Foreign dealers instructions on bank charges

The Foreign Exchange Dealers' Association (FEDAI) has issued instructions to all banks that the recovery of bank charges should be based on actuals and not be treated as a source of income.

"We reiterate that recovery of bank charges towards courier/out-of-pocket expenses be based on actuals without considering these transactions as means of additional revenue. Member banks are requested to be guided by our said circular of October 7, 2003," the FEDAI said in a circular issued earlier this month.

The association had, in a circular issued in October 2003, said the actual out-of-pocket expenses such as courier tariff, telex charges and other handling charges, if any, would be recovered by member banks based on actuals and customers would be informed in advance about the bank's schedule of charges on various forex transactions.

The circular has been issued by the FEDAI following an open house organised by the Export Promotion Council for EOUs and SEZs in Kolkata, where it was pointed out that banks are levying various exorbitant charges like courier charges and commission charges for remittance.