Refer to attached KYC document checklist above. Duly approved profile sheet would be then forwarded to CPU along with complete KYC documents and duly accepted copy of offer letter for master creation in the Front office system. Before initiating commercial agreement no business shall be accepted from the agent as referred business Create master and agent code in Credence based on details sent in the Profile sheet after verifying the KYC documents sent. If there are any discrepancies the same will be referred to FES Sales Once master and agent code is created, the same will be communicated to FES Sales FES to communicate agent code to the respective agent for all future references FES Manager would deliver the commercial arrangement to the influencing agent and get the acceptance of the principal / authorized signatory of the influencing agent on banks copy of offer Process for transacting through an Influencing agent Influencing agent while referring clients shall inform the designated FES manager/RSC about the transaction details including name of the client & forex required. The Agent code provided by the bank & company stamp must be endorsed on the FEMA Declaration Form / Forex Plus application form to put the transaction under correct agent code. Agent shall stamp the FEMA Declaration mention their agent code while forwarding the transaction RSC to verify the commercial terms for each influencing agent based on maintained register. The register will have all details of the commercial agreement with various influencing agents signed off by the Area Manager/Regional Sales Manager.
Page 51
Deals are booked by the RSC. RSC to book the same in the correct transaction code in CREDENCE. In case the agent name is erroneously skipped while entering in front office system, then approval for incentive payouts for that particular transaction need to be taken from Head - FES Operations. Hence deals need to be inputted with care.
All documents by the customer would be verified by the CCM. CCM would be responsible for KYC / AML of all transactions referred by the agent. Physical presence of the customer whether across our bank counter or at the premises of the influencing agent is necessary for execution of the transactions referred. Ensure that both applicant and beneficiary names are screened on compliance enquirer. Following are the list of forms & documents required for executing any forex transactions referred: o Form A2 & FEMA Declaration duly filled & signed by the customer. o Valid Passport (for all travel related forex requirements) or valid Govt. issued photo identity with address (for non-travel related remittances). o Other transaction specific documents as prescribed by FEMA guidelines. o Application form in case of Forex Travel Card.
Mode of Payment o All payments need to be drawn directly from customers account. o Cash payments would be accepted up to Rs.50000/o All payments above Rs.50000/- should be made by way of RTGS/DD/PO drawn on Capital Local Area Bank Ltd. o In case of cheques, transaction would be effected after realization of the cheque.
After verification of all the necessary documentation & receipt of payment, Capital Local Area Bank Ltd. shall process the transaction. Capital Local Area Bank Ltd. reserves the right to reject the transaction after verifying the documentation where bonafides of the customer are not adhering to the prescribed guidelines.
Deal inputted by RSC to be utilized in the system. In case of TT/DD, ensure that beneficiary details including exact beneficiary name, beneficiary bank details, account number and
SWIFT/IBAN/SORT code is provided. Handover foreign exchange to the customer from stock box. In case of Travelers cheques, one signature to be taken on TC at the time of issuance along with Purchase Agreement Form (PAF). In case of travel card, application form with all details duly filled in to be obtained
Delegation for Incentive Payouts to Influencing Agents:
Competent Authority to authorize incentive payouts to Influencing Agents would be as follows:
Page 52
Approving Authorities
Capital Local Area Net Exchange Margin Retention over IBR
Area Manager Regional Sales Manager Head of FES
Respective FCY IBR + 1% Respective FCY IBR+ 0.30% Beyond 0.30% retention on Respective FCY IBR
Format for agreement with influencing agent
Date
To XYZ Address
Sub- Commercial Proposal for Foreign Exchange Services
Dear Sir/Madam, It was a pleasure to have met you and understand your foreign exchange requirements. We are very keen to start business with your organization and are glad to extend commercial proposal to offer professional Foreign Exchange Services. We have a dedicated forex team that is drawn from the best in the industry to ensure you get the highest service standards that include door step service, customized MIS, dedicated relationship executive etc.
Capital Local Area Ltd. In addition, we are well on our way to being the market leaders becoming one stop super market for all foreign exchange travel related payment gateways such as foreign currency notes, pre paid Forex travel cards, travelers cheques, foreign demand drafts & telegraphic transfers in India.
Capital Local Area Bank Ltd. with a large network is best poised to offer Forex services in an efficient and economical manner. We offer following services from our banks forex branches. Selling Banknotes of over xx countries & all Major Travelers Cheques. Pre paid Forex Travel Card which is available in xx major currencies & is safe, convenient and smart choice for your customers while they travel abroad.
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Foreign Drafts & Telegraphic Transfers available in over ---- currencies including USD, GBP, EURO NZD, CAD, AUD, SGD, etc.
With our competent positioning & corresponding banking relations we are in the best position to offer you the most competitive pricing.
Annexure I Modus Operandi & Commercial offer Commercial Offer: All transactions with the clients referred by XYZ would be done on card rates prescribed by Capital Local Area Bank Ltd. Any discounts offered would be deducted from the commission payable.
Product
Applicable Charges
Currency USD
Applicable Rates IBR + __ paise. IBR + __ paise. IBR + __ paise. IBR + __ paise. IBR + __%
Demand Drafts
Rs.___+ Fx Conv Fee + Service GBP tax EUR AED, SAR Rs.___+ Fx Conv Fee + Service Other Currencies tax
Telegraphic Transfers
For all transactions referred by XYZ, the difference between IVBL applicable rates and the rate applied to customer would be paid as commission to XYZ at the end of every month after deduction of applicable TDS. The above mentioned charges levied shall be on non-sharing basis. Commission Pay Out process Capital Local Area Bank Ltd. would provide a unique agent code to XYZ that needs to be quoted in the forms while referring the customer. The office stamp of XYZ should be affixed on forms & copies of the documents or a mail should be sent from the official email id of XYZ confirming the details of the transaction. At the end of every month, XYZ to provide on letter head the details of all referred transactions to the designated Capital Local Area Bank branch in the prescribed format. After verification of the details, branch would make the commission payment by way of A/c credit, PO/BC in the name of XYZ. Applicable TDS would be deducted from the commission payment. This offer is valid up to ___________________________, however Capital Local Area Bank Ltd. reserves the right to withdraw the arrangement at its discretion with one month prior notice.
Page 54
Capital Local Area Bank Ltd. also reserves the right to review / renew this arrangement after expiry date.
It is agreed and declared between both the parties that the above mentioned terms and conditions are accepted and signed thereof.
Page 55
CHAPTER 3 REVIEW OF LITERATURE
Page 56
LITERATURE REVIEW
Huang (2011) analyze that promotions is different form of activities for attracting and getting attention of customer to purchase the product or service through personal selling, public relations, sales promotions and advertising.
Kurniawan (2010) according to him promotion of product or service helps in the best way to builds relationship with customers, because everyone is looking for the best suitable deal for them.
Solomon (2009) analyze that those who buy the goods or services provided by companies are customers. In other words, a customer is a stakeholder of an organization who provides payment in exchange for the offer provided to him by the organization with the aim of fulfilling a need and to maximize satisfaction. Sometimes the term customer and consumer are confusing. A customer can be a consumer, but a consumer may not necessarily be a customer. Another author explained this difference. I.e. a customer is the person who does the buying of the products and the consumer is the person who ultimately consumes the product.
Kotler & Keller (2009) analyze when a consumer/customer is contented with either the product or services it is termed satisfaction. Satisfaction can also be a persons feelings of pleasure or disappointment that results from comparing a products perceived performance or outcome with their expectations. As a matter of fact, satisfaction could be the pleasure derived by someone from the consumption of goods or services offered by another person or group of people; or it can be the state of being happy with a situation. Satisfaction varies from one person to another because it is utility. One mans meal is another mans poison, an old adage stated describing utility; thus highlighting the fact that it is sometimes very difficult to satisfy everybody or to determine satisfaction among group of individuals.
Levy & NBRI (2009) studied that measuring customer satisfaction could be very difficult at times because it is an attempt to measure human feelings. It was for this reason that some existing researcher presented that the simplest way to know how customers feel, and what they want is to ask them this applied to the informal measures.
Levy (2009) in his studies, suggested three ways of measuring customer satisfaction: A survey where customer feedback can be transformed into measurable quantitative data: Focus group or informal where discussions orchestrated by a trained moderator reveal what customers think. Informal measures like reading blocs, talking directly to customers. Asking each and every customer is advantageous in as much as the company will know everyones feelings, and disadvantageous because the company will Page 57
have to collect this information from each customer. The National Business Research Institute (NBRI) suggested possible dimensions that one can use in measuring customer satisfaction, e.g.: Quality of service Innocently Speed of service pricing Complaints or problems Trust in your employees The closeness of the relationship with contacts in your firm Other types of services needed Your positioning in clients minds
Schiffman & Karun (2004) according to them Customer satisfaction is defined as the individuals perception of the performance of the products or services in relation to his or her expectations. In a nutshell, customer satisfaction could be the pleasure obtained from consuming an offer.
Kotler et al. (2002) analyze that it is factual that, there is no specific definition of customer satisfaction since as the years passes, different authors come up with different definitions. Customer satisfaction has also been defined by another author as the extent to which a products perceived performance matches a buyers expectations.
Giese & Cote (2000) says that the definition is supported by some other authors, who think that consumers level of satisfaction is determined by his or her cumulative experience at the point of contact with the supplier.
Boulding et al & Andreassen (2000) describes that there exist two conceptualizations of customer satisfaction; transaction-specific and cumulative. Following the transaction- specific, customer satisfaction is viewed as a post-choice evaluation judgment of a specific purchase occasion until present date; researchers have developed a rich body of literature focusing on this antecedents and consequences of this type of customer satisfaction at the individual level. Cumulative customer satisfaction is an overall evaluation based on the total purchase and consumption experiences with a product or service over time.
Athanassopoulos (2000) describe that customers want to see for what they are looking for. Promotion is for reducing the feeling of guilt which is associated with the use of different products or service which result to customer satisfaction. Page 58
Schefter (2000) according to him another common factor which is helpful to derives customer satisfaction is website. Website is the advanced way uses for the promotion, to aware the consumer and to satisfy them with offering vast array of function and features. Before making choice of product offering, potential customer has an opportunity through website to make a detailed comparison. When information like discounted products and other special offers on different products travels in the public, could increase the level of customer satisfaction.
Fornell (1992) analyze that client happiness, which is a sign of customer satisfaction, is and has always been the most essential thing for any organization. Customer satisfaction is defined by one author as the consumers response to the evaluation of the perceived discrepancy between prior expectations and the actual performance of the product or service as perceived after its consumption hence considering satisfaction as an overall post-purchase evaluation by the consumer. Some authors stated that there is no specific definition of customer satisfaction, and after their studies of several definitions they defined customer satisfaction as customer satisfaction is identified by a response (cognitive or affective) that pertains to a particular focus (i.e. a purchase experience and/or the associated product) and occurs at a certain time (i.e. post-purchase, post-consumption).
Johnson & Fornell (1991) analyze that this is more fundamental and useful than transaction specificity customer satisfaction in predicting customer subsequent behavior and firms past, present and future performances. It is the cumulative customer satisfaction that motivates a firms investment in customer satisfaction.
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Chapter 4 RESEARCH METHODOLOGY
Page 60
RESEARCH METHODOLOGY Objectives of the Study: To know the level of customer satisfaction in foreign exchange services provided by the Capital Local Area Bank. To know the customer preferred transactions with Capital Local Area Bank foreign exchange. Research Design Research can be classified in one of three categories:

Exploratory research Descriptive research Causal research
Exploratory research has the goal of formulating problems more precisely, clarifying concepts, gathering explanations, gaining insight, eliminating impractical ideas, and forming hypotheses. Exploratory research can be performed using a literature search, surveying certain people about their experiences, focus groups, and case studies. When surveying people, exploratory research studies would not try to acquire a representative sample, but rather, seek to interview those who are knowledgeable and who might be able to provide insight concerning the relationship among variables. Descriptive research is more rigid than exploratory research and seeks to describe users of a product, determine the proportion of the population that uses a product, or predict future demand for a product. As opposed to exploratory research, descriptive research should define questions, people surveyed, and the method of analysis prior to beginning data collection. In other words the who, what, where, when, why and how aspects of the research should be defined. Such preparation allows one the opportunity to make any required changes before the costly process of data collection has begun. Causal research seeks to find cause and affect relationships between variables. It accomplishes this goal through laboratory and field experiments. If the objective is to determine which variable might be causing certain behavior, i.e. whether there is a cause and effect relationship between variables, causal research must be undertaken. Our research regarding Consumers attitude towards online shopping is a descriptive research because we just want to draw a picture of our topic as what are the factors that influence consumers to shop online
Research hypotheses A series of testable hypotheses were developed from the proposed research model, as shown below: Fore x Rate Ease of Acces Friendli UnderAccuracy Query Manage -ment Completio n Time Operatin g hours Service Update s
-ness of standing of in Staff requiremen Document
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-ation
Customer satisfactio n (H1)
H1a
H1b
H1c
H1d
H1e
H1f
H1g
H1h
H1i
Sub Hypothesis for Consumer Satisfaction Level are : H1a: There is a significant relationship between the Forex Rates and consumer satisfaction level. H1b: There is a significant relationship between the ease of access and consumer satisfaction level. H1c: There is a significant relationship between the Friendliness of Staff and consumer satisfaction level. H1d: There is a significant relationship between the Under-standing of requirement and consumer satisfaction level. H1e: There is a significant relationship between the Accuracy in Documentation and consumer satisfaction level. H1f: There is a significant relationship between the Query Management and consumer satisfaction level. H1g: There is a significant relationship between the Completion Time and consumer satisfaction level. H1h: There is a significant relationship between the Operating hours and consumer satisfaction level. H1i: There is a significant relationship between the Service Updates and consumer satisfaction level. Objective Hypothesis Dependent Variables Independent variable Data Collection Instrument 1) The objective of this a) There is a significant Customer Forex Rates Likert scale
study is to identify the relationship between the Forex Satisfaction key factors influencing Rates Customer level. and Customer level Ease of access significant
Satisfaction Satisfaction level. b) There is a
relationship between the Ease of access and Customer Friendliness of staff significant the and Understanding of requirement
Satisfaction level. c) There is a
relationship Friendliness
between of staff
Customer Satisfaction level. Page 62
d)
There
is
significant the Accuracy in
relationship
between
understanding of requirement and level. e) There is a significant the Customer Satisfaction
documentation
relationship Accuracy and level. in
between
Query management
documentation Satisfaction
Customer
Completion time
f)
There
is
significant Operating hours
relationship between the Query management and Customer
Satisfaction level. g) There is a significant the Services updates
relationship
between
Completion time and Customer Satisfaction level. h) There is a significant the
relationship
between
operating hours and Customer Satisfaction level. i) There is a significant the
relationship
between
service updates and Customer Satisfaction level.
Data Instrument scale QUESTIONNAIRE The questionnaire is carefully designed to meet the requirements of the research. The questions are taken from previous literature on Consumers satisfaction regarding forex services provided at the banks with a view to validate the research more and some of the questions are self structured to cover the diversity of Page 63
research problems. The questionnaire consists of two main parts, first part is mainly focused on questions pertaining to the information regarding Forex services availed by the customers at the bank. Second part of the questionnaire covers factors influencing customers satisfaction level .
1. Kind of customer Section A Information regarding Forex services availed by the 2. Forex product 3. Currency 4. Purpose 5. Amount
customers at the bank
1. Forex Rates Section B Factors influencing customer satisfaction level 2. Ease of access 3. Friendliness of staff 4. Understanding requirement 5. Accuracy documentation 6. Query management 7. Completion time 8. Operating hours 9. Services updates in of
SCALING TECHNIQUE: Likert Scale has been used to get the questionnaires filled. It is a psychometric scale. When responding to a Likert questionnaire item, respondents specify their level of agreement or disagreement on a symmetric agree-disagree scale for a series of statements. The Likert scale is the sum of responses on several Likert items. The format of a typical five-level Likert item: 1. Highly Dissatisfied 2. Dissatisfied 3. Neutral 4. Satisfied 5. Highly Satisfied
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Data collection There are two sources of data for research, namely primary and secondary data. Primary data is relevant to the present study and usually collected by the researcher through communication methods or interaction with respondents and observation methods. For this kind of data, survey techniques were used to answer the research questions, which were based on a structured questionnaire. Secondary data is gathered from previous studies through various sources such as articles, internet, organizations database, government surveys and enterprises etc. The advantage of secondary data is time saving and inexpensive in comparison with primary data. However, secondary data may not suitable to a specific research since they are conducted for another study with different objectives (Ghauri & Gronhaug, 2007); in other words, they are universal for mass audiences. Therefore, researchers should use secondary data as reference tool for the first step before proceeding with their own research
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Chapter 5 Data Analysis And Interpretation
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Data Analysis and Interpretation To arrive at pertinent analysis, the collected data was put to a planned statistical analysis using SPSS package. After scoring the questionnaires the data of all the people was pooled and tabulated. To arrive at certain conclusion regarding the hypothesis advanced in the process investigation, the description of the statistical tools which were applied for the analysis of data. Statistical tools for data analysis Survey was conducted using Likert based questionnaire ranging from 1 = Highly Dissatisfied to 5 = Highly Satisfied. Further SPSS 20.0 was used for analyzing the data.
Correlation First of all correlation was applied to test the research hypothesis. The purpose of correlation analysis is to measure and interpret the strength of a linear or nonlinear (e.g., exponential, polynomial, and logistic) relationship between two continuous variables. When conducting correlation analysis, we use the term association to mean linear association. Here in, we focus on the Spearman correlation coefficients. The correlation coefficient takes on values between 1 and +1, ranging from being negatively correlated (1) to uncorrelated (0) to positively correlate (+1). The sign of the correlation coefficient (i.e., positive or negative) defines the direction of the relationship. The absolute value indicates the strength of the correlation.
Exploratory data Analysis: This chapter would present all the analysis of the recorded data. Various tests would be applied on the data to either select or reject the hypothesis that were stated in the research methodology chapter.
Tests of normality: First of all, the gathered data is put into SPSS and is tested for normality using Shapiro Wilks test.
Nonparametric Correlations
Satisfaction_Level_with_inst Forex_Rates itution Spearman's rho Forex_Rates Correlation Coefficient Sig. (2-tailed) N Satisfaction_Level_with Correlation _institution Coefficient Page 67 . 44 .158 .307 44 1.000 1.000 .158
Sig. (2-tailed) N
.307 44
. 44
Descriptives Statistic Std. Error Forex_Rates Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Upper Bound 4.0909 3.9328 4.2491 4.1010 4.0000 .271 .52020 3.00 5.00 2.00 .00 .137 .843 .357 .702 .07842
Tests of Normality Kolmogorov-Smirnova Statistic df Forex_Rates .388 44 Sig. .000 Shapiro-Wilk Statistic .694 df 44 Sig. .000
a. Lilliefors Significance Correction
As we can see the significant value is below.05 so the data is non normal. Below is the plot of normality for forex rates, here the lines are not touching the points which shows the data is non normal. As we can see the
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data for all the variables is non normal , I have just shown one example of the non normal data regarding
forex rates. Case Processing Summary Cases Valid N Forex_Rates 44 Percent 97.8% Missing N 1 Percent 2.2% Total N 45 Percent 100.0%
Case Processing Summary Cases Valid N Forex_Rates Ease_of_Access Staff_Greeting 44 44 44 Percent 97.8% 97.8% 97.8% 97.8% Missing N 1 1 1 1 Percent 2.2% 2.2% 2.2% 2.2% Total N 45 45 45 45 Percent 100.0% 100.0% 100.0% 100.0%
Requirement_Understan 44 ding Accuracy Query_Mgmt Time_taken Operating_hours Service_updates 44 44 44 44 44
97.8% 97.8% 97.8% 97.8% 97.8% 97.8%
1 1 1 1 1 1
2.2% 2.2% 2.2% 2.2% 2.2% 2.2%
45 45 45 45 45 45
100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Satisfaction_Level_with 44 _institution
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Descriptives Statistic Std. Error Forex_Rates Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Ease_of_Access Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Staff_Greeting Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Upper Bound Upper Bound Upper Bound 4.0909 3.9328 4.2491 4.1010 4.0000 .271 .52020 3.00 5.00 2.00 .00 .137 .843 4.1136 3.9257 4.3016 4.1515 4.0000 .382 .61817 2.00 5.00 3.00 .00 -.688 2.410 4.2273 4.0321 4.4225 4.2525 .357 .702 .09680 .357 .702 .09319 .07842
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Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Requirement_Understan Mean ding 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Accuracy Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Upper Bound Upper Bound
4.0000 .412 .64208 3.00 5.00 2.00 1.00 -.240 -.585 4.1818 3.9822 4.3815 4.2020 4.0000 .431 .65673 3.00 5.00 2.00 1.00 -.205 -.633 3.9545 3.7278 4.1813 3.9747 4.0000 .556 .74567 2.00 5.00 3.00 .75 Page 71 .357 .702 .11241 .357 .702 .09901
Skewness Kurtosis Query_Mgmt Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Time_taken Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Operating_hours Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Upper Bound Upper Bound Upper Bound
-.278 -.208 3.9091 3.6837 4.1345 3.9495 4.0000 .550 .74141 2.00 5.00 3.00 .00 -.569 .616 4.1364 3.9557 4.3170 4.1515 4.0000 .353 .59419 3.00 5.00 2.00 .75 -.037 -.118 4.0227 3.8557 4.1897 4.0253 4.0000
.357 .702 .11177
.357 .702 .08958
.357 .702 .08282
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Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Service_updates Mean 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Skewness Kurtosis Satisfaction_Level_with Mean _institution 95% Confidence IntervalLower Bound for Mean 5% Trimmed Mean Median Variance Std. Deviation Minimum Maximum Range Interquartile Range Upper Bound Upper Bound
.302 .54936 3.00 5.00 2.00 .00 .017 .580 4.0000 3.8394 4.1606 4.0000 4.0000 .279 .52827 3.00 5.00 2.00 .00 .000 .899 4.3182 4.1749 4.4614 4.2980 4.0000 .222 .47116 4.00 5.00 1.00 1.00 .357 .702 .07103 .357 .702 .07964
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Skewness Kurtosis
.809 -1.413
.357 .702
Tests of Normality Kolmogorov-Smirnova Statistic Df Forex_Rates Ease_of_Access Staff_Greeting .388 .346 .297 44 44 44 44 Sig. .000 .000 .000 .000 Shapiro-Wilk Statistic .694 .728 .778 .787 df 44 44 44 44 Sig. .000 .000 .000 .000
Requirement_Understan .291 ding Accuracy Query_Mgmt Time_taken Operating_hours Service_updates .274 .322 .341 .357 .364
44 44 44 44 44 44
.000 .000 .000 .000 .000 .000
.839 .818 .756 .723 .703 .587
44 44 44 44 44 44
.000 .000 .000 .000 .000 .000
Satisfaction_Level_with .432 _institution a. Lilliefors Significance Correction
Seeing all the data is non normal, we applied Spearmans correlation to test the relationship between the various variables. Correlations Satisfaction_L evel_with_inst Forex_Rates itution Spearman's rho Forex_Rates Correlation Coefficient Sig. (2-tailed) N Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) .307 . . 44 .158 .307 44 1.000 1.000 .158
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44
44
The first hypothesis is that there is a significant relationship between the Forex Rates and consumer satisfaction level is rejected because the sig. Value is greater than .05. So, we can say that Forex rates have a no correlation with consumer satisfaction. Satisfaction_L evel_with_inst itution Spearman's rho Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) N Ease_of_Access Correlation Coefficient Sig. (2-tailed) N .035 44 . 44 . 44 .301 .035 44 1.000 1.000 Ease_of_Access .301
The second hypothesis is that there is a significant relationship between the ease of access and consumer satisfaction level and this is proved true with value .301 because the sig. Value is less than .05. So, we can say that ease of access have a medium correlation with customer satisfaction
Satisfaction_L evel_with_inst itution Spearman's rho Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) N Staff_Greeting Correlation Coefficient Sig. (2-tailed) N .444 44 . 44 . 44 .118 .444 44 1.000 1.000 Staff_Greeting .118
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The third hypothesis is that there is a significant relationship between the Friendliness of Staff and consumer satisfaction level is rejected because sig. value is greater than .05. So,we can say that Friendliness of Staff has no correlation with customer satisfaction. Satisfaction_L evel_with_inst Requirement_Understandi itution Spearman's rho Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) N Requirement_Understan Correlation ding Coefficient Sig. (2-tailed) N .804 44 . 44 . 44 .039 .804 44 1.000 1.000 ng .039
The fourth hypothesis is that there is a significant relationship between the Under-standing of requirement is rejected because sig. Value is greater than .05. So, we can say that Under-standing of requirement has no correlation with customer satisfaction. Satisfaction_L evel_with_inst itution Spearman's rho Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) N Accuracy Correlation Coefficient Sig. (2-tailed) N .162 44 . 44 . 44 .215 .162 44 1.000 1.000 Accuracy .215
The fifth hypothesis is that there is a significant relationship between the Accuracy in Documentation and consumer satisfaction level is rejected because sig. Value is greater than .05. So, we can say that Accuracy in Documentation has no correlation with customer satisfaction. Satisfaction_L Query_Mgmt Page 76
evel_with_inst itution Spearman's rho Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) N Query_Mgmt Correlation Coefficient Sig. (2-tailed) N .026 44 . 44 . 44 .335* .026 44 1.000 1.000 .335*
The sixth hypothesis is that there is a significant relationship between the Query Management and consumer satisfaction level and this is proved true with value .335 because sig. Value is less than .05. So, we can say that Query Management has a medium correlation with customer satisfaction.
Satisfaction_L evel_with_inst itution Spearman's rho Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) N Time_taken Correlation Coefficient Sig. (2-tailed) N *. Correlation is significant at the 0.05 level (2-tailed). The seventh hypothesis is that there is a significant relationship between the Completion Time and consumer satisfaction level and this is proved true with value .352 because sig. Value is less than .05. So, we can say that Completion Time has a medium correlation with customer satisfaction. Satisfaction_L evel_with_inst itution Spearman's rho Satisfaction_Level_with Correlation 1.000 Operating_hours .242 Page 77 .019 44 . 44 . 44 .352* .019 44 1.000 1.000 Time_taken .352*
_institution
Coefficient Sig. (2-tailed) N . 44 .242 .114 44 1.000
Operating_hours
Correlation Coefficient Sig. (2-tailed) N
.114 44
. 44
The eighth hypothesis is that there is a significant relationship between the Operating hours and consumer satisfaction level is rejected because the sig. value is greater than .05. So, we can say that Operating hours has no correlation with customer satisfaction. Satisfaction_L evel_with_inst itution Spearman's rho Satisfaction_Level_with Correlation _institution Coefficient Sig. (2-tailed) N Service_updates Correlation Coefficient Sig. (2-tailed) N .225 44 . 44 . 44 -.187 .225 44 1.000 1.000 Service_updates -.187
The ninth hypothesis is that there is a significant relationship between the Service Updates and consumer satisfaction level is rejected because sig. value is greater than .05. So,we can say that Service Updates has no correlation with customer satisfaction.
Which foreign exchange service(s) availed by you?
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Services
Foreign Currency Wire Transfer Foreign Currency Demand Draft Travellers Cheques Forex Travel cards
No. of Respondent
38 6 6 5 10
Percentage
58% 9% 9% 8% 15%
For what purpose do you use forex services?
Purpose Personal / Private /Leisure Visits Business Visit Employment abroad Maintenance of Close relative abroad Education abroad Medical treatment Immigration
No. of Respondent 33 14 3 2
Percentage 48% 20% 4% 3%
9 2 6
13% 3% 9%
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Chapter 5 Conclusion
Page 80
Conclusion This is a final chapter of the report. In this chapter we will conclude all what we have studied in our whole research. The first objective was to check the customer satisfaction level with the forex services of Capital Local Area Bank. In achieving this research was conducted as above and the results are shown. The Sixth hypothesis that there is a significant relationship between the Query Management and consumer satisfaction level is accepted and thus the correlation between query management and customer satisfaction is established. The Seventh hypothesis that there is a significant relationship between the Completion Time and consumer satisfaction level is also accepted. Thus we can say that query management and completion time has a direct correlation with the customers satisfaction level. So the bank should pay attention to the query management system and the completion time taken by the employees for the service. The Second Objective was to know the customer preferred transactions. Mostly the service used in forex services is Foreign currency. The second mostly used service is Forex travel card then wire transfer and Foreign Currency Demand Draft and the less used is traveller cheques. Mostly used transaction is regarding the Personal / Private /Leisure Visits. The second most preferred transaction is the Business visits. The third most preferred transaction is the Education abroad. So we can say that Jalandhar being the NRI hub has mostly the Personal / Private /Leisure Visits as preferred transactions. Then comes the Business purpose which the affluent people can afford, it is also in big number. The third purpose is the Education abroad. While studying for the project we have conclude that the above factors or variables are responsible for the satisfaction of the customers at Capital Local Area Bank. The Bank is aggressive in retail forex with good products such as TTs, DDs, Traveller cards, Travellers cheques. It has a good base of satisfied customers in the area but as the competition grows in the area so the bank needs to play more aggressively and open new branches in the area so as to get within the reach of each and every customer of the foreign exchange.
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REFERENCES 1. Huang (2011) Determinants of Customer Satisfaction

(http://www.facultyjournal.com/webmaster/upload/__Fast%20Food%20Paper.pdf) [Viewed 20-7-2013]
2. Kurniawan (2010) Determinants of Customer Satisfaction (http://www.facultyjournal.com/webmaster/upload/__Fast%20Food%20Paper.pdf) [Viewed 20-7-2013] 3. Solomon (2009) The Relationship between Customer Satisfaction and Service Quality
(http://umu.diva-portal.org/smash/get/diva2:448657/FULLTEXT02.pdf) [Viewed 14-07-2013]
4. Kotler & Keller (2009) the Relationship between Customer Satisfaction and Service Quality
5. Levy (2009) the Relationship between Customer Satisfaction and Service Quality
6. Athanassopoulos (2000) Determinants of Customer Satisfaction (http://www.facultyjournal.com/webmaster/upload/__Fast%20Food%20Paper.pdf) [Viewed 20-7-2013] 7. Schefter (2000) Determinants of Customer Satisfaction (http://www.facultyjournal.com/webmaster/upload/__Fast%20Food%20Paper.pdf) [Viewed 20-7-2013] 8. Giese & Cote (2000) the Relationship between Customer Satisfaction and Service Quality
9. Boulding, et al.& Andreassen (2000) Customer satisfaction

(http://www.studymode.com/essays/Customer-Satisfaction-1232027.html) [Viewed 22-7-13]
10. (http://en.wikipedia.org/wiki/Foreign_exchange_service_(finance)) 11. (http://capitalbank.co.in/cb_about.htm)
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APPENDIX
------------------Questionnaire on Customer Satisfaction in FOREX Services------------------------
1. Name of the Person ________________ 2. Contact No._______________________ 3. Occupation_______________________ 4. Are you satisfied with the forex services provided by Capital Local Area Bank? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 5. Which kind of customer are you? ( ) Agent ( ) Direct client ( ) Channel partners.
6. Which foreign exchange service(s) availed by you. ( ) Foreign Currency ( ) Wire Transfer ( ) Foreign Currency Demand Draft ( ) Travellers Cheques ( ) Forex Travel cards 7. In which currency you usually do forex transactions? ( ) United States Dollars (USD) ( ) Great Britain Pounds (GBP) ( ) EURO ( ) Arab Emirates Dirham (AED) ( ) Australian Dollars (AUD) ( ) Canadian dollars (CAD) ( ) New Zealand Dollars (NZD) ( ) Singapore Dollars (SGD) ( ) Swiss Francs (CHF) ( ) Saudi Riyal (SAR) 8. For what purpose do you use forex services? ( ) Personal / Private /Leisure Visits ( ) Business Visit ( ) Employment abroad Page 83
( ) Maintenance of Close relative abroad ( ) Education abroad ( ) Medical treatment ( ) Immigration ( ) If Others Specify__________________________ 9. The amount of foreign exchange transaction done in a Financial Year. ( ) Below Rs 10, 00,000 ( ) From Rs 10, 00,000- 1,00,00,000 ( ) Above Rs 100, 00,000 10. Are you satisfied with the foreign exchange rates? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 11. Are you satisfied with the accessibility of the branch? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 12. Are you satisfied with the staffs greeting and welcome? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 13. Are you satisfied with the staffs ability to understand your requirement? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 14. Are you satisfied with the accuracy in documentation? ( ) Highly Dissatisfied Page 84
( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 15. Are you satisfied with the clarification given to your queries? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 16. Are you satisfied with the time taken by the staff to complete your requirement? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 17. Are you satisfied with the operating hours of Capital Local Area? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied 18. Are you satisfied with the updates given to you regarding new services? ( ) Highly Dissatisfied ( ) Dissatisfied ( ) Neutral ( ) Satisfied ( ) Highly Satisfied
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LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT

CHAPTER 2 INDUSTRY PROFILE

2.3 Retail Forex Market in Jalandhar

2.4 FOREIGN EXCHANGE SERVICES AT CAPITAL LOCAL AREA BANK

KYC/SCREENING REQUIREMENTS FOR ALL TYPES OF DEALS AND CUSTOMERS Page 19

RSC RATE APPROVAL PROCESS

The Verification & Approval Grid for DD purchase is as follows: Page 22

FOREIGN EXCHANGE PURCHASE

Guidelines for retail foreign exchange encashment Page 24

Encashment Amount for FCN/TC's Identification Documents

Excess of US $ 500 or equivalent

KYC FOR ENCASHMENT

Sale Proceeds Payment To

Cash Proceeds / Cheque Payments

Amounts higher than Rs. 50000

Sale Proceeds Payment To

demand draft or credit to the clients account maintained

returning from abroad exceeds the limits prescribed for Form

(CDF), production of CDF should invariably be insisted.

FOREIGN EXCHANGE SALES

1. PERSONAL / LEISURE VISIT

Product: Bank Notes, Travelers cheques and Forex Travel Card

Product: Bank Notes, Travelers cheques, Forex Travel Cards.

Eligibility Resident Indian proceeding for permanent immigration abroad.

Eligibility Resident Indians going abroad for employment.

For the attendant Page 35

8. MAINTENANCE OF CLOSE RELATIVES ABROAD

Product: Telegraphic Transfer and Demand Draft. Page 37

9. CASH TO MASTERS TRANSACTIONS PROCESS (CTM) OF SHIPPING COMPANIES

Transaction process Cash To Masters Transactions (CTM)

12. REMITTANCES UNDER LIBERALIZED REMITTANCE SCHEME

13. OTHERS a. Period of surrender of foreign exchange

Transfer between the Branches (intercity) Page 45

APPOINTMENT OF INFLUENCING AGENTS AND INCENTIVE PAYOUT GRIDS

Responsibilities of entity creation in Credence

Initiation of the Relationship

Regional Sales Coordinator, Sales Manager.

CCM / BOSH /Branch Head

Proprietorship Firms a. b. Establishment Certificate Business address Proof Page 48

CHECK LIST FOR EMPANELMENT OF INFLUENCING AGENT

Details of Influencing Agent Influencing Agent Name Address

Contact Details Pan Number Page 49

Influencing Constitution ING-FES mapped ING-FES Sales Location

Individual Public Limited

Proprietorship Others Specify) (Pls

Yes Yes Yes

Prepaid By Name & Designation

Verified By Name & Designation

Delegation for Incentive Payouts to Influencing Agents:

Competent Authority to authorize incentive payouts to Influencing Agents would be as follows:

Capital Local Area Net Exchange Margin Retention over IBR

Area Manager Regional Sales Manager Head of FES

Format for agreement with influencing agent

Sub- Commercial Proposal for Foreign Exchange Services

CHAPTER 3 REVIEW OF LITERATURE

Chapter 4 RESEARCH METHODOLOGY

Exploratory research Descriptive research Causal research

-ness of standing of in Staff requiremen Document

Customer satisfactio n (H1)

Satisfaction Satisfaction level. b) There is a

Satisfaction level. c) There is a

Customer Satisfaction level. Page 62

significant the Accuracy in