Final

A Study of Foreign Exchange Transactions of
Punjab National Bank, Lucknow Region

from October 2007-October 2008
A Project Report Submitted in partial fulfillment of the requirements

for the degree of Master of Business Administration [MBA(IB)]
Major Project
Done by
Prerna Saini
07MIB026
Under the Guidance of

Dr. C. Annadurai, MA, MBA, Ph.D
Professor
MAY 2009
VIT Business School

fostering innovation
VIT
UNIVERSIT
Y
(Estd. u/s 3 of UGC Act 1956)
Vellore - 632 014, Tamil

1
Nadu, India
CERTIFICATE
This is to certify that the study titled ‘A Study of Foreign Exchange Transactions of
Punjab National Bank, Lucknow Region from October 2007-October 2008’ is submitted
by Ms. Prerna Saini, Reg. No. [07MIB026] to VIT Business School, VIT University,
Vellore in partial fulfilment of the requirements for the degree of Master of Business
Administration is a bonafide record of work carried out by him / her under my
supervision. The contents of this study, in full or in parts have not been submitted in any
form to any other institute or university for the award of any degree or diploma
Programme Manager Faculty Guide
Internal Examiner External Examiner
2
Declaration
I, Prerna Saini, a Bonafide student of the VIT Business School, VIT University, Vellore,
hereby declare that the project titled “A Study of Foreign Exchange Transactions of
Punjab National Bank, Lucknow Region from October 2007-October 2008” in partial
fulfillment of the requirements of the Degree of Master of Business Administration of the
VIT University, is his/her original work.
Date:
Place: Vellore
Prerna Saini
3
ACKNOWLEDGEMENT
I would like to acknowledge my deepest gratitude towards all those people who helped
me in the completion of this project. The success of this study would not have been
possible without the help and guidance of these people. They have played a very
important role in making this Institutional training an enriched experience.
First and foremost I would like to express my acknowledgement to our Chancellor,

Shri G. Vishwanathan without whose inspiration I would not have been able to
complete this training successfully.
I would like to express my deep gratitude to Dr. Anand. A. Samuel, Dean VIT- BS, for
his motivation for doing this summer training.
I would also like to thank Prof. Dr. K.T. Rengamani, Associate Dean for inspiring us to
do this training with full enthusiasm and also helping in all possible ways for completing
the training.
I am also pleased to express my sincere thanks and deep gratitude to my faculty guide
Dr. C. Annadurai, Professor, VIT-BS for his keen interest in this study, who offered her
noble advice and gave me valuable suggestions throughout the project work.
I take this opportunity to express my sincere and heartfelt thanks to Mr. Saxena, Chief
Manager, Punjab National Bank, Lucknow, for having given me the opportunity to
complete this project. My deepest regards are also to Mr. A K Sahu, Head of Foreign
Exchange Department, Punjab National Bank, HAL Branch, under whose guidance I
completed my project and who showed complete faith in me and offered me to do my
project here.
Prerna Saini
07MIB026
4
CONTENTS
Chapter 1 - Introduction 1
1.1 Meaning of Foreign Exchange Transactions 1
1.2 Nature of Foreign Exchange Transactions 4
1.3 Foreign Exchange Market in India 6
1.4 Statement of Problem 14
1.5 Objectives 15
1.6 Methodology 16
1.7 Limitations of the Study 17
Chapter 2 – Company Profile 19
2.1 Punjab National Bank – Profile 19
2.2 Foreign Exchange Transactions at Punjab National Bank 21
2.3 International Network of Punjab National Bank 24
2.4 Literature Review 25
Chapter 3 – Data Analysis and Interpretation 28
3.1.1 Analysis of Inter-day variations in the Selling Rate of Dollar
over the 12 months 28
3.1.2 Analysis of Inter-Day Variations in the Selling Rate
of Euro over the 12 Months 29
3.1.3 Analysis of Inter-Day Variations in the Selling Rate

of Pound over the 12 Months 30
5
3.1.4 Analysis of Inter-Day Variations in the Purchase Rate
of Dollar over the 12 Months 31
of Euro over the 12 Months 32
of Pound over the 12 Months 33
3.2.1 – 3.2.13 Analysis of Intra-Day Variations in Dollar Exchange
(Sale) Rate 34
3.2.14 – 3.2.26 Analysis of Intra-Day Variations in Euro Exchange
(Sale) Rate 47
3.2.27 -3.2.39 Analysis of Intra-Day Variations in Pound Exchange
(Sale) Rate 60
3.2.40 – 3.2.52 Analysis of Intra-Day Variations in Dollar Exchange
(Purchase) Rate 73
3.2.53 Analysis of Intra-Day Variations in Euro Exchange (Purchase)
Rate for the Months of October 2007 – October 2008 85
3.2.54 Analysis of Intra-Day Variations in Pound Exchange (Purchase)
Rate for the Months of October 2007 – October 2008 86
3.3.1 Analysis of Currency-wise Number of Foreign exchange Transactions
of PNB, Lucknow Region from October 2007-October 2008 87
3.3.2 Analysis of Currency-wise Amount of Foreign exchange Transactions
of PNB, Lucknow Region from October 2007-October 2008 89
3.4 Analysis of Profitability of the Foreign Exchange Transactions by
6
studying the commission earned by the Bank 91
3.5 Analysis of Composition of Foreign Exchange Transactions on
the basis of Purpose 93
Chapter 4 95
4.1 Summary 95
4.2 Findings 96
4.3 Conclusion 98
Chapter 5 99
5.1 References 99
5.2 Annexure
7
List of Tables
S. No. Description P. No.
1.1 Codes for Foreign Currencies 3
3.1 Inter-day variations in the Selling rate of Dollar over the 12 months 28
3.2 Inter-day variations in the Selling rate of Euro over the 12 months 29
3.3 Inter-day variations in the Selling rate of Pound over the 12 months 30
3.4 Inter-day variations in the Purchase rate of Dollar over the 12 months 31
3.5 Inter-day variations in the Purchase rate of Euro over the 12 months 32
3.6 Inter-day variations in the Purchase rate of Pound over the 12 months 33
3.7 Intra-Day Variations in Dollar Exchange (Sale) Rate for the Month of 34
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
3.20 Intra-Day Variations in Euro Exchange (Sale) Rate for the Month of 47
October 2007
November 2007
December 2007
January 2008
8
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
3.33 Intra-Day Variations in Pound Exchange (Sale) Rate for the Month of 60
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
3.46 Intra-Day Variations in Dollar Exchange (Purchase) Rate for the 73
Month of October 2007
9
Month of November 2007
Month of December 2007
Month of January 2008
Month of February 2008
Month of March 2008
Month of April 2008
Month of May 2008
Month of June 2008
Month of July 2008
Month of August 2008
Month of September 2008
Month of October 2008
3.59 Intra-Day Variations in Euro Exchange (Purchase) Rate for the 85
Months of October 2007-October 2008
3.60 Intra-Day Variations in Pound Exchange (Purchase) Rate for the 86
3.61 Currency-wise Number of Foreign exchange Transactions 87
3.62 Currency-wise Amount of Foreign exchange Transactions 89
3.63 Analysis of Currency-wise Composition of the Commission earned 91
by the bank on various foreign exchange transactions
3.64 Analysis of Composition of Foreign exchange Transactions on the 93
basis of Purpose
10
List of Charts
S. No. Description P. No.
3.1 Avegare Selling Rate of Dollar over the 12 months 28
3.2 Avegare Selling Rate of Euro over the 12 months 29
3.3 Avegare Selling Rate of Pound over the 12 months 30
3.4 Avegare Purchase Rate of Dollar over the 12 months 31
3.5 Avegare Purchase Rate of Euro over the 12 months 32
3.6 Avegare Purchase Rate of Pound over the 12 months 33
3.7 Currency-wise number of Foreign Exchange Transactions 88
3.8 Currency-wise Amount of Foreign Exchange Transactions 90
3.9 Analysis of Currency-wise Composition of the Commission 92
earned by the bank on various foreign exchange transactions
3.10 Analysis of Purpose-wise Composition of Foreign Exchange 94
transactions
11
Introduction
In this study the foreign exchange transactions of Punjab National Bank, Lucknow are
analyzed on a day to day basis for the period of one year i.e. from 16 October 2007 to 16
October 2008. This means analyzing the inward and outward remittances of foreign
currency in the bank for 364 days. The study involves analyzing the trends (if any) in the
foreign exchange transactions of the bank carried out by the bank in the Lucknow
Region. This includes analysis of revenue generation pattern for the bank through
commission charged and also through spread between the ask rate and the bid rate
charged by the bank. The purpose of transaction also forms and important part of the
study and an analysis has been done on the percentage composition of the purpose for
which foreign exchange has been transacted. The study includes finding out the trends in
the change in foreign exchange rate of rupee with respect of other foreign currencies and
also if there have been any intraday rate changes and inter day rate changes. For this
purpose the data was collected from the bank records for the stated period.
1.1 Meaning of Foreign Exchange Transaction
Foreign exchange has two meaning. First it refers to the currency of a foreign country.
Second it means exchange of currencies of two countries at a certain rate known as
exchange rate. The foreign exchange transactions involves buying and selling of foreign
currencies. The foreign exchange transactions may be spot or forwards.
In order to minimize the risk and maximize the returns the investors globally are trying to
find out new investment strategies. Among the most fruitful markets opening up to
traders is the Foreign Exchange market. Identifiable trading patterns and comparatively
low margin requirements have proved to be a trading opportunity for the traders.
Foreign exchange is traded without the constraints of a central physical exchange.

Transactions are instead conducted via telephone or online. Foreign Exchange Market
has become by far the largest marketplace in the world. Average volume in foreign
exchange exceeds $1.5 trillion per day versus only $25 billion per day traded on the New
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York Stock Exchange. The advantage of these transaction is that they can be executed
quickly and with low transaction costs (i.e., a small bid/ask spread).
As a result, foreign exchange trading has long been recognized as a superior investment
opportunity by major banks, multinational corporations and other institutions. Today,
this market is more widely available to the individual trader than ever before.
Functions of Foreign Exchange Market
The foreign exchange market performs three major functions. These are:
• Transfer of purchasing power – it facilitates trade between parties living in

different countries.
• Providing a source of credit – specialized instruments like bankers’ acceptance
and letter of credit provides for financing the inventory in transit.
• Providing ‘Hedging’ facilities – it helps in transferring risk to someone who is
more willing to take it.
Foreign Exchange Quotes
The foreign exchange quotes can either be ‘direct’ or can be ‘indirect’. A direct quote is a
home currency price of a unit of foreign currency. And an Indirect quote is a foreign
currency price of a unit of home currency.
There are two types of quotes in the foreign exchange market. These are as follows:
Ask: Price at which broker/dealer is willing to sell. It is same as "Offer".
Bid: Price at which broker/dealer is willing to buy.
Bid/Ask Spread (or "Spread"): The distance between the Bid and Ask price. It is the
difference in the bid price and the ask price. The dealers bid at one price and ask at a
slightly higher price, thus creating a spread and making profit.
13
Codes for Foreign Currencies
All the currencies of the countries are given some international currency codes. Some of
the major currencies of the world are:
Symbol Currency
GBP Great Britain Pound
USD US Dollar
EUR Euro
JPY Japanese Yen
CHF Swiss Franc
CAD Canadian Dollar
AUD Australian Dollar
NZD New Zealand Dollar
GLD Spot Gold
SLV Spot Silver
DKK Dutch Krone
SGD Singapore Dollar
INR Indian Rupee
ZAR South African Rand
Table 1.1: Codes for Foreign Currencies
14
1.2 Nature of Foreign Exchange Transactions
The transactions in the foreign exchange market can be executes as ‘spot transaction’,
‘forward transaction’ or ‘swap transactions’. These can be described as below:
• SPOT TRANSACTION – A spot transaction is the purchase of foreign

exchange, with delivery and payment between the parties taking place on the first
following business day. The date of settlement is called value date.
• FORWARD TRANSACTION – A outright forward transaction requires

delivery at a future value date of a specified amount of one currency for a
specified amount of another currency. The exchange rate is settled at the time of
agreement but payment and delivery are made only at maturity.
• SWAP TRANSACTION – A Swap transaction is a simultaneous purchase and

sale of a given amount of foreign exchange for two different value dates.
- Forward – Forward Swap: It is a kind of swap transaction in which another

currency is borrowed on a fully collateralized basis.
Foreign Currency Derivatives
Foreign currency derivatives are those instruments which derive their value from some
underlying asset like, currency, commodity or a stock. These are two important tools for
hedging and speculation. Most common foreign currency financial derivatives are:
• Foreign Currency Futures – A foreign currency futures contract is an alternative

to a forward contract that calls for the future delivery of a standard amount of
foreign exchange at a fixed time, place and price.
• Currency Options – A foreign currency option is a contract giving the option

purchaser the right, but not the obligation, to buy or sell a given amount of foreign
exchange at a fixed price per unit for a specified time period. There are two types
of currency options:
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o Call Option – It is an option to buy foreign currency but not an obligation
to buy.
o Put Option – It is an option to sell foreign currency but not an obligation

to sell.
The buyer of an option is called holder and the seller of an option is called
writer.
Foreign Currency Speculation
Speculation is an attempt to make profit by trading on expectations about prices in the

future. It involves buying in the spot market and selling in the future on an expectation
that the prices will rise in the future. Speculation can be done in the following ways:
• Speculating in the Spot Market
• Speculating in the Forward Market
• Speculating in the Options Market
Hedging
Hedging involves protecting from foreign exchange risk. In this the owner purchases a
contract which will rise in value in the future and offset a drop in value of another
contract. This mechanism does not mean making profit. But it just protects from loss.
16
1.3 Foreign Exchange Market in India
Foreign Exchange Market in India works under the central government which has wide
powers to control transactions in foreign exchange in India.
The Foreign Exchange Management Act, 1999 or FEMA regulates the whole foreign
exchange market in India. The foreign exchange market in India is regulated by the
reserve bank of India through the Exchange Control Department.
Indian authorities are able to manage the exchange rate easily, only because foreign
exchange transactions in India are so securely controlled. Since liberalization, foreign
exchange markets in India have witnessed explosive growth in trading capacity. The
importance of the exchange rate of foreign exchange in India for the Indian economy has
also been far greater than ever before. While the Indian government has clearly adopted a
flexible exchange rate regime, in practice the rupee is one of most resourceful trackers of
the US dollar.
The foreign exchange market in India is growing very rapidly, since the annual turnover
of the market is more than $400 billion. This foreign exchange transaction in India does
not include the inter-bank transactions. The transactions are made on spot and also on
forward basis, which include currency swaps and interest rate swaps.
The Indian foreign exchange market is made up of the buyers, sellers, market mediators
and the monetary authority of India. The main center of foreign exchange in India is
Mumbai, the commercial capital of the country. The other centers for foreign exchange
transactions in India are the major cities of Kolkata, New Delhi, Chennai, Bangalore,
Pondicherry and Cochin.
Foreign Exchange Dealers Association of India (FEDAI) is a voluntary association that

also provides some help in regulating the market. The Authorized Dealers and the
attributed brokers are qualified to participate in the foreign Exchange markets of India.
When the foreign exchange trade is going on between Authorized Dealers and RBI or
between the Authorized Dealers and the overseas banks, the brokers usually do not have
17
any role to play. Besides the Authorized Dealers and brokers, there are some others who
are provided with the limited rights to accept the foreign currency or travelers` cheque,
they are the authorized moneychangers, travel agents, certain hotels and government
shops.
The Foreign Exchange Market in India is a flourishing ground of profit and higher
initiatives are taken by the central government in order to strengthen the foundation.
Major Players in the Foreign Exchange Market
Participants of the foreign exchange market are the players that operate and engage in
foreign exchange transactions. The major participants of the foreign exchange market in
India are classified into five major categories. These are as follows:
• Banks and Non-banks foreign exchange dealers(Authorized Dealers)
The banks and the non-bank foreign exchange dealers are also known as
authorized dealers. They make profit through the spread that exists between the
ask price and bid price. ADs are banks authorized by the RBI to do foreign
exchange business. Foreign Exchange Dealers Association of India (FEDAI)
forms the ground rules for the commission and other important aspects of foreign
exchange dealers in India.
• Customers
The customers form a major component of the foreign exchange market in India.
They include various Public Sector Units and Private Sector Corporations. These
days even Foreign Institutional Investors have emerged as an important
component of the Foreign exchange market.
18
• Reserve Bank of India
Reserve Bank of India is the central bank of India. RBI forms the rules and
regulations which guide the operation of foreign exchange market in India. The
main powers of RBI are:
• Transfer or issue of any foreign security by a person resident in India;
• Transfer or issue of any security by a person resident outside India;
• Transfer or issue of any security or foreign security by any branch, office or

agency in India of a person resident outside India;
• Any borrowing or lending in foreign exchange in whatever form
• Any borrowing or tending in rupees in whatever form or by whatever name called

between a person resident in India and a person resident outside India;
• Deposits between persons resident in India and persons resident outside India;
• Export, import or holding of currency or currency notes;
• Transfer of immovable property outside India, other than a lease not exceeding
five years, by a person resident in India;
• Acquisition or transfer of immovable property in India, other than a lease not

exceeding five years, by a person resident outside India;
• Giving of a guarantee or surety in respect of any debt, obligation or other liability

incurred by a person resident in India and owed to a person resident outside India
or by a person resident outside India.
Without the permission of Reserve Bank of India no person can:
• Deal or transfer any foreign exchange or foreign security to any unauthorized

person
19
• Make any payment in any manner to any person who resides outside India. No
payments can even be made for the credit of the particular person.
• Receive any payment on behalf of a person residing outside India through an

authorized person.
• Enter into any sort of financial transaction in India to acquire any asset outside
India by any person.
• Acquire, hold, own, possess or transfer any foreign exchange, foreign security or
any immovable property situated outside India.
Important Returns to be submitted to RBI by Authorized Dealers

pertaining to foreign exchange
R-Return
This statement reports the total inflow and outflow of Foreign Exchange through an
Authorized Dealer for the particular fortnight. There are two types of R-returns:
• R-Return(Nostro) – statement for the bank’s account with foreign banks in

foreign countries.
• R-Return(Vostro) – statement for the foreign banks which have accounts in the
Indian banks in India.
The bank has to submit the R-return to the RBI within 7 days from the end of particular
fortnight as a Hard Copy, email and also in a floppy to the regional RBI office. Failing
which there is a penalty on the following basis:
• Upto Rs. 10000 or,
• Upto Rs. 2000 for everyday on continuing default.
For submitting this return the banks have to maintain specific records in the notified
format by the RBI. They have to record the incoming and outgoing foreign currency
20
classified on the basis of purpose and also have to maintain Mirror Account for the
Nostro Account they have with the foreign Bank. The statement has Sales, Purchases,
Opening Balance and Closing Balance of foreign currency for a period of 15 days.
XOS Statement
This statement submitted to RBI reports the export outstanding bills beyond 6 months
from the date of export. This statement is submitted on a half yearly basis and is
cumulative, i.e. it includes the export bills included in the last statement and is still
outstanding. The Authorized dealers should follow up with the defaulting exporter
immediately failing which the RBI can impose penalty on the Authorized Dealers.
BEF statement
This statement includes a list of all the exporters for non-submission of overdue Bill of
Entry within 6 months from the date of shipment. This statement is submitted to RBI on
half yearly basis and in non-cumulative i.e. exporters mentioned in the last statement are
not included again in the next statement.
FEDAI GUIDELINES
FEDAI was set up in 1958 as an Association of banks dealing in foreign exchange in

India (typically called Authorised Dealers or ADs) as a self regulatory body and is
incorporated under Section 25 of The Companies Act, 1956. Its major activities
include framing of rules governing the conduct of inter-bank foreign exchange
business among banks vis-à-vis public and liaison with RBI for reforms and
development of foreign exchange market.
The functions of FEDAI are as follows:
• Guidelines and Rules for Forex Business.

• Training of Bank Personnel in the areas of Foreign Exchange Business.
• Accreditation of Forex Brokers
• Advising/Assisting member banks in settling issues/matters in their dealings.
21
• Represent member banks on Government/Reserve Bank of India/Other Bodies.
• Announcement of daily and periodical rates to member banks.
FEMA Guidelines
The Foreign Exchange Management Act, 1999 has come into effect on June 1, 2000 and
has replaced the Foreign Exchange Regulation Act, 1973 (FERA). FEMA is a civil law.
FEMA defines capital account and current account transactions, while power is delegated
on Reserve Bank of India to regulate capital account transactions.
Objectives of FEMA
• Facilitate external trade and payments

• Promote orderly maintenance of the foreign exchange market in India.
• Relax controls on joint ventures, collaborations, subsidiary establishments and the
like both in India by foreigners and abroad by Indians.
FEMA defines certain terms which have been used throughout the ACT as follows:
• Authorized Person : It includes an authorized dealer, money changer, off-shore

banking unit or any other person for the time being authorized to deal in foreign
exchange,
• Capital Account Transaction: It means a transaction which alters the assets or
liabilities outside India of persons resident in India. It also includes transactions
that alter assets or liabilities in India of persons resident outside India.
• Currency: It is an assortment of currency notes, postal notes, postal orders,
money orders, cheques, drafts, travelers cheques, letter of credit, bills of exchange
and promissory notes.
• Currency Notes: It includes cash in the form of coins and bank notes.
• Current Account Transactions: It means a transaction other than capital account
transaction.
• Export: It simply means exporting of any goods or provision of services from
India to any person outside India.
22
• Financial Transaction: It means making any payment to, or for the credit of any
person, or receiving any payment for, by order or on behalf of any person, or
drawing, issuing or negotiating any bill of exchange or promissory note, or
transferring any security or acknowledging any debt.
• Foreign Currency: It denotes any currency other than the Indian currency.
• Foreign Exchange: Money instruments used to make payments between
countries.
• Foreign Security: Any security in the form of shares, stocks, bonds, debentures
or any other instrument denominated or expressed in foreign currency. It is only
applicable where redemption or any form of return such as interest or dividends is
payable in Indian currency.
• Import: It simply defines a process that facilitates bringing of goods or services
into India.
• Indian Currency: Currency expressed in Indian rupee.
• Person: It includes an individual, a Hindu undivided family, a company, a firm,
an association of persons or a body of individuals, whether incorporated or not,
every artificial juridical person and any agency, office or branch owned or
controlled by such person.
• Person Resident in India: He is a person who lives a minimum of 182 days in
India during the preceding financial year.
• Repatriate to India: It means bringing into India the realized foreign exchange
and selling of such foreign exchange to an authorized person in India.
• Security: It means shares, stocks, bonds and debentures, Government securities,
savings certificates, deposit receipts in respect of deposits of securities and units
of the Unit Trust of India or of any mutual fund and includes certificates of title to
securities, but does not include bills of exchange or promissory notes other than
Government promissory notes or any other instruments which may be notified by
the Reserve Bank as security for the purposes of this Act.
• Service: It means service of any description which is made available to potential
users and includes the provision of facilities in all terms.
23
• Transfer: It includes sale, purchase, exchange, mortgage, pledge, gift, loan or
any other form of transfer of right, title, possession or lien.
24
1.4 STATEMENT OF PROBLEM
The topic of this study is ‘A study on the foreign exchange transactions of Punjab
National Bank, Lucknow region from October 2007 to October 2008’. In this study the
foreign exchange transactions of Punjab National Bank in in Lucknow Region are
analyzed for a period of one year. Here the data collected constitutes day to day
transactions of foreign exchange that the bank dealt with during the given period.
Foreign exchange market is one of the most growing and attractive market for the
investors which has with time become one of the most rewarding markets. The Punjab
National Bank has been involved in various foreign exchange transactions in Lucknow
Region where it basically deals on behalf on its clients. The major activities in foreign
exchange includes payment for import, receipts for exports, traveler’s cheques, currency
buying and selling.
The objective of this research is to study and analyze these transactions by classifying the
data on various basis. Through this research it is to be identified that what are the major
currencies that are being dealt in the bank, the most profitable transactions carried out in
the bank and the trend followed by the exchange rates by analyzing the inter-day and
intra-day variations in the foreign exchange rate and the purpose for which the foreign
exchange transactions are carried out.
25
1.5 OBJECTIVES
The research project has the following objectives. The basis of study is a day to day data
of the foreign exchange transaction of the Punjab National Bank in the Lucknow Region
for 364 days for the period 16 October 2008 – 2009.
1. To analyze the inter-day fluctuations of foreign exchange transactions of Punjab

National Bank in the Lucknow Region.
2. To analyze the intra-day fluctuations in the foreign exchange transactions of Punjab

3. To analyze the composition of currency of foreign exchange transaction in the Punjab

4. To study the profitability of the foreign exchange transactions for the Punjab National
Bank in the Lucknow Region.
5. To study the foreign exchange transactions on the basis of Purpose of transactions

carried out in the Punjab National Bank in Lucknow Region.
26
1.6 METHODOLOGY
The study requires data relating to foreign exchange transactions on a day to day basis.
This includes data of both sale and purchase of foreign exchange by the bank within a
specified period. The data collected includes the following:
Sources of Data
The source of data collected for the study is the records of the bank for a 364 day period
starting from 16 October 2007 to 16 October 2008. The bank maintains a record of daily
transactions in separate books. The data for this study has been collected from all the
books prepared by the bank with respect to foreign exchange.
Data Collected
The data is collected from the records of the bank from the books prepared by them for
the period of 16 October 2007 to 16 October 2008. The various heads under which the
data is collected are:
• Imports
• Exports
• Issue of Foreign Currency Notes/ Travelers’ cheques
• Online telegraph transfer (OTT)
• Receipt of foreign currency
• Return of foreign currency notes/ travelers’ cheques issued
Classification of Data
The data collected has been classified on various basis for the purpose of analyzing it.
These basis are:
• Number of transactions of various currencies on a month to month basis.
27
• Amount of various currencies transacted in terms of Rupees on a month to month
basis.
• Number of transactions of various currencies on the basis of purpose of

transaction.
• Amount of commission charged on the foreign exchange transactions in terms of

Rupees on a month to month basis.
Statistical Tools used to analyze the data
For studying the trends of foreign exchange transactions the following tools of technical
analysis are used:
• Standard Deviation
• Coefficient of Variation
• Arithmetic Mean
28
1.7 LIMITATIONS OF THE STUDY
The main limitations during this study are as follows:
• It was an in-house study of the foreign exchange transactions within the bank
premises.
• Majority of the foreign exchange transactions pertain to various HAL units

situated in UP.
• Imports transactions are maximum.
• Since bank deals mainly with HAL transactions and HAL business relates to
specific countries like USA, UK and France, so major transactions were found in
Dollar, Euro and Pound.
29
2.1 Punjab National Bank - Profile
Punjab National Bank(PNB) was established in 1895 at Lahore, undivided India. It was
nationalized in nationalized in July 1969 along with 13 other banks. Punjab National
Bank offers a wide variety of banking services which include corporate and personal
banking, industrial finance, agricultural finance, financing of trade and international
banking. The clients of PNB include conglomerates, medium and small industrial units,
exporters, non-resident Indians and multinational companies.
Punjab National Bank serves over 3.5 crore customers through 4540 Offices including
421 extension counters - largest amongst Nationalized Banks. It is one among 300 global
companies and seven Indian companies which are expected to emerge as challengers to
World’s leading blue chip companies.
Strong correspondent banking relationship which Punjab National Bank maintains with
over 200 leading international banks all over the world enhances its capabilities to handle
transactions world-wide. Besides, bank has Rupee Drawing Arrangements with 15
exchange companies in the Gulf and one in Singapore. Bank is a member of the SWIFT
and over 150 branches of the bank are connected through its computer-based terminal at
Mumbai. With its state-of-art dealing rooms and well-trained dealers, the bank offers
efficient foreign exchange dealing operations in India.
Punjab National Bank(PNB) was established in 1895 at Lahore, undivided India. It was
nationalized in nationalized in July 1969 along with 13 other banks. Punjab National
Bank offers a wide variety of banking services which include corporate and personal
banking, industrial finance, agricultural finance, financing of trade and international
banking. The clients of PNB include conglomerates, medium and small industrial units,
exporters, non-resident Indians and multinational companies.
Punjab National Bank serves over 3.5 crore customers through 4540 Offices including
421 extension counters - largest amongst Nationalized Banks. It is one among 300 global
30
companies and seven Indian companies which are expected to emerge as challengers to
World’s leading blue chip companies.
The bank trades in the following currencies majorly:
• Euros
• Sterling Pound
• Japanese Yen
• Swiss Franc
Other foreign currencies may be traded upon market availability.
The Punjab National Bank, Hal Branch, Lucknow is the only branch of the bank in
Lucknow which deals with the foreign exchange in the UP Circle. Imports and Exports
forms a major percentage of the nature of foreign exchange transactions carried out at the
bank. The foreign exchange transactions both sales and purchase amount to more than Rs
350 crore annually. Main business of the bank comes from Hindustan Aeronautics
Limited, Lucknow which imports aeronautical parts from USA, UK, France, etc.
31
2.2 Foreign Exchange Transactions at Punjab National Bank
Inward Remittances
• Exports
• Inward remittances from close relatives abroad
• Encashment of foreign currency notes/ Foreign Travellors Cheque
• Other inwards remittances
Outward Remittances
• Imports
• Sale of Foreign Currency Notes/ Travellors Cheque
• Remittances towards/ in respect of exports
• Other outward remittances towards education/treatment abroad/ gift/ maintenance

of close relative abroad.
• Basic Travel Quota and Business Tours
Various Export and Import Bills used by the Bank
The imports and exports form the most important component of the foreign exchange
transactions of the bank. The various bills used by the bank for payment and collections
are given as below and also a summary of the import and export procedures to be
followed in India are given.
Import Bills:
• FIBP – Foreign Inward Bills for Payment
• FIBP(Advance/ Direct Payment) - Foreign Inward Bills for Payment paid as

Advance or in case of Direct payment to the exporter
32
• FIBNLC – Foreign Inward Bills Negotiated under a Letter of Credit
• FIBD – Foreign Inward Bills Discounted
Export Bills:
• FOBC – Foreign Outward Bills for Collection
• FOBC(Advance/ Direct Payment) - Foreign Outward Bills for Collection paid in

Advance or directly to the importer.
• FOBP – Bills Purchased
• FOUBP – Foreign Outward Usance Bills Purchased
• FOBNLC – Foreign Outward Bills Negotiated under Letter of Credit
• FOBD – Foreign Outward Bills Discounted
33
Various Forms Used for Export of Goods from India
G R / SDF / SOFTEX Form under FEMA - Reserve Bank of India has prescribed GR /
SDF form under FEMA. “G R” stands for ‘Guaranteed Receipt’ form, while SDF stands
for 'Statutory Declaration Form’). SDF form is to be used where shipping bills are
processed electronically in customs house, while GR form is used when shipping bills are
processed manually in customs house.
Other documents required for export - Exporter also has to prepare other documents like
(a) Four copies of Commercial Invoice
(b) Four copies of Packing List
(c) Certificate of Origin or pre-shipment inspection where required
(d) Insurance policy.
(e) Letter of Credit
(f) Declaration of Value
(g) Excise ARE-1/ARE-2 form as applicable
(h) GR / SDF form prescribed by RBI in duplicate
(i) Letter showing BIN Number.
34
2.3 International Network of Punjab National Bank
The Bank maintains strong banking relationship with over 200 leading international
banks all over the world. This helps it in enhancing its capabilities to handle transactions
world-wide. The bank has Rupee Drawing Arrangements with 15 exchange companies in
the Gulf and one in Singapore. PNB is a member of the SWIFT and over 150 branches of
the bank are connected through its computer-based terminal at Mumbai. With its state-of-
art dealing rooms and well-trained dealers, the bank offers efficient foreign exchange
dealing operations in India.
The bank has various foreign currency Nostro accounts in various countries. These are:
• For US Dollar – Nostro account with ABN Amro, New York

• For Euro – Nostro account with Deutsche Bank, Frankfurt
• For GB Pound – PNB has its international subsidiary in London by the name
Punjab National Bank International Limited.
Various foreign banks also have Vostro Accounts in PNB, India.
35
2.4 Literature Review
A research titled ‘Survey of foreign exchange and derivatives market activity in Canada’
was conducted in April 2001 by the Bank of Canada to study the foreign exchange
transaction of all the banks in Canada. This was done in coordination with the Bank for
International Settlements (BIS).
The survey included all the financial institutions in Canada active in the
wholesale foreign exchange and derivatives markets were surveyed which consisted of 28
financial institutions and foreign exchange and fixed-income brokers. With respect
to foreign exchange, the survey covered spot transactions, outright
forwards, foreign exchange swaps, currency swaps, and over-the-counter (OTC) options.
The interest rate products covered were forward rate agreements, interest rate swaps, and
OTC options. Participants were also asked to identify transactions by currency and type
of counterparty.
The results of the research were presented under the following heads. turnover of
traditional foreign exchange transactions, currency swaps and
OTC foreign exchange options, currency distribution, type of transaction and
counterparty transactions.
Another research paper ‘Statistics on foreign exchange transactions--new insight into

foreign exchange markets’ conducted by Meyer, Erik, Skjelvik, Janett in July 2006 was
published to study the activities of the sale and purchase of NOK currency. This study
included monitoring of the foreign exchange transactions over a period of time. The
statistics on foreign exchange transactions are based on daily transaction data on the
purchase and sale of NOK for foreign exchange from the largest banks. The transactions
are classified according to counter-party sector, type of contract (instrument) and
maturity. Through contact with market participants, Norges Bank was able to identify the
causes of the shifts captured by the statistics. In the surveillance of financial stability,
statistics provide a new source of information on turnover and maturity distribution in the
currency hedging market for NOK.
36
The collection of data for the new foreign exchange transaction statistics started in
October 2005 and figures were collected up to end-January 2006. For the research the
authors have taken the theoretical background in which they say that the foreign
exchange transactions are based on an analytical model called order flow analysis. Order
flows are defined as the difference between the value of buy and sell orders initiated by
customers in a period, i.e. customers' net foreign exchange purchases.
And there is also a mention of factors that determine the exchange rate which are direct
channel and indirect channel. Direct channel includes those information which are
publicly available and indirect channel includes the private information which the public
doesn’t know about.
The research by Yu Hsing titled ‘Analysis of Exchange Rate Fluctuations for Thailand’
conducted in Thailand in 2007 established that there is a negative relationship between
the foreign exchange rate and international interest rate. The samples were taken from
1997 Q1 to 2004 Q3. The exchange rate was expressed in US Dollar per Thai Bhat. In the
paper the extended macroeconomic model which includes three equations for good
market, the money market and uncovered interest rate parity.
Various factors like monetary policy, fiscal policy, stock market performance, the foreign
interest rate, the expected inflation rate, the expected exchange rate and the relative price
index are considered for analyzing the effect on the nominal exchange rate.
According to a study conducted by Vepa Kamesan in 2007 titled ‘Forex Markets in

India’, in India financial market segments into money market, foreign exchange market,
government securities market and capital market. A comprehensive package of reforms
was given by Narsimha Committee in 1991. It was the starting poiting of gradual
deregulation of financial sector and integration of various financial markets. By the
recommendation of Sodhini Committee of forex market caused the integration between
call money market and forex market. The linkage between the call money and forex
market is in a small way in the past as banks are permitted to maintain Nostro Account
Surpluses. This is further improved by introduction of FCNR(B) scheme and particularly
37
after the permission was according to borrow and lend overseas capital upto 15% of Tier
I capital.
Currently some critical data about forex market are:
• Average monthly turnover in the merchant segment of forex market increased

from US$ 20 billion in 1999-2000 to US$ 23 billion in 2000-2001
The major issue that is debatable is forex market participants is the issue of long term
rupee – foreign currency swaps. This was permitted in 1997 as a hedging mechanism for
corporate who have long term currency exposures. The market players demand for
greater freedom in the investment of foreign currency funds and increasing tenure of
FCNR(B).
In an article ‘Development of Forex Markets in India’, published in 2007, KJ Udeshi

traces the development of the foreign exchange markets in India. It began when RBI
allowed the banks to undertake the intraday trading in foreign exchange in 1978. The
next major step in the foreign exchange market was the reforms of 1991. One of the most
important committees formed is Sodhani committee which gave recommendations to
develop, deepen and widen the forex market.
The author then went on to study the foreign exchange market structure. What type of
transactions are carried out is found out. The participants of the market are
intermediaries, the end users, the individuals, corporate, institutional investors, etc. There
seems to be no established results regarding relationship of financial liberation and
growth. Therefore industry analysts say that trade liberation should take place before
financial liberation.
The author has also given the disclosure norms and transparency initiatives that have
been taken by RBI to ensure the effective functioning of the foreign exchange market in
India.
38
3.1.1Analysis of Inter-Day Variations in the Selling Rate of Dollar over
the 12 Months
Avg.
Total Dollar Standard Coefficient of
Date Selling
Amount Deviation Variation
Rate
Oct-07 862304.25 39.83 0.21 0.54
Nov-07 737152.3 39.56 0.28 0.72
Dec-07 515271.12 39.62 0.12 0.31
Jan-08 1619997.72 39.52 0.22 0.55
Feb-08 656971.55 39.84 0.31 0.78
Mar-08 1136001.3 40.49 0.25 0.62
Apr-08 383819.65 40.23 0.22 0.54
May-08 1251526.44 42.23 0.94 2.22
Jun-08 2810935 42.99 0.69 1.62
Jul-08 338567.73 42.81 0.65 1.51
Aug-08 1006872.3 43.07 0.75 1.75
Sep-08 1519823.5 45.18 0.76 1.68
Oct-08 387981.71 48.04 0.55 1.14
Table 3.1: Inter-day variations in the Selling rate of Dollar over the 12 months
Source: The records of Punjab National Bank, Lucknow from Oct 2007- 2008
Interpretation: The inter-day Dollar-Rupee exchange rate variations for May 2008, June
2008, July 2008, August 2008, September 2008 and October 2008 is higher as compared
to other months. The least variations in exchange rate can be observed in the month of
December 2007 and the highest variations are in May 2008.
Chart 3.1: Avegare Selling Rate of Dollar over the 12 months
Conclusion: The above graph shows an increase in the average Selling rate of Dollar
over the 12 months.
39
3.1.2 Analysis of Inter-Day Variations in the Selling Rate of Euro over
the 12 Months
Avg.
Total Euro Standard Coefficient of
Date Selling
Amount Deviation variation
Rate
Oct-07 514262.3 56.89 0.34 0.59
Nov-07 806245.43 58.32 0.74 1.27
Dec-07 1588171.19 57.89 0.46 0.80
Jan-08 1137677.4 58.44 0.35 0.59
Feb-08 1185311.13 58.99 1.00 1.69
Mar-08 1462429.38 63.33 0.72 1.14
Apr-08 1050254.8 63.57 0.29 0.46
May-08 1108392.79 66.04 1.68 2.55
Jun-08 1205083.4 66.93 1.09 1.63
Jul-08 3412952.22 67.92 0.86 1.27
Aug-08 2949810 64.75 0.93 1.43
Sep-08 1288631.32 65.36 1.52 2.33
Oct-08 7981187.02 65.74 0.41 0.63
Table 3.2: Inter-day variations in the Selling rate of Euro over the 12 months
Interpretation: The inter-day variations in the selling rate of Euro is higher in the
months of November 2007, Feb 2008, March 2008, May 2008, June 2008, July 2008,
August 2008 and September 2008. Whereas the variations in exchange rate is low in
other months of October 2007, December 2007, January 2008, April 2008 and October
2008. The least variations are in the months of October 2007 and January 2008 and the
highest are in the month of May 2008.
Chart 3.2: Avegare Selling Rate of Euro over the 12 months
Conclusion: The above graph shows that the exchange rate fluctuates during the month
of July 2008.. After initially increasing it falls after July 2008.
40
3.1.3 Analysis of Inter-Day Variations in the Selling Rate of Pound over
the 12 Months
Avg.
Total Pound Standard Coefficient of
Date Selling
Amount Deviation Variation
Rate
Oct-07 313980.08 81.33 0.30 0.37
Nov-07 1428598.34 82.04 0.90 1.10
Dec-08 1305508.76 79.85 0.86 1.07
Jan-08 1028744.67 77.99 0.51 0.65
Feb-08 666658.3 78.71 0.83 1.05
Mar-08 2548507.16 81.02 0.95 1.17
Apr-08 322119.52 79.51 0.48 0.61
May-08 1842404.44 83.24 1.77 2.12
Jun-08 997825.94 84.84 0.68 0.80
Jul-08 2502194.71 85.45 0.94 1.10
Aug-08 916260 81.57 0.83 1.01
Sep-08 238138.21 81.29 2.69 3.32
Oct-08 966993.47 84.10 0.88 1.04
Table 3.3: Inter-day variations in the Selling rate of Pound over the 12 months
Interpretation: The inter-day variations in the selling rate of Pound is higher in the
months of November 2007, December 2007, Feb 2008, March 2008, May 2008, July
2008, August 2008 and September 2008 and October 2008. Whereas, the variations in the
exchange rate are low in months of October 2007, January 2008, April 2008 and June
2008. The least variations are in the months of October 2007 and the highest are in the
month of September 2008.
Chart 3.3: Avegare Selling Rate of Pound over the 12 months
Conclusion: The above graph shows that the exchange rate fluctuates many times over
the 12 months. its highest during the month of July 2008 and lowest in January 2008.
41
3.1.4 Analysis of Inter-Day Variations in the Purchase Rate of Dollar
over the 12 Months
Avg.
Total Dollar Standard coefficient of
Date Purchase
Rate
Oct-07 24136.78 39.35 0.26 0.67
Nov-07 43089 38.99 0.34 0.86
Dec-07 29489.5 39.21 0.21 0.53
Jan-08 21763.4 39.29 0.12 0.31
Feb-08 29078.47 39.69 0.33 0.83
Mar-08 41751.50 40.35 0.16 0.39
Apr-08 35832.13 40.59 1.14 2.80
May-08 10289.13 42.32 0.20 0.48
Jun-08 163163.7 42.62 0.21 0.50
Jul-08 318255.85 42.53 0.66 1.54
Aug-08 332272.49 43.29 0.38 0.88
Sep-08 512618.73 45.36 0.82 1.80
Oct-08 25936 46.92 0.35 0.74
Table 3.4: Inter-day variations in the Purchase rate of Dollar over the 12 months
Interpretation: The inter-day variations in the Purchase rate of Dollar are high in the
months of April 2008, July 2008 and September 2008. Whereas the variations in the
exchange rate is low in the other months. The least variations are in the month of January
2008 and the highest are in the month of April 2008.
Chart 3.4: Avegare Purchase Rate of Dollar over the 12 months
Conclusion: The above graph shows a steady increase in the exchange rate over the 12
months. The exchange rate is highest in the month of October 2008.
42
3.1.5 Analysis of Inter-Day Variations in the Purchase Rate of Euro
over the 12 Months
Avg.
Total Euro Standard coefficient of
Date Purchase
Rate
Oct-07 45000.00 56.11 0.27 0.48
Dec-07 40000.00 57.20 0.00 0.00
Jan-08 12479.70 58.34 0.00 0.00
Feb-08 2000.00 58.01 0.00 0.00
Apr-08 20250.00 62.61 0.00 0.00
May-08 3909.19 64.32 2.12 3.29
Jun-08 13333.45 62.03 8.52 13.74
Jul-08 7983.45 65.86 0.00 0.00
Aug-08 200.00 64.22 0.00 0.00
Sep-08 16195.50 63.63 0.53 0.83
Oct-08 4250.00 64.45 0.00 0.00
Table 3.5: Inter-day variations in the Purchase rate of Euro over the 12 months
Interpretation: The inter-day variations in the Purchase rate of Euro are higher in the
months of May 2008 and June 2008. Whereas the variations in exchange rate is low in
the other months. In the months of December 2007, January 2008, February 2008, April
2008, July 2008, August 2008 and October 2008 there have been no variations at all.
Chart 3.5: Avegare Purchase Rate of Euro over the 12 months
Conclusion: The above graph shows that the exchange rate fluctuates during the months
of May 2008 to July 2008. But it increases over the 12 months, with highest exchange
rate in the month of July 2008.
43
3.1.6 Analysis of Inter-Day Variations in the Purchase Rate of Pound
over the 12 Months
Avg.
Total Pound Standard coefficient of
Date Purchase
Rate
Dec-07 54000.00 78.51 0.97 1.23
Mar-08 3350.00 81.31 0.36 0.44
Apr-08 29454.46 79.15 0.40 0.51
May-08 6720.00 81.44 0.40 0.49
Jun-08 6880.00 83.79 0.57 0.68
Jul-08 9930.00 84.28 0.63 0.75
Aug-08 8600.00 80.10 0.32 0.40
Sep-08 35280.00 80.64 3.06 3.79
Table 3.6: Inter-day variations in the Purchase rate of Pound over the 12 months
Interpretation: The inter-day variations in the purchase rate of Pound is higher in the
months of December 2007 and September 2008. Whereas the variations in exchange rate
is low in all the other months. The least variations are in the month of August 2008 and
the highest are in the month of September 2008.
Chart 3.6: Avegare Purchase Rate of Pound over the 12 months
Conclusion: The above graph shows a lot of fluctuation in the exchange rate over the 12
months. the highest exchange rate is in the month of July 2008 and the lowest is in the
month of December 2008.
44
3.2.1 Analysis of Intra-Day Variations in Dollar Exchange (Sale) Rate
for the Month of October 2007
Total Dollar Avg. Selling Standard Coefficient of

Date
Amount Rate Deviation Variation
16-Oct-07 36186.49 39.41 0.31 0.80
17-Oct-07 14397.06 40.00 0.04 0.10
18-Oct-07 16490.42 39.68 0.02 0.06
22-Oct-07 59976.00 40.12 0.00 0.00
23-Oct-07 1788.00 40.30 0.00 0.00
24-Oct-07 34272.00 39.81 0.00 0.00
25-Oct-07 10268.89 39.74 0.00 0.00
26-Oct-07 394661.10 39.78 0.05 0.12
29-Oct-07 146.46 39.55 0.00 0.00
30-Oct-07 294117.83 39.61 0.06 0.15
Table 3.7: Intra-Day Variations in Dollar Exchange (Sale) Rate for the Month of
October 2007
Interpretation: It can be inferred from the standard deviation and coefficient of

Variation in the above table that, on 16th October the variation in exchange rate is high,
whereas on 17th, 18th, 26th and 30th October there is low variation in exchange rate. On rest
of the days there is no intra-exchange rate variation.
45
for the Month of November 2007
Total Dollar Avg. Selling Standard Coefficient of
Date
Amount Rate Deviation Variation
1-Nov-07 22167.20 39.66 0.21 0.52
2-Nov-07 39098.50 39.51 0.17 0.44
5-Nov-07 44423.03 39.12 0.36 0.92
6-Nov-07 48740.00 39.49 0.04 0.10
7-Nov-07 51174.70 39.45 0.00 0.00
8-Nov-07 9660.16 39.55 0.02 0.06
12-Nov-07 664.39 39.69 0.23 0.59
13-Nov-07 11294.84 39.47 0.51 1.29
14-Nov-07 40828.12 39.40 0.18 0.45
19-Nov-07 38924.26 39.49 0.03 0.08
20-Nov-07 33413.40 39.62 0.00 0.00
21-Nov-07 270890.16 39.47 0.29 0.74
22-Nov-07 8568.00 39.66 0.00 0.00
23-Nov-07 2267.50 39.41 0.50 1.27
26-Nov-07 68544.00 39.83 0.00 0.00
27-Nov-07 21530.00 40.05 0.00 0.00
28-Nov-07 24964.00 39.68 0.50 1.25
November 2007

Variation in the above table that, on 1st ,5th , 12th , 13th , 28th ,23rd ,21st October the
variation in exchange rate is high, whereas on 2nd , 6th ,8th , 14th ,19th October there is low
variation in exchange rate. On 7th, 20th, 22nd, 26th, 27th there is no intra-exchange rate
variation
46
for the Month of December 2007
Total Dollar Avg. Selling Standard Coefficient
Date
Amount Rate Deviation of Variation
3-Dec-07 49650.58 39.73 0.14 0.35
6-Dec-07 50424.65 39.63 0.03 0.07
10-Dec-07 32933.67 39.63 0.04 0.09
11-Dec-07 42952.90 39.59 0.00 0.00
12-Dec-07 25639.25 39.49 0.23 0.57
13-Dec-07 13473.90 39.54 0.00 0.00
14-Dec-07 103553.82 39.57 0.04 0.11
17-Dec-07 34272.00 39.60 0.00 0.00
18-Dec-07 17136.00 39.80 0.00 0.00
19-Dec-07 8568.00 39.74 0.00 0.00
20-Dec-07 25394.15 39.74 0.05 0.12
24-Dec-07 13872.70 39.62 0.03 0.06
26-Dec-07 34272.00 39.66 0.00 0.00
27-Dec-07 43390.00 39.52 0.29 0.74
28-Dec-07 19737.50 39.63 0.00 0.00
December 2007

Variation in the above table that, on 12th ,27th December the variation in exchange rate is
high, whereas on 3rd 6th 10th 14th 20th 24th December there is low variation in exchange
rate. On 11th, 13th, 17th, 18th, 19th, 26th, 28th December there is no intra-exchange rate
variation.
47
for the Month of January 2008
Date
1-Jan-08 1500.00 39.22 0.00 0.00
3-Jan-08 1900.00 38.85 0.00 0.00
4-Jan-08 8146.15 39.50 0.00 0.00
7-Jan-08 761056.00 39.44 0.00 0.00
8-Jan-08 34076.00 39.48 0.04 0.09
9-Jan-08 9453.00 39.35 0.61 1.54
10-Jan-08 111999.00 39.65 0.29 0.73
11-Jan-08 10943.81 39.61 0.21 0.52
14-Jan-08 24666.65 39.29 0.25 0.65
15-Jan-08 98595.58 39.46 0.03 0.08
16-Jan-08 40626.01 39.45 0.03 0.07
17-Jan-08 9528.00 39.53 0.04 0.09
21-Jan-08 49662.97 39.57 0.06 0.16
22-Jan-08 13552.50 39.98 0.00 0.00
23-Jan-08 73114.63 39.73 0.03 0.07
28-Jan-08 231452.49 39.61 0.05 0.13
29-Jan-08 99879.17 39.58 0.04 0.09
30-Jan-08 21897.33 39.63 0.03 0.07
31-Jan-08 17948.43 39.63 0.04 0.11
January 2008

Variation in the above table that, on 9th 10th 11th 14th January the variation in exchange
rate is high, whereas on 8th 15th 16th ,17th 21st ,23rd ,28th 29th 30th 31st January there is low
variation in exchange rate. On 1st, 3rd, 4th, 7th, 22nd there is no intra-exchange rate
variation.
48
for the Month of February 2008
Date
4-Feb-08 7006.50 39.50 0.00 0.00
5-Feb-08 17136.00 39.67 0.00 0.00
6-Feb-08 17322.30 39.68 0.14 0.35
8-Feb-08 9134.00 39.71 0.02 0.06
11-Feb-08 35652.60 39.85 0.01 0.04
12-Feb-08 35461.13 39.89 0.02 0.05
14-Feb-08 412853.22 39.84 0.00 0.00
19-Feb-08 60668.35 39.68 0.88 2.23
20-Feb-08 2833.78 40.30 0.00 0.00
26-Feb-08 9184.93 40.10 0.00 0.00
28-Feb-08 38650.74 40.02 0.04 0.09
29-Feb-08 11068.00 40.16 0.08 0.21
February 2008

Variation in the above table that, on 19th February the variation in exchange rate is high,
whereas on 6th ,8th ,11th ,12th ,28th February there is low variation in exchange rate. On
4th, 5th, 8th, 14th, 20th, 26th February there is no intra-exchange rate variation.
49
for the Month of March 2008
Date
3-Mar-08 21512.00 40.37 0.27 0.68
4-Mar-08 17776.00 40.43 0.00 0.00
7-Mar-08 218277.76 40.65 0.00 0.00
10-Mar-08 19199.00 40.53 0.00 0.00
13-Mar-08 252811.75 40.67 0.00 0.00
14-Mar-08 16742.86 40.68 0.06 0.14
17-Mar-08 49962.48 40.85 0.00 0.00
19-Mar-08 138396.08 40.62 0.05 0.13
20-Mar-08 2382.75 40.65 0.00 0.00
24-Mar-08 61500.00 40.53 0.00 0.00
25-Mar-08 5000.00 40.25 0.00 0.00
27-Mar-08 43834.53 40.40 0.10 0.24
28-Mar-08 173050.00 40.24 0.02 0.06
31-Mar-08 115556.09 40.08 0.08 0.19
March 2008

Variation in the above table that, on 3rd March the variation in exchange rate is high,
whereas on 14th ,19th , 27th ,March there is low variation in exchange rate. On 4th, 7th
10th 13th 17th 20th, 24th 25th March there is no intra-exchange rate variation.
50
for the Month of April 2008
Date
2-Apr-08 35144.00 40.23 0.06 0.14
4-Apr-08 2693.80 40.20 0.00 0.00
8-Apr-08 13106.74 40.18 0.03 0.07
9-Apr-08 16727.08 40.24 0.05 0.13
11-Apr-08 3500.00 40.53 0.67 1.66
12-Apr-08 48244.43 40.22 0.18 0.46
15-Apr-08 2827.25 40.13 0.02 0.05
16-Apr-08 10698.60 40.19 0.09 0.22
17-Apr-08 28230.00 40.23 0.28 0.69
19-Apr-08 1500.00 39.75 0.00 0.00
22-Apr-08 35.00 40.10 0.00 0.00
24-Apr-08 6296.61 40.03 0.03 0.07
25-Apr-08 179209.30 40.33 0.24 0.59
29-Apr-08 14845.99 40.38 0.08 0.20
30-Apr-08 20760.85 40.6 0.00 0.00
April 2008

Variation in the above table that, on 11th ,17th ,25th the variation in exchange rate is high,
whereas on 2nd ,8th ,9th ,12th ,15th ,16th , 24th ,29th April there is low variation in exchange
rate. On 4th 19th, 22nd, 30th April there is no intra-exchange rate variation
51
for the Month of May 2008
Date
1-May-08 31786.66 40.63 0.04 0.10
2-May-08 309.00 40.84 0.02 0.05
5-May-08 400286.60 40.64 0.22 0.53
6-May-08 15155.74 40.85 0.07 0.17
8-May-08 6030.00 41.41 0.58 1.40
9-May-08 35536.00 42.07 0.30 0.72
13-May-08 10758.72 41.96 0.84 2.00
14-May-08 15618.08 42.53 0.06 0.14
15-May-08 11919.98 42.67 0.04 0.10
16-May-08 55526.83 42.81 0.00 0.00
17-May-08 259815.84 42.70 0.00 0.00
21-May-08 1256.55 42.90 0.00 0.00
22-May-08 6233.00 43.59 0.37 0.86
23-May-08 35524.22 43.08 0.00 0.00
27-May-08 330193.77 43.13 0.04 0.09
28-May-08 1700.00 42.74 0.48 1.13
29-May-08 28275.45 42.94 0.00 0.00
30-May-08 5600.00 42.7 0.00 0.00
May 2008

Variation in the above table that 5th ,8th ,9th, 13th , 22nd and 28th May on the variation in
exchange rate is high, whereas on 1st, 2nd, 6th ,14th ,15th , 27th May there is low variation
in exchange rate. On 16th , 17th, 21st , 23rd 29th , 30th there is no intra-exchange rate
variation.
52
for the Month of June 2008
Date
2-Jun-08 306854.30 42.46 0.02 0.05
3-Jun-08 228144.50 42.73 0.00 0.00
4-Jun-08 310054.87 42.72 0.00 0.00
5-Jun-08 375.05 42.95 0.00 0.00
6-Jun-08 156996.97 42.62 0.34 0.27
9-Jun-08 1630.00 43.05 0.00 0.00
10-Jun-08 2842.17 43.09 0.02 0.05
11-Jun-08 935281.30 43.20 0.11 0.24
12-Jun-08 2780.36 43.25 0.28 0.65
13-Jun-08 6291.44 42.98 0.03 0.08
16-Jun-08 133096.02 46.62 0.00 0.00
17-Jun-08 27582.41 43.09 0.03 0.07
18-Jun-08 9251.60 43.06 0.00 0.00
20-Jun-08 354810.00 42.96 0.40 0.92
23-Jun-08 30609.25 43.17 0.03 0.07
25-Jun-08 1200.00 42.61 0.00 0.00
26-Jun-08 42653.05 42.95 0.06 0.15
27-Jun-08 122034.12 43.03 0.00 0.00
29-Jun-08 138447.59 43.12 0.03 0.08
June 2008

Variation in the above table that 12th and 20th June on the variation in exchange rate is
high, whereas on 2nd ,6th ,10th ,11th ,13th ,17th ,23rd ,26th ,29th June there is low variation in
exchange rate. On 3rd, 4th, 5th .9th, 16th, 18th, 25th, 27th June there is no intra-exchange
rate variation.
53
for the Month of July 2008
Date
1-Jul-08 40339.61 43.55 0.09 0.21
3-Jul-08 18000.00 43.57 0.00 0.00
7-Jul-08 6000.00 43.05 0.25 0.57
8-Jul-08 11140.80 43.80 0.35 0.81
9-Jul-08 2095.29 43.30 0.01 0.02
10-Jul-08 5540.16 43.32 0.00 0.00
12-Jul-08 13334.00 42.93 0.00 0.00
14-Jul-08 5360.75 43.00 0.00 0.00
16-Jul-08 3500.00 43.40 0.57 1.30
18-Jul-08 1998.30 43.00 0.00 0.00
21-Jul-08 50234.00 42.67 0.93 2.19
23-Jul-08 142246.77 42.59 0.03 0.08
24-Jul-08 7313.00 42.17 0.21 0.50
25-Jul-08 8568.00 42.55 0.00 0.00
27-Jul-08 6600.00 41.00 0.00 0.00
28-Jul-08 5482.86 42.45 0.00 0.00
29-Jul-08 2183.03 42.91 0.04 0.08
31-Jul-08 8631.16 42.62 0.00 0.00
July 2008

Variation in the above table that 7th ,8th ,16th ,21st ,24th July on the variation in
exchange rate is high, whereas on 1st,9th ,23rd ,29th July there is low variation in exchange
rate. On 3rd, 10th, 12th, 14th, 18th, 25th, 27th, 28th, 31st July there is no intra-exchange rate
variation.
54
for the Month of August 2008
Total Dollar Avg. Standard Coefficient
Date
Amount Selling Rate Deviation of Variation
1-Aug-08 306991.64 42.61 0.00 0.00
4-Aug-08 5782.73 42.83 0.32 0.74
5-Aug-08 7465.00 42.46 0.00 0.00
6-Aug-08 42824.26 42.19 0.05 0.11
7-Aug-08 15592.38 42.22 0.00 0.00
8-Aug-08 10800.00 42.39 0.00 0.00
11-Aug-08 18831.76 42.13 0.08 0.18
12-Aug-08 57604.32 42.56 0.20 0.47
13-Aug-08 19551.20 42.80 0.22 0.51
18-Aug-08 1000.00 43.95 0.00 0.00
21-Aug-08 9520.00 43.95 0.00 0.00
22-Aug-08 155618.01 43.54 0.06 0.13
25-Aug-08 46927.28 43.82 0.02 0.05
26-Aug-08 18544.00 44.20 0.09 0.21
27-Aug-08 262440.72 43.92 0.01 0.03
29-Aug-08 27379.00 43.97 0.03 0.08
August 2008

Variation in the above table that 4th ,13th August on the variation in exchange rate is
high, whereas on 6th ,11th ,12th ,22nd ,25th ,26th ,27th and 29th August there is low variation
in exchange rate. On 1st, 5th, 7th, 8th, 18th, 21st August there is no intra-exchange rate
variation.
55
for the Month of September 2008
Date
1-Sep-08 203354.08 44.28 0.17 0.38
2-Sep-08 170356.00 44.53 0.12 0.28
3-Sep-08 230245.00 44.67 0.00 0.00
5-Sep-08 40789.21 44.55 0.15 0.34
8-Sep-08 22543.31 44.50 0.17 0.38
9-Sep-08 545880.00 45.04 0.09 0.20
10-Sep-08 23789.68 45.04 0.06 0.14
12-Sep-08 12570.00 45.77 0.09 0.20
15-Sep-08 40995.00 46.05 0.15 0.33
16-Sep-08 168417.47 46.82 0.11 0.24
18-Sep-08 9100.00 46.53 0.00 0.00
19-Sep-08 4450.00 46.44 0.00 0.00
23-Sep-08 47333.75 45.85 0.14 0.30
September 2008

Variation in the above table that, for this month there is low variation in exchange rate
throughout the month. On 3rd 19th September there is no variation in exchange rate.
56
Avg.
Total Dollar Standard Coefficient
Date Selling
Amount Deviation of Variation
Rate
1-Oct-08 122477.13 47.26 0.10 0.21
3-Oct-08 28265.40 47.12 0.07 0.15
6-Oct-08 28560.00 47.95 0.00 0.00
7-Oct-08 9520.00 48.35 0.00 0.00
8-Oct-08 7944.40 48.61 0.00 0.00
13-Oct-08 156185.28 48.47 0.11 0.22
14-Oct-08 380.00 47.76 0.00 0.00
15-Oct-08 14846.50 48.49 0.11 0.23
16-Oct-08 19803.00 48.88 0.27 0.56
October 2008
Interpretation:
It can be inferred from the standard deviation and coefficient of Variation in the above
table that, for this month there is low variation in exchange rate throughout the month.
On 6th, 7th October there is no variation in exchange rate.
57
3.2.14 Analysis of Intra-Day Variations in Euro Exchange (Sale) Rate
Total Euro Avg. Selling Standard Coefficient
Date
16-Oct-07 62184.44 56.20 0.00 0.00
17-Oct-07 131250.16 56.65 0.29 0.51
18-Oct-07 11420.82 56.72 0.14 0.25
22-Oct-07 102576.58 57.43 0.00 0.00
23-Oct-07 150302.03 56.72 0.00 0.00
25-Oct-07 10860.44 56.80 0.00 0.00
29-Oct-07 34865.68 57.19 0.00 0.00
30-Oct-07 9514.82 57.19 0.00 0.00
31-Oct-07 1287.33 57.2 0.00 0.00
Table 3.20: Intra-Day Variations in Euro Exchange (Sale) Rate for the Month of
October 2007
Interpretation:
table that, for this month there is no variation in exchange rate throughout the month. On
17th and 18th there is low variation in exchange rate.
58
Date
1-Nov-07 3787.43 57.38 0.00 0.00
2-Nov-07 13775.00 57.34 0.00 0.00
5-Nov-07 14809.30 57.40 0.00 0.00
7-Nov-07 20356.00 57.82 0.00 0.00
8-Nov-07 23691.22 58.02 0.00 0.00
12-Nov-07 367.15 58.00 0.00 0.00
13-Nov-07 98219.58 57.79 0.00 0.00
14-Nov-07 29307.59 58.20 0.15 0.26
19-Nov-07 49046.71 57.96 0.00 0.00
20-Nov-07 202306.10 58.09 0.00 0.00
21-Nov-07 161468.96 58.85 0.00 0.00
27-Nov-07 110548.09 59.77 0.00 0.00
28-Nov-07 78562.30 59.3 0.00 0.00
December 2007
Interpretation:
14th November there is low variation in exchange rate.
59
Date
3-Sep-07 35232.07 58.47 0.00 0.00
6-Sep-07 8922.76 58.05 0.00 0.00
10-Dec-07 77404.30 58.15 0.00 0.00
12-Dec-07 48262.23 58.20 0.00 0.00
13-Dec-07 171772.85 58.40 0.00 0.00
14-Dec-07 132824.68 58.08 0.00 0.00
17-Dec-07 206630.02 57.28 0.06 0.11
18-Dec-07 803985.04 57.44 0.09 0.16
19-Dec-07 16994.84 57.30 0.00 0.00
20-Dec-07 8615.00 57.30 0.00 0.00
24-Dec-07 6494.87 57.20 0.00 0.00
27-Dec-07 23353.76 57.52 0.00 0.00
28-Dec-07 20205.42 58.11 0.00 0.00
31-Dec-07 27473.35 58.55 0.00 0.00
December 2007
Interpretation
17th and 18th December there is low variation in exchange rate.
60
Date
4-Jan-08 5148.00 58.47 0.02 0.04
9-Jan-08 66302.27 58.27 0.00 0.00
11-Jan-08 158334.04 58.54 0.00 0.00
14-Jan-08 106677.20 58.60 0.00 0.00
15-Jan-08 76778.37 58.84 0.00 0.00
16-Jan-08 24978.40 58.71 0.00 0.00
17-Jan-08 42254.82 57.98 0.00 0.00
21-Jan-08 49055.60 57.61 0.00 0.00
22-Jan-08 2865.86 57.94 0.19 0.33
23-Jan-08 39631.88 58.20 0.00 0.00
28-Jan-08 138544.77 58.21 0.00 0.00
29-Jan-08 1627.60 58.65 0.00 0.00
30-Jan-08 459092.10 58.65 0.00 0.00
31-Jan-08 6018.37 59 0.00 0.00
January 2008
Interpretation
4th and 22nd there is low variation in exchange rate.
61
Date
5-Feb-08 30915.14 58.88 0.00 0.00
7-Feb-08 326336.79 58.11 0.00 0.00
11-Feb-08 43764.78 58.00 0.00 0.00
12-Feb-08 28798.23 58.00 0.00 0.00
13-Feb-08 92239.28 58.20 0.00 0.00
14-Feb-08 139223.90 58.21 0.00 0.00
15-Feb-08 27869.42 58.38 0.00 0.00
18-Feb-08 63283.19 58.58 0.00 0.00
19-Feb-08 74634.81 58.87 0.00 0.00
20-Feb-08 29115.78 59.50 0.00 0.00
26-Feb-08 134589.46 59.68 0.00 0.00
27-Feb-08 4815.00 60.30 0.00 0.00
29-Feb-08 189725.35 61.06 0.00 0.00
February 2008
Interpretation
table that, for this month there is no variation in exchange rate throughout the month.
62
Date
3-Mar-08 175311.68 61.74 0.00 0.00
4-Mar-08 59972.81 61.69 0.00 0.00
7-Mar-08 42121.60 62.90 0.15 0.23
10-Mar-08 10390.20 62.69 0.51 0.81
13-Mar-08 8534.80 63.54 0.00 0.00
14-Mar-08 152246.51 63.60 0.00 0.00
17-Mar-08 8426.58 64.92 0.00 0.00
18-Mar-08 65966.70 64.65 0.00 0.00
19-Mar-08 58881.50 63.90 0.00 0.00
20-Mar-08 6005.26 63.70 0.00 0.00
25-Mar-08 384786.56 62.92 0.00 0.00
26-Mar-08 163334.18 63.35 0.31 0.48
27-Mar-08 186727.52 63.88 0.00 0.00
28-Mar-08 63817.12 63.75 0.00 0.00
31-Mar-08 75906.36 63.50 0.07 0.12
March 2008
Interpretation
table that, for this month there is almost no variation in exchange rate throughout the
month. On 7th ,26th and 31st there is low variation in exchange rate. On 13th March there
is high variation.
63
Date
2-Apr-08 19418.40 62.84 0.00 0.00
3-Apr-08 1000.00 63.25 0.00 0.00
8-Apr-08 108553.40 63.52 0.00 0.00
9-Apr-08 66675.10 63.34 0.00 0.00
11-Apr-08 2429.02 63.42 0.00 0.00
15-Apr-08 86485.81 63.70 0.00 0.00
16-Apr-08 67522.61 63.83 0.09 0.00
17-Apr-08 41361.00 64.13 0.00 0.00
22-Apr-08 212561.31 64.05 0.00 0.00
24-Apr-08 238034.26 63.76 0.33 0.53
25-Apr-08 63986.00 63.60 0.00 0.00
28-Apr-08 99496.70 63.26 0.00 0.00
29-Apr-08 2605.21 63.38 0.00 0.00
30-Apr-08 40126.00 63.39 0.00 0.00
April 2008
Interpretation
table that,for this month there is almost no variation in exchange rate throughout the
month. On 24th April there is low variation in exchange rate.
64
Date
1-May-08 167092.26 63.74 0.00 0.00
5-May-08 31035.31 63.17 0.00 0.00
6-May-08 62115.84 63.68 0.00 0.00
8-May-08 77917.99 64.28 0.00 0.00
9-May-08 37176.00 64.61 0.00 0.00
12-May-08 48358.90 65.92 0.00 0.00
14-May-08 22728.97 65.87 0.00 0.00
15-May-08 79279.22 66.06 0.00 0.00
16-May-08 825.69 66.42 0.00 0.00
17-May-08 129713.52 66.65 0.00 0.00
21-May-08 11852.57 67.43 0.00 0.00
22-May-08 61766.81 68.60 0.00 0.00
23-May-08 66546.07 67.98 0.00 0.00
26-May-08 79793.22 67.74 0.00 0.00
27-May-08 32618.53 68.14 0.00 0.00
29-May-08 164784.41 67.31 0.00 0.00
30-May-08 34787.48 66.56 0.00 0.00
May 2008
Interpretation
65
Date
2-Jun-08 30827.52 66.30 0.14 0.21
3-Jun-08 167501.75 66.58 0.00 0.00
4-Jun-08 80351.11 66.23 0.00 0.00
5-Jun-08 29913.69 66.55 0.05 0.08
9-Jun-08 57004.25 68.17 0.00 0.00
10-Jun-08 45017.40 67.36 0.00 0.00
11-Jun-08 20251.73 66.95 0.00 0.00
17-Jun-08 129263.05 64.40 0.00 0.00
18-Jun-08 176611.71 66.78 0.40 0.60
20-Jun-08 59914.15 67.11 0.07 0.10
23-Jun-08 171070.79 67.58 0.00 0.00
27-Jun-08 126927.34 67.90 0.00 0.00
29-Jun-08 110428.91 68.2 0.00 0.00
June 2008
Interpretation
month. On 2nd 5th, 20th June there is low variation in exchange rate. On 18th June there is
high variation in exchange rate.
66
3.2.23 Analysis of Intra-Day Variations in Euro Exchange(Sale) Rate
Date
Amount Rate Deviation Of Variation
1-Jul-08 121518.19 68.60 0.44 0.63
3-Jul-08 18881.06 69.28 0.00 0.00
7-Jul-08 174564.69 67.84 0.00 0.00
8-Jul-08 69229.00 68.59 0.00 0.00
9-Jul-08 97419.92 68.18 0.00 0.00
11-Jul-08 2368.03 68.65 0.00 0.00
15-Jul-08 27822.33 69.20 0.00 0.00
18-Jul-08 26286.00 68.28 0.00 0.00
21-Jul-08 92127.20 68.38 0.00 0.00
22-Jul-08 2544102.96 68.64 0.00 0.00
23-Jul-08 442.50 67.30 0.00 0.00
24-Jul-08 18047.47 66.24 0.00 0.00
28-Jul-08 213685.76 66.95 0.00 0.00
29-Jul-08 6457.11 67.85 0.00 0.00
July 2008
Interpretation
month. On 1st July there is high variation in exchange rate.
67
3.2.24 Analysis of Intra-Day Variations in Euro Exchange(Sale) Rate
Avg.
Total Euro Standard Coefficient
Date Selling
Rate
1-Aug-08 191064.32 66.65 0.16 0.24
4-Aug-08 13960.15 66.60 0.00 0.00
5-Aug-08 15313.00 66.14 0.00 0.00
6-Aug-08 2430.00 65.77 0.00 0.00
8-Aug-08 410062.44 64.62 0.00 0.00
11-Aug-08 158399.09 63.38 0.00 0.00
12-Aug-08 1128220.17 63.39 0.00 0.00
14-Aug-08 23524.37 64.30 0.00 0.00
21-Aug-08 111191.62 65.00 0.00 0.00
22-Aug-08 34137.21 65.15 0.00 0.00
25-Aug-08 131315.16 64.73 0.03 0.05
26-Aug-08 170501.82 65.30 0.00 0.00
27-Aug-08 11849.00 65.14 0.00 0.00
28-Aug-08 218689.86 65.17 0.00 0.00
29-Aug-08 340734.99 65.08 0.34 0.52
August 2008
Interpretation
month. On 1st 25th, 29th August there is low variation in exchange rate.
68
Avg.
Date Selling
Rate
1-Sep-08 11812.80 64.68 0.00 0.00
8-Sep-08 816312.73 63.80 0.00 0.00
10-Sep-08 106410.19 63.83 0.02 0.03
11-Sep-08 35374.56 63.56 0.00 0.00
15-Sep-08 207159.25 66.11 0.00 0.00
16-Sep-08 9739.25 66.73 0.00 0.00
18-Sep-08 6469.25 67.03 0.00 0.00
22-Sep-08 1514.00 65.94 0.00 0.00
23-Sep-08 93839.29 67.57 0.00 0.00
September 2008
Interpretation
month. On 10th September there is low variation in exchange rate.
69
Avg.
Date Selling
Rate
1-Oct-08 5336.35 66.67 0.00 0.00
3-Oct-08 49692.04 65.35 0.00 0.00
6-Oct-08 130078.07 65.45 0.00 0.00
7-Oct-08 6429.10 65.52 0.00 0.00
8-Oct-08 1450.18 66.39 0.00 0.00
13-Oct-08 321732.65 65.29 0.00 0.00
14-Oct-08 7386078.00 66.07 0.00 0.00
15-Oct-08 5150.53 66.00 0.00 0.00
16-Oct-08 75240.10 65.76 0.00 0.00
October 2008
Interpretation
70
3.2.27 Analysis of Intra-Day Variations in Pound Exchange (Sale) Rate
Avg.
Total Pound Standard Coefficient
Date Selling
Rate
16-Oct-07 110944.17 80.70 0.00 0.00
18-Oct-07 727.46 81.00 0.00 0.00
23-Oct-07 1000.00 81.18 0.00 0.00
25-Oct-07 118102.50 81.46 0.01 0.02
29-Oct-07 21705.75 81.35 0.00 0.00
30-Oct-07 20466.20 81.68 0.00 0.00
31-Oct-07 41034.00 81.80 0.00 0.00
Table 3.33: Intra-Day Variations in Pound Exchange (Sale) Rate for the Month of
October 2007
Interpretation
month. On 25th October there is low variation in exchange rate.
71
3.2.28 Analysis of Intra-Day Variations in Pound Exchange(Sale) Rate
Avg.
Date Selling
Rate
2-Nov-07 1096.75 82.45 0.00 0.00
5-Nov-07 20193.46 82.60 0.00 0.00
7-Nov-07 3984.57 82.55 0.00 0.00
8-Nov-07 27162.98 83.10 0.00 0.00
12-Nov-07 33736.60 82.30 0.00 0.00
13-Nov-07 41858.90 81.63 0.00 0.00
14-Nov-07 481191.05 81.53 0.32 0.39
16-Nov-07 381042.81 80.78 0.00 0.00
19-Nov-07 308804.04 81.03 0.00 0.00
20-Nov-07 42163.82 81.00 0.00 0.00
21-Nov-07 1273.87 81.75 0.00 0.00
23-Nov-07 42540.35 82.33 0.02 0.02
27-Nov-07 42549.14 83.69 0.49 0.59
30-Nov-07 1000.00 82.27 0.00 0.00
November 2007
Interpretation
month. On 14th, 23rd and 27th September there is low variation in exchange rate.
72
Avg.
Date Selling
Rate
3-Dec-07 137705.49 81.80 0.05 0.06
6-Dec-07 79220.08 80.39 0.00 0.00
10-Dec-07 74991.00 80.50 0.00 0.00
11-Dec-07 4069.05 80.75 0.35 0.44
12-Dec-07 2442.57 80.70 0.00 0.00
14-Dec-07 1430.05 80.74 0.00 0.00
17-Dec-07 34529.71 79.95 0.00 0.00
18-Dec-07 10927.50 80.33 0.00 0.00
19-Dec-07 1279.35 79.90 0.00 0.00
20-Dec-07 53839.41 79.46 0.10 0.13
24-Dec-07 278638.44 78.62 0.00 0.00
26-Dec-07 436716.74 78.32 0.00 0.00
27-Dec-07 58359.62 78.87 0.23 0.30
28-Dec-07 5375.59 79.12 0.00 0.00
31-Dec-07 125984.16 79.10 0.03 0.04
December 2007
Interpretation
month. On 3rd, 11th, 20th, 27th and 31st December there is low variation in exchange rate.
73
Avg.
Date Selling
Rate
1-Jan-08 431820.19 78.56 0.00 0.00
3-Jan-08 30152.00 78.55 0.02 0.02
4-Jan-08 9358.00 77.88 0.04 0.05
7-Jan-08 138.60 77.80 0.00 0.00
8-Jan-08 27442.90 77.81 0.00 0.00
10-Jan-08 117545.98 77.28 0.00 0.00
14-Jan-08 42658.79 77.42 0.07 0.09
17-Jan-08 15466.78 77.44 0.02 0.03
22-Jan-08 4253.69 77.63 0.03 0.04
23-Jan-08 2979.36 77.81 0.08 0.11
24-Jan-08 26530.00 77.55 0.04 0.05
28-Jan-08 120629.94 78.19 0.00 0.00
29-Jan-08 148523.01 78.53 0.03 0.04
30-Jan-08 49030.43 78.80 0.00 0.00
31-Jan-08 2215.00 78.79 0.00 0.00
January 2008
Interpretation
month. On 3rd ,4th ,14th ,17th ,22nd ,23rd ,24th and 29th January there is low variation in
exchange rate.
74
Avg.
Date Selling
Rate
4-Feb-08 110.00 77.81 0.00 0.00
5-Feb-08 26653.56 78.11 0.00 0.00
7-Feb-08 17558.08 77.72 0.00 0.00
11-Feb-08 52731.78 77.60 0.00 0.00
13-Feb-08 29057.28 78.05 0.00 0.00
19-Feb-08 6170.00 78.11 0.00 0.00
20-Feb-08 135476.27 78.61 0.07 0.09
26-Feb-08 6321.06 78.95 0.00 0.00
27-Feb-08 237579.19 79.26 0.00 0.00
29-Feb-08 155001.08 79.79 0.00 0.00
February 2008
Interpretation
month. On 20th February there is low variation in exchange rate.
75
Avg.
Total Pound Standard coefficient
Date Selling
Amount Deviation of variation
Rate
3-Mar-08 165524.96 80.35 0.00 0.00
4-Mar-08 165047.36 80.26 0.00 0.00
5-Mar-08 295458.88 80.94 0.42 0.52
7-Mar-08 149117.36 81.78 0.00 0.00
10-Mar-08 343002.93 81.69 0.40 0.48
13-Mar-08 130567.36 82.49 0.00 0.00
14-Mar-08 178874.47 82.61 0.00 0.00
17-Mar-08 99661.50 82.28 0.00 0.00
19-Mar-08 502.20 81.70 0.00 0.00
20-Mar-09 6297.53 80.60 0.00 0.00
24-Mar-08 332150.01 80.21 0.00 0.00
25-Mar-08 4568.96 80.29 0.02 0.03
26-Mar-08 1000.00 80.87 0.00 0.00
27-Mar-08 13494.90 80.89 0.02 0.02
28-Mar-08 1700.00 80.80 0.00 0.00
31-Mar-08 661538.74 79.85 0.10 0.12
March 2008
Interpretation
month. On 5th, 10th ,25th ,27th and 31st February there is low variation in exchange rate.
76
Avg.
Date Selling
Rate
3-Apr-08 600.00 79.76 0.00 0.00
4-Apr-08 260.00 80.22 0.00 0.00
8-Apr-08 150.00 80.10 0.00 0.00
9-Apr-08 4650.80 79.10 0.00 0.00
10-Apr-08 18969.00 79.39 0.02 0.03
11-Apr-08 9396.64 78.92 0.58 0.73
15-Apr-08 6456.94 79.25 0.00 0.00
16-Apr-08 163496.66 78.90 0.03 0.04
22-Apr-08 13540.00 79.51 0.00 0.00
24-Apr-08 67693.80 79.86 0.18 0.22
28-Apr-08 21847.70 80.09 0.15 0.19
30-Apr-08 15057.98 79.92 0.00 0.00
April 2008

Variation in the above table that 11th April on the variation in exchange rate is high,
whereas on 10th, 16th, 24th and 28th April there is low variation in exchange rate. On 3 rd
4th, 8th ,9th ,15th ,22nd and 30th there is no intra-exchange rate variation.
77
Avg.
Date Selling
Rate
1-May-08 229872.30 80.79 0.00 0.00
2-May-08 354659.75 80.66 0.00 0.00
5-May-08 146471.37 80.43 0.00 0.00
6-May-08 121976.38 80.70 0.00 0.00
8-May-08 434.09 81.70 0.00 0.00
9-May-08 98516.70 81.83 0.00 0.00
12-May-08 10367.07 81.40 0.00 0.00
13-May-08 100.00 83.65 0.00 0.00
14-May-08 34626.80 82.81 0.26 0.32
15-May-08 105777.94 82.94 0.00 0.00
16-May-08 17044.40 83.35 0.00 0.00
17-May-08 2514.78 83.62 0.02 0.02
21-May-08 241239.63 84.44 0.01 0.01
22-May-08 294415.43 84.44 0.00 0.00
23-May-08 153785.75 85.17 0.00 0.00
26-May-08 6969.91 85.04 0.19 0.22
27-May-08 1241.00 85.31 0.00 0.00
28-May-08 13425.25 85.17 0.00 0.00
29-May-08 8965.89 85.10 0.30 0.35
May 2008

Variation in the above table that for this month there is almost no variation in exchange
rate throughout the month. On 14th, 17th, 21st, 26th and 29th there is low variation in
exchange rate.
78
Avg.
Date Selling
Rate
2-Jun-08 30726.10 83.82 0.09 0.10
3-Jun-08 85982.40 83.89 0.02 0.03
4-Jun-08 100.00 83.92 0.00 0.00
5-Jun-08 1201.67 84.00 0.00 0.00
9-Jun-08 2021.39 84.80 0.00 0.00
10-Jun-08 196856.14 84.83 0.00 0.00
13-Jun-08 1056.38 83.84 0.00 0.00
17-Jun-08 12996.54 84.85 0.00 0.00
20-Jun-08 3137.17 85.10 0.00 0.00
23-Jun-08 235418.90 85.16 0.05 0.06
26-Jun-08 339863.25 84.65 0.00 0.00
27-Jun-08 34735.95 85.75 0.29 0.34
29-Jun-08 53730.05 85.90 0.00 0.00
June 2008

Variation in the above table that for this month there is almost no variation in exchange
rate throughout the month. On 2nd,3rd 23rd and 27th there is low variation in exchange rate.
79
Avg.
Date Selling
Rate
1-Jul-08 4936.84 86.81 0.72 0.83
4-Jul-08 11575.00 86.71 0.41 0.47
8-Jul-08 14832.27 86.01 0.01 0.01
9-Jul-08 3788.58 85.35 0.00 0.00
10-Jul-08 1685.00 86.95 0.00 0.00
11-Jul-08 11328.11 85.50 0.00 0.00
14-Jul-08 55643.37 85.50 0.00 0.00
15-Jul-08 83862.99 86.49 0.02 0.02
16-Jul-08 295079.41 86.72 0.00 0.00
18-Jul-08 149405.40 85.87 0.04 0.05
21-Jul-08 650.00 84.75 0.00 0.00
23-Jul-08 149787.33 84.79 0.12 0.14
24-Jul-08 508387.28 83.78 0.54 0.65
25-Jul-08 22429.92 84.35 0.00 0.00
28-Jul-08 673719.75 84.48 0.00 0.00
29-Jul-08 300959.74 85.48 0.00 0.00
30-Jul-08 214123.72 84.51 0.00 0.00
July 2008

Variation in the above table that 1st July and 24th July the variation in exchange rate is
high, whereas on 4th ,8th ,15th ,18th ,23rd July there is low variation in exchange rate. On
rest of the days there is no intra-exchange rate variation.
80
Avg.
Date Selling
Rate
1-Aug-08 1310.00 84.55 0.00 0.00
3-Aug-08 50.00 82.00 0.00 0.00
5-Aug-08 26075.89 83.20 0.00 0.00
6-Aug-08 400.00 82.48 0.00 0.00
8-Aug-08 18169.25 81.76 0.03 0.03
11-Aug-08 33302.62 80.96 0.02 0.03
12-Aug-08 22803.55 81.05 0.00 0.00
14-Aug-08 15355.33 80.30 0.00 0.00
18-Aug-08 4134.30 81.30 0.00 0.00
19-Aug-08 61951.32 81.60 0.00 0.00
21-Aug-08 201685.78 81.76 0.13 0.16
22-Aug-08 125564.60 82.02 0.33 0.41
25-Aug-08 2696.39 81.07 0.81 1.00
26-Aug-08 116379.62 81.70 0.03 0.04
27-Aug-08 123572.04 81.73 0.46 0.57
29-Aug-08 162809.31 80.54 0.24 0.29
August 2008

Variation in the above table that 25th August the variation in exchange rate is high,
whereas on 8th, 11th, 21st, 22nd ,26th ,27th and 29th August there is low variation in
exchange rate. On rest of the days there is no intra-exchange rate variation.
81
Avg.
Date Selling
Rate
1-Sep-08 7513.11 79.88 0.15 0.19
2-Sep-08 400.00 79.71 0.00 0.00
3-Sep-08 5466.11 78.92 0.00 0.00
5-Sep-08 930.33 78.20 0.00 0.00
8-Sep-08 6250.00 79.28 0.00 0.00
9-Sep-08 31115.50 78.88 0.08 0.10
10-Sep-08 2546.33 79.71 0.20 0.25
11-Sep-08 16749.42 79.73 0.16 0.20
12-Sep-08 15000.00 80.75 0.00 0.00
15-Sep-08 33788.27 83.13 0.26 0.31
16-Sep-08 104984.29 84.07 0.11 0.14
23-Sep-08 13394.85 85.57 0.86 1.00
September 2008

Variation in the above table that on 23rd September the variation in exchange rate is high,
whereas on 1st ,9th ,10th 11th ,16th September there is low variation in exchange rate. On
rest of the days there is no intra-exchange rate variation.
82
Avg.
Date Selling
Rate
1-Oct-08 163939.01 84.29 0.00 0.00
6-Oct-08 37238.39 83.89 0.23 0.27
8-Oct-08 34495.44 82.83 0.00 0.00
13-Oct-08 1053.12 82.26 0.10 0.12
14-Oct-08 2000.00 83.90 0.00 0.00
15-Oct-08 439432.63 84.75 0.00 0.00
16-Oct-08 288834.88 84.58 0.23 0.27
October 2008

Variation in the above table that on 6th, 13th and 16th there is low variation in exchange
rate. On rest of the days there is no intra-exchange rate variation.
83
3.2.40 Analysis of Intra-Day Variations in Dollar Exchange (Purchase)
Rate for the Month of October 2007
Avg.
Total Dollar Standard coefficient
Date Purchase
Rate
22-Oct-07 8043.00 39.67 0.00 0.00

25-Oct-07 16093.78 39.18 0.21 0.55
Table 3.46: Intra-Day Variations in Dollar Exchange (Purchase) Rate for the Month
of October 2007

Variation in the above table that whereas on 22nd October there is low variation in
exchange rate. On 25th October there is no intra-exchange rate variation.
84
3.241 Analysis of Intra-Day Variations in Dollar Exchange (Purchase)
Rate for the Month of November 2007
Avg.
Date Purchase
Rate
5-Nov-07 650.00 38.81 0.00 0.00

6-Nov-07 1200.00 39.17 0.00 0.00
12-Nov-07 2489.00 39.20 0.00 0.00
13-Nov-07 12000.00 39.20 0.00 0.00
15-Nov-07 7500.00 39.15 0.00 0.00
16-Nov-07 2000.00 39.08 0.00 0.00
22-Nov-07 17250.00 38.84 0.47 1.21
of November 2007

Variation in the above table that whereas on 22nd November there is high variation in
exchange rate. On rest of the there is no intra-exchange rate variation.
85
Rate for the Month of December 2007
Avg.
Date Purchase
Rate
3-Dec-07 751.00 38.74 0.19 0.50

6-Dec-07 759.50 39.61 0.00 0.00
19-Dec-07 6560.00 39.33 0.00 0.00
20-Dec-07 9389.00 39.36 0.00 0.00
24-Dec-07 9055.00 39.31 0.00 0.00
27-Dec-07 2975.00 39.28 0.00 0.00
of December 2007

Variation in the above table that whereas on 3rd December there is low variation in
exchange rate. On rest of the day there is no intra-exchange rate variation.
86
Rate for the Month of January 2008
Avg.
Date Purchase
Rate
9-Jan-08 1000.00 39.19 0.00 0

14-Jan-08 7000.00 39.16 0.00 0
23-Jan-08 13763.40 39.40 0.00 0
of January 2008

Variation in the above table that there is no intra-exchange rate variation.
87
Rate for the Month of February 2008
Avg.
Date Purchase
Rate
2-Feb-08 550.00 39.30 0.00 0.00
4-Feb-08 5881.67 39.27 0.05 0.13
6-Feb-08 5145.00 39.66 0.29 0.72
9-Feb-08 2000.00 40.38 0.00 0.00
12-Feb-08 1260.80 39.64 0.09 0.22
19-Feb-08 280.00 39.66 0.00 0.00
20-Feb-08 9978.00 40.03 0.00 0.00
25-Feb-08 3983.00 39.84 0.16 0.41
of February 2008

Variation in the above table that on 6th February the variation in exchange rate is high,
whereas on 4th,12th ,25th there is low variation in exchange rate. On rest of the days there
is no intra-exchange rate variation.
88
Rate for the Month of March 2008
Avg.
Date Purchase
Rate
10-Mar-08 10478.00 40.55 0.04 0.10
11-Mar-08 1235.50 40.34 0.00 0.00
14-Mar-08 1000.00 40.30 0.00 0.00
17-Mar-08 3500.00 40.46 0.00 0.00
18-Mar-08 9978.00 40.46 0.00 0.00
19-Mar-08 10360.00 40.30 0.05 0.12
24-Mar-08 5200.00 40.01 0.00 0.00
of March 2008

Variation in the above table that whereas on 10th ,12th March there is low variation in
89
Rate for the Month of April 2008
Avg.
Date Purchase
Rate
3-Apr-08 152.00 39.80 0.00 0.00
9-Apr-08 187.00 39.91 0.00 0.00
15-Apr-08 1141.72 39.85 0.00 0.00
16-Apr-08 28602.67 39.83 0.02 0.04
25-Apr-08 300.00 42.42 0.00 0.00
29-Apr-08 19.46 42.42 0.00 0.00
30-Apr-08 5429.28 40.98 1.25 3.04
of April 2008

Variation in the above table that whereas 30th April there is high variation in exchange
rate On 16th April there is low variation in exchange rate while on rest of the day there is
no intra-exchange rate variation.
90
Rate for the Month of May 2008
Avg.
Date Purchase
Rate
15-May-08 6409.13 42.24 0.00 0.00
23-May-08 3880.00 42.42 0.32 0.75
of May 2008

Variation in the above table that whereas on 23rd May there is low variation in exchange
rate. On 15th May there is no intra-exchange rate variation.

Rate for the Month of June 2008
Avg.
Date Purchase
Rate
4-Jun-08 1946.00 42.40 0.00 0.00
5-Jun-08 1500.00 42.40 0.00 0.00
6-Jun-08 62715.94 42.45 0.27 0.63
10-Jun-08 5.70 42.98 0.00 0.00
16-Jun-08 14.06 42.76 0.00 0.00
18-Jun-08 8990.00 42.72 0.00 0.00
25-Jun-08 87992.00 42.67 0.00 0.00
of June 2008

Variation in the above table that whereas on 6th December there is low variation in
91
Rate for the Month of July 2008
Avg.
Date Purchase
Rate
4-Jul-08 200.00 41.69 0.00 0.00
10-Jul-08 250.00 41.39 0.00 0.00
11-Jul-08 46250.00 42.67 0.00 0.00
15-Jul-08 219763.21 42.60 0.73 1.71
16-Jul-08 28724.64 42.98 0.00 0.00
17-Jul-08 4995.00 42.07 0.00 0.00
22-Jul-08 500.00 43.42 0.00 0.00
29-Jul-08 17573.00 42.81 0.87 2.03
of July 2008

Variation in the above table that whereas on 15th and 29th July there is high variation in
92
Rate for the Month of August 2008
Avg.
Date Purchase
Rate
12-Aug-08 4295.00 42.17 0.00 0.00
19-Aug-08 318122.66 43.40 0.00 0.00
22-Aug-08 476.44 43.40 0.00 0.00
27-Aug-08 1950.50 43.60 0.00 0.00
28-Aug-08 100.00 43.61 0.00 0.00
29-Aug-08 7327.89 43.61 0.00 0.00
of August 2008

Variation in the above table that there is no intra-exchange rate variation
93
Rate for the Month of September 2008
Avg.
Date Purchase
Rate
3-Sep-08 5000.00 44.40 0.00 0.00
4-Sep-08 1572.00 44.10 0.00 0.00
10-Sep-08 182.00 44.86 0.00 0.00
12-Sep-08 1300.00 45.42 0.00 0.00
16-Sep-08 102131.00 46.57 0.06 0.14
17-Sep-08 382535.73 46.12 0.00 0.00
22-Sep-08 19898.00 45.22 0.00 0.00
of September 2008

Variation in the above table that whereas on 16th September there is low variation in
94
Rate for the Month of October 2008
Avg.
Date Purchase
Rate
3-Oct-08 22267.00 46.68 0.00 0
6-Oct-08 3669.00 47.28 0 0
of October 2008

Variation in the above table that there is no intra-exchange rate variation.
95
3.2.53 Analysis of Intra-Day Variations in Euro Exchange (Purchase)
Rate for the Months of October 2007 – October 2008
Avg.
Total Euro Standard coefficient
Date Purchase
Rate
19-Oct-07 20000.00 56.30 0.00 0.00
23-Oct-07 25000.00 55.92 0.00 0.00
6-Dec-07 40000.00 57.20 0.00 0.00
8-Jan-08 12479.70 58.34 0.00 0.00
5-Feb-08 2000.00 58.01 0.00 0.00
16-Apr-08 20250.00 62.61 0.00 0.00
8-May-08 1950.00 62.83 0.63 1.00
30-May-08 1959.19 65.82 0.00 0.00
11-Jun-08 12000.00 56.00 0.00 0.00
30-Jun-08 1333.45 68.06 0.26 0.38
17-Jul-08 7983.45 65.86 0.00 0.00
7-Aug-08 200.00 64.22 0.00 0.00
4-Sep-08 4914.00 64.00 0.07 0.11
10-Sep-08 11281.50 63.25 0.00 0.00
3-Oct-08 4250.00 64.45 0.00 0.00
Table 3.59: Intra-Day Variations in Euro Exchange (Purchase) Rate for the Months
of October 2007-October 2008

Variation in the above table that on 8th May the variation in exchange rate is high,
whereas on 30th June,4th September there is low variation in exchange rate. On rest of
the days there is no intra-exchange rate variation.
96
3.2.54 Analysis of Intra-Day Variations in Pound Exchange (Purchase)
Rate for the Months of October 2007 – October 2008
Avg.
Date Purchase
Rate
19-Dec-07 4000.00 79.19 0.00 0.00
24-Dec-07 50000.00 77.82 0.17 0.22
4-Mar-08 350.00 81.57 0.00 0.00
18-Mar-08 3000.00 81.06 0.00 0.00
3-Apr-08 16000.00 78.92 0.00 0.00
15-Apr-08 9754.46 78.92 0.00 0.00
29-Apr-08 3700.00 79.62 0.00 0.00
8-May-08 2500.00 81.16 0.40 0.50
13-May-08 4220.00 81.72 0.00 0.00
6-Jun-08 2000.00 83.39 0.00 0.00
25-Jun-08 4880.00 84.19 0.00 0.00
9-Jul-08 150.00 85.03 0.00 0.00
11-Jul-08 5000.00 84.23 0.00 0.00
15-Jul-08 100.00 83.49 0.00 0.00
29-Jul-08 4680.00 84.36 0.00 0.00
12-Aug-08 3705.00 80.32 0.00 0.00
25-Aug-08 4895.00 79.87 0.00 0.00
4-Sep-08 3500.00 78.48 0.00 0.00
22-Sep-08 31780.00 82.81 0.08 0.09
Table 3.60: Intra-Day Variations in Pound Exchange (Purchase) Rate for the

Variation in the above table on 24th December 07,8th May 08,22nd September there is
low variation in exchange rate. On rest of the days there is no intra-exchange rate
variation.
97
3.3.1 Analysis of Currency-wise Number of Foreign exchange
Transactions of PNB, Lucknow Region from October 2007-October
2008
(Figures in Number of Transactions)
Currency/
USD EUR GBP Others Total
Month
Oct-07 40 24 13 4 81
Nov-07 87 34 41 8 170
Dec-07 62 48 52 6 168
Jan-08 59 35 42 9 145
Feb-08 45 35 36 8 124
Mar-08 56 53 59 10 178
Apr-08 53 29 32 2 116
May-08 64 47 56 6 173
Jun-08 63 42 50 5 160
Jul-08 60 45 63 8 176
Aug-08 57 43 44 7 151
Sep-08 66 28 31 4 129
Oct-08 36 18 33 3 90
Total 748 481 552 80 1861
Percentage 40.19 25.85 29.661 4.2988 100
Table : 3.61Analysis of Currency-wise Number of Foreign exchange Transactions
Interpretation: By analyzing the above table it can be concluded that the three major
currencies that were dealt at the bank during the one year period are US Dollar, Euro and
GB Pound. The percentage of Dollar transactions is 40%, Euro constitutes 26% and the
Pound constitutes 30% of the total transactions. They together form more than 95% of the
foreign exchange transactions.
The other currencies form just 4% of the total transactions and the other currencies that
are dealt are:
98
• Australian Dollar
• Canadian Dollar
• Swiss Franc
• Japanese Yen
• Singapore Dollar
Chart 3.7: Currency-wise number of Foreign Exchange Transactions
Conclusion: The above graph represents that the maximum number of foreign exchange
transactions are for US Dollar, followed by GB Pound and Euro.
99
3.3.2 Analysis of Currency-wise Amount of Foreign exchange
Transactions of PNB, Lucknow Region from October 2007-October
2008
(Figures in Rupees per 1000000)
Currency/
USD EUR GBP Others Total
Months
Oct-07 35.20 31.72 25.51 0.94 93.37
Nov-07 29.29 47.14 116.09 4.60 197.13
Dec-07 21.58 93.89 107.63 0.63 223.73
Jan-08 64.85 64.97 80.50 2.24 212.56
Feb-08 27.36 69.95 52.65 0.59 150.54
Mar-08 46.20 92.62 205.87 2.06 346.75
Apr-08 16.88 68.10 27.88 0.17 113.03
May-08 53.10 73.45 152.44 0.49 279.48
Jun-08 125.71 81.13 85.26 0.45 292.54
Jul-08 28.16 234.16 213.49 2.33 478.15
Aug-08 57.90 189.89 75.31 1.12 324.23
Sep-08 92.09 84.13 22.34 4.36 202.93
Oct-08 19.81 527.20 81.71 0.86 629.59
TOTAL 618.12 1658.35 1246.69 20.84 3544.01
Percentage 17.44 46.79 35.18 0.59 100.00
Table 3.62: Analysis of Currency-wise Amount of Foreign exchange Transactions
Interpretation: By analyzing the above table representing the composition of currencies

on the basis of amount in Rupees being transacted, it can be concluded that maximum
amount of transactions are of Euro. It constitutes about 47% of the total amount of
foreign exchange transactions in terms of Rupees. The next highest currency being
transacted is Great Britain Pound which forms 35% of the total transactions. US Dollar
though had the most number of transactions, it constitutes only 17% of the total
transactions in terms of amount in Rupees.
The other currencies form just about 1% of the total and include the following currencies:
100
Australian Dollar
• Canadian Dollar
• Swiss Franc
• Dutch Krone
• Japanese Yen
Chart 3.8: Currency-wise Amount of Foreign Exchange Transactions
101
Conclusion: The above chart represents that the maximum amount in terms of Rupees
has been transacted for Euro. The next highest currency transacted in terms of Rupees is
GB Pound, followed by US Dollar.
3.4 Analysis of Profitability of the Foreign Exchange Transactions by

studying the commission earned by the Bank
(Figures in Rupees)
Currency/
DOLLAR EURO POUND OTHERS Total
Months
Oct-07 9622 9853 7613 540 27628
Nov-07 16554 13393 34539 540 65026
Dec-07 9870 11253 30641 0 51764
Jan-08 12836 19889 22655 399 55779
Feb-08 12124 21123 15768 140 49155
Mar-08 15034 28569 55438 857 99898
Apr-08 7730 21487 8530 0 37747
May-08 16783 24046 46611 0 87440
Jun-08 28590 31058 21013 4227 84888
Jul-08 8907 70117 57911 130 137065
Aug-08 14488 55418 23643 230 93779
Sep-08 36966 2881 8733 7114 55694
Oct-08 35113 17348 32920 1875 87256
Total 224617 326435 366015 16052 933119
Percentage 24 35 39 2 100
Table 3.63: Analysis of Currency-wise Composition of the Commission earned by

the bank on various foreign exchange transactions
Interpretation: It can be inferred from the above table that the maximum commission
earned by the bank on the foreign exchange transactions done by them comes from
transacting Great Britain Pound, which constitutes about 39% of the total commission
earned by the bank. The next highest commission is earned by the bank from the Euro
transactions which is about 35% of the foreign exchange transaction. 24% of the
commission earned by the bank comes from the US Dollar transactions.
The other currencies form about 2% of the total commission earned by the bank. The
other currencies that were transacted are:
102
• Australian Dollar
• Canadian Dollar
• Dutch Krone
• Swiss Franc
• Japanese Yen
Chart 3.9: Analysis of Currency-wise Composition of the Commission earned by the

bank on various foreign exchange transactions
103
Conclusion: It can be concluded from the above chart that the maximum commission is
earned by the bank for its GB Pound transactions, followed by Euro and Dollar
respectively.
104
3.5 Analysis of Composition of Foreign Exchange Transactions on the
basis of Purpose
(Figures in Numbers)
Purpose/
Imports Receivables Education Others Total
Month
Oct-07 72 7 1 3 83
Nov-07 127 15 13 14 169
Dec-07 137 14 8 8 167
Jan-08 107 6 16 16 145
Feb-08 88 14 8 14 124
Mar-08 145 12 8 12 177
Apr-08 76 17 10 13 116
May-08 138 8 5 22 173
Jun-08 129 13 7 11 160
Jul-08 146 15 2 13 176
Aug-08 128 12 6 5 151
Sep-08 101 17 5 6 129
Oct-08 83 4 2 1 90
Total 1477 154 91 138 1860
Percentage 79.40 8.28 4.89 7.42 100
Table 3.64: Analysis of Composition of Foreign exchange Transactions on the basis
of Purpose
Interpretation: The above table which classifies the number of transactions on the basis
of the purpose of transaction, concludes that the maximum number of transactions of
foreign exchange are to cater to Import Bills. It constitutes about 80% of the total
transactions. The other receivables like Exports Bills and receipts from abroad constitute
about 8% of the total transactions. Education also forms a major part of the foreign
exchange transactions and forms about 5% of the total transactions. The other purpose for
which foreign exchange transactions are carried out constitute about 7% and includes the
following:
105
• Medical
• Personal
• Publishing Fee
• Surrender of Foreign Currency Notes
• Travel
Chart 3.10: Analysis of Purpose-wise Composition of Foreign Exchange

transactions
Conclusion: It can be concluded from the above chart that the maximum foreign
exchange transactions are made for the purpose of Import Bills.
106
4.1 SUMMARY
This study involved analyzing the foreign exchange transactions of the Punjab
National Bank in the Lucknow Region for the period October 2007 – October 2008.
This study involved analyzing the inter-day fluctuations of foreign exchange
transactions, the intra-day fluctuations in the foreign exchange rate and also analyzing
the composition of currency of foreign exchange transaction, the profitability of the
foreign exchange transaction, the foreign exchange transactions on the basis of
Purpose of transactions carried out in the Punjab National Bank in Lucknow Region.
After analyzing it by using standard deviation, coefficient of variation and arithmetic
mean, it can be concluded that for some months the inter-day fluctuations in the
exchange rate is high, for some months the inter-day fluctuations in the exchange rate
is low and on the other hand in some months there have been no inter-day
fluctuations in the exchange rate.
107
4.2 FINDINGS
From the analysis of data of foreign exchange transactions of Punjab National Bank,
Lucknow region from October 2007 to October 2008, the following findings can be
concluded:
• By studying the inter-day variations, it can be concluded that in the month of May
2008 there are most variations in the Dollar exchange (Selling) rate. Even for
Euro Exchange (Selling) rate the most variations are in the month of May 2008.
The same trend was seen for Pound, where the exchange (Selling) rate variations
are highest for the month of May 2008.After analyzing the standard deviation and
coefficient of variation for the 12 months, it can be concluded that for some
months the inter-day fluctuations in the exchange rate is high, for some months
the inter-day fluctuations in the exchange rate is low and on the other hand in
some months there have been no inter-day fluctuations in the exchange rate.
• While for the Dollar (Purchase) rate the most variations are in the month of April
2008, the Euro exchange (Purchase) rate the most variations were found in the
month of May 2008. For Pound Exchange (Purchase) rate, the highest variations
were found in September 2008.
• By analyzing the intra-day variations for Dollar, Euro and Pound, it can be found
that there have been low intra-day variations in the selling and buying exchange
rate. Most of the days the there have been intra-day variations but these have been
low.
• The analysis of data shows that the three major currencies that are dealt in the
bank are Dollar, Euro and Pound which form more than 90% of the total
transactions of foreign exchange carried out at the bank.
• Dollar constitutes the maximum 40% of the total transactions on the basis of
number of total transactions.
• While Euro constitutes about 47% of the total transactions if analyzed on the basis
of amount in terms of Rupee equivalent.
108
• The analysis of commission charged by the bank on the various foreign exchange
transactions shows that the most commission is earned by the bank from Great
Britain Pound (GBP) transactions which is about 37% of the total commission
earned by the bank.
• It can be concluded from the analysis that the major purpose of foreign exchange
transactions at the Punjab National Bank, Lucknow is Imports which constitutes
about 79% of the total number of transactions.
109
4.3 CONCLUSION
The study of the foreign exchange transactions of Punjab National Bank in Lucknow
Region during October 2007 – October 2008 revealed many patterns in the foreign
exchange transactions carried out at the bank. For the first objective the standard
deviation and coefficient of variation are analyzed for the 12 months. From that it can be
concluded that for some months the inter-day fluctuations in the exchange rate is high,
for some months the inter-day fluctuations in the exchange rate is low and on the other
hand in some months there have been no inter-day fluctuations in the exchange rate.
For the objective to analyze the intra-day variations the standard deviation and coefficient
of variation for the 12 months are studied, and it can be concluded that for some months
the intra-day fluctuations in the exchange rate is high, for some months the intra-day
fluctuations in the exchange rate is low and on the other hand in some months there have
been no intra-day fluctuations in the exchange rate.
By analyzing the composition of foreign exchange transactions it can be concluded that

even though Dollar forms the most traded currency in terms of number of transactions but
Euro accounts for the maximum amount in terms of Rupees that was transacted at PNB
during October 2007-October 2008. It can also be found that the three major currencies
transacted at PNB in Lucknow region are US Dollar, Euro and GB Pound.
The commission analysis shows that Euro transactions account for the maximum
commission in terms of Rupee earned by the bank through its foreign exchange
transactions.
The analysis of composition of foreign exchange transactions on the basis of their

purpose shows that the maximum number of foreign exchange transactions that are
executed in the bank are for the purpose of honoring the import bills. The other purposes
form a low percentage as compared to the number of Import bills that are honored by
PNB during October 2007-October 2008.
110
5.1 REFERENCES
1. Survey of foreign exchange and derivatives market activity in Canada, By: Bank
of Canada, April 2001
2. Statistics on foreign exchange transactions-new insight into foreign exchange

markets, By: Meyer, Erik, Skjelvik, Janett, Published: July 2006, Economic
Bulletin
3. Analysis of Exchange Rate Fluctuations for Thailand, By: Yu Hsing, Published:

2007, International Journal of Economic Research
4. Forex Markets in India, By: Vepa Kamesan, Published: 2007, Economic

Development in India, Vol 46
5. Development of Forex Markets in India, By: KJ Udeshi, Published: 2007,

Economic Development in India, Vol 79
6. FEMA Guidelines
7. FEDAI Guidelines
111

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A Study of Foreign Exchange Transactions of

Punjab National Bank, Lucknow Region

A Project Report Submitted in partial fulfillment of the requirements

Under the Guidance of

VIT Business School

Vellore - 632 014, Tamil

Administration is a bonafide record of work carried out by him / her under my

Programme Manager Faculty Guide

Internal Examiner External Examiner

fulfillment of the requirements of the Degree of Master of Business Administration of the

VIT University, is his/her original work.

First and foremost I would like to express my acknowledgement to our Chancellor,

1.1 Meaning of Foreign Exchange Transactions 1

1.2 Nature of Foreign Exchange Transactions 4

1.3 Foreign Exchange Market in India 6

1.4 Statement of Problem 14

1.7 Limitations of the Study 17

Chapter 2 – Company Profile 19

2.1 Punjab National Bank – Profile 19

2.2 Foreign Exchange Transactions at Punjab National Bank 21

2.3 International Network of Punjab National Bank 24

2.4 Literature Review 25

Chapter 3 – Data Analysis and Interpretation 28

3.1.1 Analysis of Inter-day variations in the Selling Rate of Dollar

over the 12 months 28

3.1.2 Analysis of Inter-Day Variations in the Selling Rate

of Euro over the 12 Months 29

3.1.3 Analysis of Inter-Day Variations in the Selling Rate

of Dollar over the 12 Months 31

3.1.5 Analysis of Inter-Day Variations in the Purchase Rate

of Euro over the 12 Months 32

3.1.6 Analysis of Inter-Day Variations in the Purchase Rate

of Pound over the 12 Months 33

3.2.1 – 3.2.13 Analysis of Intra-Day Variations in Dollar Exchange

3.2.14 – 3.2.26 Analysis of Intra-Day Variations in Euro Exchange

3.2.27 -3.2.39 Analysis of Intra-Day Variations in Pound Exchange

3.2.40 – 3.2.52 Analysis of Intra-Day Variations in Dollar Exchange

3.2.53 Analysis of Intra-Day Variations in Euro Exchange (Purchase)

Rate for the Months of October 2007 – October 2008 85

3.2.54 Analysis of Intra-Day Variations in Pound Exchange (Purchase)

Rate for the Months of October 2007 – October 2008 86

3.3.1 Analysis of Currency-wise Number of Foreign exchange Transactions

of PNB, Lucknow Region from October 2007-October 2008 87

3.3.2 Analysis of Currency-wise Amount of Foreign exchange Transactions

of PNB, Lucknow Region from October 2007-October 2008 89

3.4 Analysis of Profitability of the Foreign Exchange Transactions by

3.5 Analysis of Composition of Foreign Exchange Transactions on

the basis of Purpose 93

1.1 Meaning of Foreign Exchange Transaction

Foreign exchange is traded without the constraints of a central physical exchange.

Functions of Foreign Exchange Market

• Transfer of purchasing power – it facilitates trade between parties living in

Foreign Exchange Quotes

Ask: Price at which broker/dealer is willing to sell. It is same as "Offer".

Bid: Price at which broker/dealer is willing to buy.

GBP Great Britain Pound

JPY Japanese Yen

CHF Swiss Franc

CAD Canadian Dollar

AUD Australian Dollar

NZD New Zealand Dollar

GLD Spot Gold