Foreign Exchange Money changers give competitive rates than Banks in India

Recently I wanted to purchase a few United States dollars.  I will be visiting my son in USA.  I visited a private sector bank and asked for the rates.  The staff member said it will be Rs.67.25 per US dollar and Service tax of Rs100+ will be charged.  She said if you tell us now we will get these dollars from the money changers and you can take them from us the next day.

 

I said I want the foreign exchange that day itself and took the phone number of money changers.  On the way I enquired another money changer and he also quoted 1 US dollar = Rs.67.25 plus service tax.  This dealer wanted me to bring passport copy, visa copy, aadhar card etc.  I said I will bring them and reached my home.

 

Then I contacted the FX money changer’s phone number.  Immediately the staff said “Sir please give me your cell number.  I will call in another five minutes”.   I gave my number.   I received a phone call from them and they quoted 1 US dollar = Rs.66.10 plus service tax.  This suited me because I can save nearly Rs.1.15 per dollar.  The agent also offered to bring the currency to home but wanted credit in his account at the time of delivery of foreign exchange currencies.

I agreed for that.  I took the details of account no. I waited for the money changer.  Prompt came their representative.  He had brought a few small denomination currencies also.   I checked the currencies.  He gave the bill and I got the money credited to their account through online NEFT.

With this transaction was over and I saved a good amount of Indian rupees.  In case I had bought more dollars on that day I could have save more Indian rupees also.

My point is that nowadays Banks are not offering competitive rates for money changing transactions because they are not holding over night balance in currencies and they rely on money changers for such transactions.  Obviously they have to load their profit margin also and that is why Banks quote such high rates.

May be the situation is same in other countries like USA, Canada, UK, Germany, Philipines, China, Indonesia, Russia also.

 

good day.