CEAI urges Finance Ministry to block foreign currency transactions in India through US banking system

New Delhi, 30 Dec (KNN) The Consulting Engineers Association of India (CEAI) an apex body of consulting engineers in the country in a letter has urged the Union Ministry of Finance to intervene and ensure that the foreign currency transactions within the country be not routed through the United States (US) banking system in order to avoid transaction fee, said the press release.

“Currently transaction fee is levied on US Dollars transactions within the Country.  As you are aware, while transacting in US Dollars or UK Pounds or Japanese Yen between any two countries, the payment is routed through the corresponding Banking system and a transaction fee is paid,” said K K Kapila, Chairman, Business and Policy Committee, CEAI.

“The transactions in US Dollars payments within India, say a payment in USD from Delhi to Hyderabad from one entity to the other in the current dispensation, is required to be undertaken through the US. This should be undertaken directly through the Reserve Bank of India and there should be no requirement of routing them through the American Banking system. By routing the transactions through the American Banking system, the country is losing substantial money, which is going to the Americans towards transaction costs,” added Kapila.

He pointed out that is it not a peculiar scenario that one of the Banks from India sends dollars to the US to get them back in another Bank in India? To my mind, as long as we are transacting in US Dollars within India, there should be no transaction cost payable to the US, he stated.  

CEAI has called for an urgent correction an relook, even if it is part of some Trade Agreement.