1120917 project

LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT

Report on Summer Training

CUSTOMER SATISFACTION IN

FOREX SERVICES

AT CAPITAL LOCAL AREA BANK LTD.

Submitted to Lovely Professional University

In partial fulfillment of the

Requirements for the award of Degree of

Master of Business Administration

Submitted by:

APINDER SINGH BATRA

11207917-B33

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

JALANDHAR NEW DELHI GT ROAD

PHAGWARA

PUNJAB

Acknowledgement

I have taken efforts in this project. However, it would not have been possible without the kind support and

help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am

highly indebted to Jatinder Kumar (Executive) for their guidance and constant supervision as well as for

providing necessary information regarding the project & also for their support in completing the project. I

would like to express my gratitude towards my parents & member of Capital Local Area Bank Ltd. for their

kind co-operation and encouragement which help me in completion of this project. I would like to express

my special gratitude and thanks to industry persons for giving me such attention and time. My thanks and

appreciations also go to my colleague in developing the project and people who have willingly helped me

out with their abilities.

INDEX

Description Page no.

Executive Summary 4

Chapter 1 Introduction 6

(1.1) Importance of customer satisfaction 7,8

(1.2) Foreign Exchange meaning and features 8 to 10

(1.3) Scope, Significance and need 10

Chapter 2 Industry Profile 11

(2.1) Banking Structure In India 12 to 14

(2.2) Company Profile 14 to 16

(2.3) Retail Forex in Jalandhar 17

(2.4) Forex Services at Captial Local Area Bank 17 to 53

Chapter 3 Literature Review 54 to 59

Chapter 4 Research Methodology 60 to 65

Chapter 5 Data Analysis 66 to 79

Chapter 6 Conclusion 81

References 82

Appendix 83 to 85

Executive Summary

Customers’ satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of

satisfaction will vary from person to person and product/service to Product/service. The state of satisfaction

depends on a number of both psychological and physical variables which correlate with satisfaction

behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other

options the customer may have and other products against which the customer can compare the

organization's products. With the phenomenal increase in the country's population and the increased demand

for banking and Forex services; speed, service quality and customer satisfaction are going to be key

differentiators for each bank's future success. Thus, it is imperative for banks to get useful feedback on their

actual response time and customers’ service quality perceptions of retail banking, which in turn will help

them take positive steps to maintain a competitive edge. This project helps to study the satisfaction level of

customers of Forex services in Capital Local Area bank in India.

CHAPTER 1

INTRODUCTION

INTRODUCTION

A research in common parlance refers to a search for knowledge. One can also define research as a scientific

and systematic research for pertinent information on a specific topic. In fact, research is an art of scientific

investigation.

Redman & Mory define research as a “systematic effort to gain new knowledge.”

Some people consider research as a movement, a movement from the known to unknown. It is actually a

voyage of discovery. Research comprises defining and redefining problems, formulating hypothesis or

suggested solutions, collecting, organizing and evaluating data, making deductions and reaching conclusions

and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis.

Research is, thus, an original contribution to the existing stock of knowledge making for its advancement. It

is the pursuit of truth with help of study, observation, comparison, and experiment.

In a competitive market place where businesses compete for customers, customer satisfaction is seen as a

key differentiator and increasingly has become a key element of business strategy. Customers’ satisfaction is

an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from

person to person and product/service to product/service. The state of satisfaction depends on a number of

both psychological and physical variables which correlate with satisfaction behaviors’ such as return and

recommend rate. The level of satisfaction can also vary depending on other options the customer may have

and other products against which the customer can compare the organization's products. The banking

industry is highly competitive, with banks not only competing among each other; but also with non-banks

and other financial institutions. Most bank product developments are easy to duplicate and when banks

provide nearly identical services, they can only distinguish themselves on the basis of price and quality.

Therefore, customer satisfaction is potentially an effective tool that banks can use to gain a strategic

advantage and survive in today’s ever-increasing banking competitive environment.

The argument for customer retention is relatively straightforward. It is more economical to keep customers

than to acquire new ones. The costs of acquiring customers to “replace” those who have been lost are high.

This is because the expense of acquiring customers is incurred only in the beginning stages of the

commercial relationship. In addition, longer-term customers buy more and, if satisfied, may generate

positive word-of mouth promotion for the company. Additionally, and are less sensitive to price changes.

These findings highlight the opportunity for management to acquire referral business, as it is often of

superior quality and inexpensive to obtain. Thus, it is believed that reducing customer defections by as little

as five percent can double the profits.

Customer satisfaction has been a subject of great interest to organizations and researchers alike. The

principal objective of organizations is to maximize profits and to minimize cost. Profit maximization can be

achieved through increase in sales with lesser costs. One of the factors that can help to increase sales is

customer satisfaction, because satisfaction leads to customer loyalty (Wilson et al., 2008, p. 79),

recommendation and repeat purchase.

Customers became very vital in business during the marketing era of the 1950s when companies could

produce what they can sell and not just selling what they can produce as it was during the production era.

Since the beginning of the consumption era in marketing, the focus on customers/consumers has increased

more as the consumption era also shifts to post-consumption; where organizations are obliged to render

more services in addition to what they provide as offers to their customers. (David Armano, 2009). What are

the qualities of these services provided to customers? Are the customers satisfied with these services? Thus,

this research originated from the fact that customer/consumer is the key to business. In fact, their satisfaction

is the most important tool that helps to increase sales and generate profits in the business environment.

Moreover, the importance of customer satisfaction and service quality has been proven relevant to help

improve the overall performance of organizations. (Magi & Julander, 1996, p. 40).

1.1 Importance of customer satisfaction

From the view of operations management, it is obvious that customers play important roles in the

organizational process (Lee & Ritzman, 2005, p. 92). Before the placement of strategies and organizational

structure, the customers are the first aspect considered by managements. The questions asked in the strategic

planning ranges from who will need to consume these offers, where are they and for how much can they buy

to how to reach the customers and will it yield them maximum satisfaction? After these questions, the

organization will then designs the product, segment the markets and create awareness. This does not only

show the importance of customers in the business environment but also the importance of satisfying them.

Customers are always aiming to get maximum satisfaction from the products or services that they buy.

Winning in today’s marketplace entails the need to build customer relationship and not just building the

products; building customer relationship means delivering superior value over competitors to the target

customers (Kotler et al., 2002, p. 391). Whether an organization provides quality services or not will depend

on the customers’ feedback on the satisfaction they get from consuming the products, since higher levels of

quality lead to higher levels of customer satisfaction (Kotler & Keller. 2009, p. 169).

Most companies are adopting quality management programs which aim at improving the quality of their

products and marketing processes, because it has been proven that “quality has a direct impact on product

performance, and thus on customer satisfaction” (Kotler et al., 2002, p. 8). The reason for this is to satisfy

the customers. But, are the customers satisfied because of the products or service quality? I.e. are the

companies providing the actual qualities perceived by the customers/consumers?

In this era of globalization, people/company is migrating and operating from one country to another. But the

value of currency of one country differs from another. So the people face various problems to transact from

owned local currency in to the international market. So a service marketer wanted to make inconvenient

when the transaction is done between different values of currency. This study has been undertaken to

analyze whether the customers who deals with Capital Local Area Bank for foreign exchange services in this

twin cities are satisfied with the services provided by the Capital Local Area Bank or not. In today’s market

there are many foreign exchange service providers, but every customer has some preference to choose a

particular foreign exchange service provider, and the customer who has used Capital Local Area

Bank service at least once will only use the Capital Local Area Bank services again when heist satisfied with

the services provided by the Capital Local Area Bank; because if performance he expectations the customer

is satisfied. A satisfied customer is a repeat buyer and if the customer is satisfied they also says good things

about the product or services to the others.

1.2 Meaning of Foreign Exchange:-

The foreign exchange market exists wherever one currency is traded for another. The foreign exchange

market is an over the counter market in which currencies of different countries are bought and sold against

each other. Foreign Exchange is nothing but claims of the residents of a country to foreign currency payable

abroad. It is a method of converting one country's currency into another. So as long as there is a cross border

flow of funds, the need for such conversion/exchange continues to arise; for example if you are living in

India and want to buy electronic goods from Japan, either you or the company that you buy the electronic

goods from has to pay them in Yen. This means that the Indian importer would have to exchange the

equivalent value of Indian Rupee (INR) into Yen. The same goes for traveling. An Indian tourist in China

can't pay in INR to see the Great Wall of China because it's not the locally accepted currency. As such, the

tourist has to exchange the INR for the local currency.

FOREIGN EXCHANGE MARKET OVERVIEW

In today’s world no economy is self sufficient, so there is need for exchange of goods and services amongst

the different countries. So in this global village, unlike in the primitive age the exchange of goods and

services is no longer carried out on barter basis. Every sovereign country in the world has a currency that is

legal tender in its territory and this currency does not act as money outside its boundaries. So whenever a

country buys or sells goods and services from or to another country, the residents of two countries have to

exchange currencies. So we can imagine that if all countries have the same currency then there is no need for

foreign exchange. Let us consider a case where Indian company exports cotton fabrics to USA and invoices

the goods in US dollar. The American importer will pay the amount in US dollar, as the same is his home

currency. However the Indian exporter requires rupees means his home currency for procuring raw materials

and for payment to the labor charges etc. Thus he would need exchanging US dollar for rupee. If the Indian

exporters invoice their goods in rupees, then importer in USA will get his dollar converted in rupee and pay

the exporter. From the above example we can infer that in case goods are bought or sold outside the country,

exchange of currency is necessary.

Sometimes it also happens that the transactions between two countries will be settled in the currency of third

country. In that case both the countries that are transacting will require converting their respective currencies

in the currency of third country. For that also the foreign exchange is required. Particularly for foreign

exchange market there is no market place called the foreign exchange market. It is mechanism through

which one country’s currency can be exchange i.e. bought or sold for the currency of another country. The

foreign exchange market does not have any geographic location.

Foreign exchange market is described as an OTC (over the counter) market as there is no physical place

where the participant meets to execute the deals, as we see in the case of stock exchange. The largest foreign

exchange market is in London, followed by the New York, Tokyo, Zurich and Frankfurt. The market is

situated throughout the different time zone of the globe in such a way that one market is closing the other is

beginning its operation. Therefore it is stated that foreign exchange market is functioning throughout 24

hours a day. In most market US dollar is the vehicle currency, viz., the currency sued to dominate

international transaction. In India, foreign exchange has been given a statutory definition. Section 2 (b) of

foreign exchange regulation ACT, 1973 states: Foreign exchange means foreign currency and includes:

� All deposits, credits and balance payable in any foreign currency and any draft, traveler’s cheques,

letter of credit and bills of exchange. Expressed or drawn in India currency but payable in any

foreign currency.

Any instrument payable, at the option of drawer or holder thereof or any other party thereto, either in Indian

currency or in foreign currency or partly in one and partly in the other. In order to provide facilities to

members of the public and foreigners visiting India, for exchange of foreign currency into Indian currency

and vice-versa. RBI has granted to various firms and individuals, license to undertake money-changing

business at seas/airport and tourism place of tourist interest in India. Besides certain authorized dealers in

foreign exchange (banks) have also been permitted to open exchange bureaus. Following are the major

bifurcations:

� Full fledge moneychangers – they are the firms and individuals who have been authorized to take

both, purchase and sale transaction with the public.

� Restricted moneychanger – they are shops, emporia and hotels etc. that have been authorized only

to purchase foreign currency towards cost of goods supplied or services rendered by them or for

conversion into rupees.

� Authorized Dealers – they are one who can undertake all types of foreign exchange transaction.

Bank are only the authorized

Features of Forex Market:-

• One unique aspect of this international market is that there is no central marketplace for currency

exchange. Rather, trade is conducted electronically over-the-counter (OTC), which means that all

transactions occur via computer networks between traders around the world, rather than on one centralized

exchange.

• The market is open 24 hours a day, five and a half days a week.

• Currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich,

Frankfurt, Hong Kong, Singapore, Paris and Sydney - across almost every time zone. This means that when

the trading day in the U.S. ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex

market can be extremely active any time of the day, with price quotes changing constantly.

1.3 Scope of the Study

The scope of the study is restricted to the Jalandhar district only.

In this era it is very imperative to know about the customer satisfaction about a particular product or services

in order to improve the quality of product services. So that business can sustain in the market. With

their money consumers elect the retailers, and if they are not satisfied by the service of one company they

will surely go and use the same service provided by the other company where they are satisfied. So

ultimately, Consumers determine which companies will survive in the market, and which will go out of

business.

Significance of the Study

Only customers can determine the fate of the company; that means only customers determine which

organizations will survive and which one will fail. After knowing the customer satisfaction level; the

company can know with which services the customers are most satisfied and which services need

improvement at Capital Local Area Bank which provides foreign exchange services for the retailers well as

whole sale customers.

Need for the Study:

A foreign exchange market exists wherever one currency is traded for another. Customers play a vital role in

the increase of sales and in getting profits to the company. As competition in foreign exchange market is

growing up day by day, every company needs to concentrate on each and every aspect of its activities.

Customers should be satisfied with the foreign exchange rates, service quality, place where it is located, etc.

So every company needs to know the satisfaction level of its customers; and try to reach expectations of the

customers.

CHAPTER 2

INDUSTRY PROFILE

2.1 Banking Structure in India

Problems in the banking sector can seriously affect the real economy, as has been experienced globally in

the last few years. Therefore, a well-regulated banking system is a key comfort for local and foreign stake-

holders in any country. Prudent banking regulation is recognized as one of the reasons why India was less

affected by the global financial crisis.

The Banking Regulation Act, 1949 defines a banking company as a company which transacts the business of

banking in India. Banking is defined as accepting, for the purpose of lending or investment, of deposits of

money from the public, repayable on demand or otherwise and withdraw able by cheque, draft, order or

otherwise. Section 49A of the Act prohibits any institution other than a banking company to accept deposits

from the public withdrawable by cheque. RBI is the apex regulator for banks.

Banks can be broadly categorized as Commercial Banks or Co-operative Banks.

Commercial Banks include:

• Public Sector Banks (SBI, SBI Associates and Nationalized Banks)

• Private Sector Banks (Old, New, Foreign and Local)

• Regional Rural Banks

Co-operative Banks include:

• Urban co-operative banks

• Rural / Agricultural co-operative banks.

Banks which meet specific criteria are included in the second schedule of the RBI Act, 1934. These are

called scheduled banks. They may be commercial banks or co-operative banks. Scheduled banks are

considered to be safer, and are entitled to special facilities like re-finance from RBI. Inclusion in the

schedule also comes with its responsibilities of reporting to RBI and maintaining a percentage of its demand

and time liabilities as Cash Reserve Ratio (CRR) with RBI. Non-banking finance companies (NBFC)

become a source of incremental finance. At times, they finance businesses which do not meet strict banking

norms. NBFCs do not have access to cheap bank deposits from the public (in the form of savings account,

current account etc. which are discussed in the next Chapter), although they can accept fixed deposits. Their

cost of funds being higher than banks, their lending too tends to be at a higher rate. Yet borrowers access

these funds, either because they are unable to mobilize funds from banks, or to fund their requirements

beyond what they can mobilize from banks. NBFCs are particularly active in consumer finance and personal

finance.

Market Participants

Unlike the equity market - where investors often only trade with institutional investors (such as mutual

funds) or other individual investors -there are additional participants that trade on the forex market for

entirely different reasons than those on the equity market. Therefore, it is important

to identify and understand the functions and motivations of the main players of the forex market. The Forex

market is so complex that not only banks (AD1’s) but AD2’s, NBFC’s, FFMC’s deal in foreign exchange.

The existences of these money changers make this market a very complex one.

Governments and Central Banks

Arguably, some of the most influential participants involved with currency exchange are the central banks

and federal governments. In most countries, the central bank is an extension of the government and conducts

its policy in tandem with the government. However, some governments feel that a more independent central

bank would be more effective in balancing the goals of curbing inflation and keeping interest rates low,

which tends to increase economic growth. Regardless of the degree of independence that a central bank

possesses, government representatives typically shave regular consultations with centralbank representatives

to discuss monetary policy. Thus, central banks and governments are usually on the same page when it

comes to monetary policy. Central banks are often involved in manipulating reserve volumes in order to

meet certain economic goals. For example, ever since pegging its currency (the Yuan) to the U.S. dollar,

China has been buying up millions of dollars’ worth of U.S. treasury bills in order to keep the Yuan at its

target exchange rate. Central banks use the foreign exchange market to adjust their reserve volumes. With

extremely deep pockets, they yield significant influence on the currency markets.

Banks and Other Financial Institutions

In addition to central banks and governments, some of the largest participants involved with forex

transactions are banks. Most individuals who need foreign currency for small-scale transactions deal with

neighborhood banks. However, individual transactions pale in comparison to the volumes that are traded in

the interbank market. The interbank market is the market through which large banks transact with each other

and determine the currency price that individual traders see on their trading platform. These banks transact

with each other on electronic brokering systems that are based upon credit. Only banks that have credit

relationships with each other can engage in transactions. The larger the bank, the more credit relationships it

has and the better the pricing it can access for its customers. The smaller the bank, the less credit

relationships it has and the lower the priority it has on the pricing scale. Banks, in general, act as dealers in

the sense that they are willing to buy/sell a currency at the bid/ask price. One way that banks make money

on the forex market is by exchanging currency at a premium to the price they paid to obtain it. Since the

forex market is a decentralized market, it is common to see different banks with slightly different exchange

rates for the same currency.

Hedgers

Some of the biggest clients of these banks are businesses that deal with international transactions. Whether a

business is selling to an international client or buying from an international supplier, it will need to deal with

the volatility of fluctuating currencies. If there is one thing that management (and shareholders) detests, it is

uncertainty. Having to deal with foreign-exchange risk is a big problem for many multinationals.

For example, suppose that a German company orders some equipment from a Japanese manufacturer to be

paid in yen one year from now. Since the exchange rate can fluctuate wildly over an entire year, the German

company has no way of knowing whether it will end up paying more Euros at the time of delivery. One

choice that a business can make to reduce the uncertainty of foreign-exchange risk is to go into the spot

market and make an immediate transaction for the foreign currency that they need. Unfortunately,

businesses may not have enough cash on hand to make spot transactions or may not want to hold massive

amounts of foreign currency for long periods of time. Therefore, businesses quite frequently employ hedging

strategies in order to lock in a specific exchange rate for the future or to remove all sources of exchange-rate

risk for that transaction. For example, if a European company wants to import steel from the U.S., it would

have to pay in U.S. dollars. If the price of the euro falls against the dollar before payment is made, the

European company will realize a financial loss. As such, it could enter into a contract that locked in the

current exchange rate to eliminate the risk of dealing in U.S. dollars. These contracts could be either

forwards or futures contracts.

Speculator

Another class of market participants involved with foreign exchange-related transactions is speculators.

Rather than hedging against movement in exchange rates or exchanging currency to fund international

transactions, speculators attempt to make money by taking advantage of fluctuating exchange-rate levels

.Some of the largest and most controversial speculators on the forex market are hedge funds, which are

essentially unregulated funds that employ unconventional investment strategies in order to reap large

returns. Think of them as mutual funds on steroids. Hedge funds are the favorite whipping boys of many a

central banker. Given that they can place such massive bets, they can have a major effect on a country’s

currency and economy. Some critic’s blamed hedge funds for the Asian currency crisis of the late 1990s, but

others have pointed out that the real problem was the ineptness of Asian central bankers.

2.2 COMPANY PROFILE

Capital Local Area Bank Limited, the largest Local Area Bank in the country started its operations on

January 14, 2000. The Bank has been operating in the three contiguous Districts of Jalandhar, Kapurthala

and Hoshiarpur in Punjab for the last 13 years with excellent performance in all spheres. The Reserve Bank

of India in January 2013 has accorded the approval for expansion of area of operation of the Bank to two

more Districts of Ludhiana and Amritsar in Punjab. This expansion will go a long way for the overall

growth of the Bank.

The Bank pioneered in bringing modern banking facilities to the rural areas at a low cost. In line with the

objective for which the Local Area Banks have been set up, the Bank focused on promoting Financial

Inclusion in the area of operation since inception by providing easy access to the masses to banking services.

The aim of the Bank to provide credit for viable economic activities and deploy funds in the area of

operation only, has accredited it with the highest Credit Deposit Ratio and a role model Banking Institution

for economic development of the area.

The total business of the Bank at present is over Rs.1650 crores with a satisfied customer base of more than

2,09,000. With an objective to serve the masses, the Bank has opened 29 branches (14 rural, 12 semi urban

and 3 urban). The Bank has more than 80% of its business in rural and semi urban areas with credit exposure

of more than 32% in Agriculture. Exposure to Micro and Small Enterprises constitutes 16% of Net Bank

Credit. The tremendous performance of the Bank is evident from the fact that most of its rural and semi-

urban branches have become the largest credit branches in their respective areas in this short span.

The Bank is in the process of opening five new branches with one each in Ludhiana and Amritsar cities. The

business of the Bank has been projected to grow to Rs.1965 crores by March 31, 2014 and to Rs.2350 crores

by March 31, 2015 with 40 branches across all the five districts of area of operation of the Bank.

FINANCIAL INCLUSION

Going ahead with the national agenda to provide banking services in every unbanked village having

population of 2000 and above, the Bank has voluntarily adopted 10 villages in the first phase out of 178 such

villages identified in the area of operation of the Bank. The Bank has taken the lead in its area of operation

with extension of Banking Services in these centers through Business Correspondent Model by opening 10

Suvidha Kendras (Brick & Mortar BC outlets) as against only 1 unbanked village allocated by SLBC. In a

short span, the Bank has been able to generate a total business of Rs.71.91 crores through these ‘Suvidha

Kendras’ by opening 13059 number of accounts.

The ‘No-Frill Accounts’ of the Bank constitute 25% of the total Savings Bank accounts of the Bank.

FEATURES

� 7 day branch banking.

� Uninterrupted & extended banking hours

� -Monday to Friday (9.30 a.m. to 6.00 p.m.)

� -Saturday & Sunday (9.30 a.m. to 2.00 p.m.)

� State-of-the-art Branch Interiors.

� ATM Card acceptance at more than 115000+ ATMs across India on RuPay Network.

� Internet banking.

� Mobile banking.

� Locker Operation – 7 Days a week.

� All kinds of loans at competitive Interest rates.

ACHIEVEMENTS

� Pioneer in bringing state-of-the-art banking facilities in rural areas at a low cost.

� Promoting Financial Inclusion in area of operation since the inception by providing easy access to

masses to banking services.

� Extension of banking services to the unbanked villages through Suvidha Kendra’s (Brick & Mortar

B.C. outlets).

� 7 day branch banking from day one with extended and uninterrupted banking hours.

� Accredited with ' ICAI Award for Excellence in Financial Reporting ' for 2 consecutive - years [2008

& 2009].

� State-of-the-art Branch Interior.

� Credit Deposit Ratio of 62% as against 35% in the area.

� ZERO Net NPA.

� Business CAGR of more than 22%.

� One-Stop Financial Hub in rural and semi urban areas.

� Contribution towards economic development and employment generation in the area.

� Surpassed National Targets in Priority Sector, Agriculture and Weaker Section Advances.

� ATM Card acceptance at more than 115000+ ATMs across India on RuPay Network.

� Internet and Mobile banking facility.

2.3 Retail Forex Market in Jalandhar

The forex market consists of two major parts namely trade forex and retail forex. Trade forex covers major

portion of the foreign exchange transactions because of the involvement of large amounts for commercial

purpose. Retail foreign exchange trading is a small segment of the larger foreign exchange market where

individuals speculate on the exchange rate between different currencies. This segment has developed since

the advent of the internet and dedicated electronic trading platforms that allowed individuals to access the

global currency markets. In 2007 it had been speculated that volume from retail foreign exchange trading

represents 5 percent of the whole foreign exchange market which amounts to $50–100 billion in daily

trading turnover.

Prior to the development of forex trading platforms in late 1990s forex trading was restricted to large

financial institutions. It was the development of the internet, trading software and forex brokers allowing

trading on margin that started the growth of retail trading. Traders are able to trade spot

currencies with market makers on margin. Meaning they need to put down only a small percentage of the

trade size and can buy and sell currencies in seconds.

Retail forex trading has been promoted by some as an easy way to make profits and has thus been the focus

for a number of foreign exchange frauds. In response financial regulators in a number of countries have

introduced restrictions or provided warnings about this type of trading. However due to the decentralized

nature currency trading and the easy global access to the internet a number of brokers are based in less

restrictive jurisdiction.

2.4 FOREIGN EXCHANGE SERVICES AT CAPITAL LOCAL AREA BANK

INTRODUCTION

Capital Local Area Bank is now extending foreign exchange services to our retail customers. FES Business

will provide a broad spectrum of travel related foreign exchange and other non- trade related remittances.

In continuation of our efforts to make life of our customers truly Jiyo Easy! , Capital Local Area Bank’s

FES business offers a range of foreign currency products and services to make travel, remittance and

payments across borders easier.

CURRENCIES THAT CAPITAL LOCAL AREA BANK WILL DEAL I N

Capital Local Area Bank will currently deal in the following 13 currencies. They include

1. United States Dollars (USD),

2. Japanese Yen (JPY),

3. Swiss Francs (CHF),

4. Canadian Dollar (CAD),

5. Sterling Pound (GBP),

6. Swedish Kroner (SEK),

7. Saudi Rial (SAR),

8. Hong Kong Dollar(HKD),

9. Singapore Dollar (SGD),

10. Euro (EUR)

11. Danish Kroner (DKK),

12. Australian Dollar (AUD),

13. New Zealand Dollar (NZD).

PRODUCTS OFFERED

Products offered to retail customers under the umbrella of FES are:

• Foreign currency banknotes: Purchase and Sale of Bank Notes available in major currencies in

various denominations from customers travelling on business, leisure, education, immigration,

medical treatment etc.

• Travellers’ cheques: Instrument which is similar to bearer cheque. You need not convert the same to

cash, but can use it across the counters at shops, hotels and other establishments. Capital Local Area

shall provide TC of American Express in all major currencies through our network of branches.

Available in six currencies namely US Dollars, Euro, British Pound Sterling, Canadian Dollar,

Australian Dollar , and Japanese Yen.

Usage Guidelines.

� Sign your cheques immediately at the upper left hand corner

� Keeps the purchase receipt (PAF) mentioning the TC Nos. separately from traveler’s cheques.

� At the time of encashing the traveler's cheques, sign at the bottom left hand corner

� Make note of the Traveler's cheque Nos. as and when it is encashed.

• Forex travel card: Travel card is a prepaid card which is issued to an individual travelling abroad.

These are used for making payments at overseas merchant establishments and also for drawing cash

from ATM terminals. Travel card products are available in three major currencies including US

Dollar, Great Britain Pound and Euro. Operating on the VISA platform, these cards are accepted at

over 10 million Visa Electronic Merchant shopping establishments, in addition to providing access to

local currency through 8, 00,000 self-owned and affiliated ATMs worldwide.

Security Features

Forex Prepaid Card is protected by 4 digits secured PIN (Personal Identification Number), which prevents

anyone else from using the card, even if it is lost or stolen. Such PIN are provided to the card user in a

sealed cover and not indicated in the card.

Other features

� These cards can be used anywhere in the world other than India, Nepal and Bhutan.

� These can be converted into destination currency

� Cards can be reloaded for additional value

� Cards usage statement can be accessed through net.

� Balance amount in the card can be encashed on return or can be used for future travel

� In case of loss of card, emergency replacement card can be provided. Add-on cards also

being provided, if required

• Foreign currency demand drafts: Capital Local Area bank will offer foreign currency demand

drafts (FCY DD) in favor of the beneficiary. Customers can send the FCY DD to the beneficiary who

will receive the funds upon crediting the draft amount into his/her account abroad. Customers can

now avail FCY DD facility to make payments for various purposes like:

� University fees abroad

� Application fees

� Living expenses

� Gift remittances

� Maintenance of close relatives abroad

� Medical treatment abroad

� And all other permitted purposes as per the RBI guidelines.

FCY Demand Drafts are issued in currencies such as United States Dollars (USD), Great Britain Pounds

(GBP), EURO, Japanese Yen (JPY), Australian Dollars (AUD), Canadian dollars (CAD), New Zealand

Dollars (NZD), Hong Kong Dollars (HKD), Swiss Francs (CHF) and Singapore Dollars (SGD).

• Wire transfers: Customer can send money overseas to their relatives or friends in major currencies

through SWIFT transfer facility in place of FCY DD. It is one of the safest and most convenient

ways to send money abroad.

• Travel Insurance: Capital Local Area Bank will also offer travel insurance at very competitive rates

offering various health / accident coverage for travel to all countries

KYC/SCREENING REQUIREMENTS FOR ALL TYPES OF DEALS A ND CUSTOMERS

Ensure that all KYC requirements of the bank is met as per existing policy. All FES

customers/business partners/agents are to be screened on Compliance Enquirer before deals are

closed.

1. For individuals: Transactions of all individuals, including walk-ins, customers of travel agents,

students, retail chains, etc will undergo pre-transaction screening using Compliance Enquirer at the

branch by staff handling FES transactions.

2. For Corporates: The acceptance of all corporate accounts which are in the final stages of deal

finalization will be routed through ASFM (AML, Sanctions and Fraud Monitoring) team, who upon

verification of the company will confirm if pre transaction screening of individual customers is

required. ASFM will be given a TAT of 3 days to revert to the FES team. For those corporate

accounts which are accepted by ASFM, pre-transaction screening will be waived. However, it must

be noted that these corporate customers will continue to be subject to day end screening. For all other

corporate accounts, customers will be treated as normal individual customers and pre-transaction

screening will be performed. All individual corporate customers will be screened using Compliance

Enquirer at the branch by staff handling FES transactions.

3. Pre- transaction screening: Pre- transaction screening involves the use of a web based application

called Compliance Enquirer (CE). The branch official will verify if the customer’s name is on any

restricted party list using this application. The branch will have to maintain the screenshots of

verification done as a part of the transaction documentation. In case of any hits as a result of

screening in CE, the concerned branch will have to refer the case to the FES Business team (Level 1

alert handling). The decision for these alerts will be taken by the FES Business team. The branch can

process the transaction only after receiving the approval from the FES Business team. The FES

Business team will provide a weekly MIS to the ASFM on the alerts referred. In case of doubt as a

part of the escalation process the FES Business team should refer the alert to the Sanctions team

(Level 2 alert handling). The TAT for ASFM reply would be 1 hour. All alerts referred to the ASFM

team can be processed only after receiving their approval.

4. Process for screening for Haj: Screening of all Haj customers is waived as an exception, given that

the list of all Haj customers is provided to the Bank by the Haj Committee which is a constitutional

body. Transactions that are being proposed is for generation of small value foreign currency drafts on

behalf of individuals for the payment of their boarding and lodging during the Haj. The funds will be

transferred by the Haj committee and the Bank in turn will generate the drafts and provide the drafts

to the Haj Committee.

5. Day End Screening: The complete customer database in FES will be part of the day end screening

process of the Bank. Any true hits in the screening process will be escalated to the FES Head.

6. Date of Birth: The date of birth of all clients will be captured on the FES application to facilitate the

alert handling process.

7. User Guidelines: User guidelines for screening through Compliance Enquirer can be seen in

Annexure 2.

8. Remittances screening: In case of all types of remittances made by the bank, compliance screening

must be done for both applicant as well as beneficiary by staff handling FES transactions

9. Influencing Agent Screening: Before transacting with influencing agents and creating the master

code in FES System, FES CPU shall screen all requests from FES Sales staff on Compliance

Enquirer.

CRITICAL POINTS TO NOTE

• No deals to be done where countries categorized as Ultra High Risk Countries (UHRC) are involved.

IVBL’s High Risk Country Policy prohibits transactions with Cuba, Iran, Myanmar, North Korea,

Sudan and Syria.

• All customers to be screened on compliance enquirer and necessary KYC documentation to be

obtained. Screenshots to be maintained along with documentation.

• Photocopies of all original documents to be stamped “Originals Seen and Verified” and initialed by

branch staff.

• All FES related documentation should be retained by the branch permanently.

RSC RATE APPROVAL PROCESS

Branch cannot input deals for transaction equal to or above USD 5000 or equivalent. Further they will have

to contact RSC for rates beyond their approval limits.

• RSC to receive the phone request followed up by mail request from the branch for fine rates beyond

branch powers.

• If rate falls within RSC's band, RSC to provide rate to the branch

• If rate does not fall within RSC’s band, RSC to obtain approval from concerned authority per

approval grids on mail.

• Each RSC can input deals in CREDENCE for all the branches in his/her region. RSC will input deal

in system according to rate offered to the branch within their rate bands. Branch can pick up the deal

and utilize the same at their end.

• Revert to BH on the rate which has been given/confirmed over phone. Ensure that all approvals are

marked to BH and approvals email id so that branch has a record of the same to meet audit

requirements. RSC to inform branches that rates may vary depending on market movements

MODE OF PAYMENT PROCESS

Branches may receive payment for foreign exchange sales in the following modes:

Cash: Payment can be accepted by cash for transactions less than USD 1000

• CCM to generate payment voucher in triplicate

• CCM to direct customer to make INR payment at the teller counter

• CCM to handover payment voucher in duplicate to the teller with details of INR amount to be

deposited

• One voucher to be retained with CCM for records

• Teller will receive payment from the customer as per details mentioned in the voucher

• Teller to stamp and sign the customer copy of voucher and handover the same to the customer

• CCM to check in Profile whether payment has been received

• Handover foreign currency as per requirement post release of payment

Account Debit: Where customer has an Capital Local Area Bank account,

• CCM to debit required amount in Profile from the customer’s account

• CCM to check in FES Suspense account whether payment has been received

• Handover foreign currency as per requirement post release of payment

Other bank DD/cheque: Large portion of FES clients would be non-constituents of the Bank and the best

way to receive payments from them would be in the form of DDs as verification with the issuing bank is

easy. However, the risk of the DD being stolen or forged still remains. To mitigate this risk, verification with

the Issuing Bank is essential for high value DDs.

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

Delegation of Powers(DOP)

DOP for One-Off Cheque Purchase

Generally, cheque purchase will not be permitted for non-constituent customers of the Bank. Depending on

the Net Worth and social standing of the individual, one-off cases can be permitted by Head-FES and Head-

CA-RB jointly. This should be an exception rather than a regular occurrence, as RBI restricts cheque

purchase for non-constituents. For existing Customers (SB, CA, OD account holders of the Bank), one-off

cheque purchase is permitted and shall be done subject to the guidelines of the Bank.

Rules for DD purchase

• If there were any issues in the past in purchase and realization of DDs issued from some Bank, the

same should not be purchased without permission of Head-FES.

• DDs of ALL Co-operative Banks shall not be purchased.

• Only local DDs will be purchased. Out-station DDs will be taken only subject to realization.

• DDs that are beyond the value of Rs.50 Lakhs shall not be purchased. They will have to go for

collection.

Rules for Cheque Purchase

• Out-station cheques will not be purchased.

• Repetitive purchases will not be entertained for the same Customer. It would be only on collection

basis.

• For cheque purchase of individuals, CIBIL check has to be conducted.

Process for DD Purchase

• When a DD is received from a Customer desiring to buy Foreign Currency or Travelers’ Cheque or

Pre-paid cards or Foreign Currency DDs (FCY-DD) or Telegraphic Transfers (TTs) the following

process has to be followed:

o Basic information is fed into Credence (Passport number, Name and Address) and checked as

to whether the DD amount is within caps stipulated by RBI Guidelines for travel, education,

Amount of

purchased

Rs. Lakhs

DD

in Verification (Call back) by Approval Authority

Up to 2 No verification required BOSH

>2 up to 5 BOSH Branch Head

>5 up to 10 BOSH ROSH/ Regional Sales Manager- FES

>10 up to 50 BOSH NOSH/ Head FES

etc. If it is beyond the caps, the Sale cannot proceed. If it is within the caps, further

processing happens.

o The DD Verification and DD Purchase Authorization form is filled after verifying the

Passport details, conducting a telephonic verification with the DD Issuing Bank. It is

forwarded to the Appropriate Authority as per the Grid for approval.

o Once Approval is received from the Approval Authority over Mail, the same is printed and

filed along with the documents collected and the remaining details are entered into Credence

as an “Ad hoc Transaction”.

o The necessary Accounting Entries are passed by Credence and on a daily basis such entries

move to Profile at GL level.

o All DD Purchased to be recorded in the DD purchased register and followed up for recovery.

Process for Cheque Purchase

Cheque purchase authorities will be same as that existing for clients. However, this will be only for existing

clients of the Bank. Purchase will be done only after ascertaining the balance in the account.

KYC/ AML Compliance

KYC /AML compliance should be ensured as per the Bank’s Policy as well as RBI directives. As Customers

from whom DD/ Cheque is being purchased is not a constituent of the Bank, extra care has to be taken as the

comforts of the regular KYC compliance checks are not available.

The Passport is an important document for ensuring KYC/AML compliance. Thus, through verification of

the Passport has to be ensured. The Profile of the Customer has to be prepared and scrutinized. The

information sought should relate to his identity, source of funds, social / financial status, nature of business

activity, etc. The information sought from the Customer should cover only information that is relevant to the

risk category of the Customer. The nature and extent of “Due Diligence “ will depend on the risk perceived

by the Bank. Well known, high Net Worth individuals can be categorized as “Low Risk” and due diligence

need not be so rigorous.

FOREIGN EXCHANGE PURCHASE

WALK –IN – CLIENTS ELIGIBILTY

• Any Indian Resident

• Foreign Nationals/Tourists

• Non Resident Indian

Guidelines for retail foreign exchange encashment

1. For encashment of foreign currency notes and/or Travelers Cheques up to USD 500 or its equivalent,

production of passport need not be insisted upon and any other suitable document of identification

like ration card, driving license etc. can also be accepted.

2. For verification of the identity of customer for encashment in excess of USD 500 or its equivalent, a

photo identity document such as passport, driving license, PAN Card, voter identity card issued by

the Election Commission, etc. should be obtained.

3. Requests for payment of sale proceeds in cash may be acceded to the extent of USD 1000 or its

equivalent per transaction. Requests for payment in cash by foreign visitors / Non-Resident Indians

may be acceded to the extent of US $ 3000 or its equivalent. All encashment within one calendar

month may be treated as single transaction for the purpose. In all other cases the payment should be

made by way of "Account Payee" cheques / demand draft only.

4. Where the amount of forex tendered for encashment by a non-resident or a person returning from

abroad exceeds the prescribed limit of USD 10000 (Both Currency and TCs together) or cash

currency beyond USD 5000 equivalent production of Currency Declaration Form (CDF) should

invariably be insisted.

In case of foreign exchange purchases the following precautions should be taken:

• Foreign currency bank notes and / or TCs beyond USD 10000 should not be accepted unless

accompanied by currency declaration form that is duly stamped by customs at the airport. Coins will not

be accepted.

• Currency Declaration Forms should be endorsed and returned back to client, if the balance amount in the

CDF is nil then the CDF should be retained.

• It should be ensured that TCs are purchased on the basis of Watch & Compare i.e. the customer must

sign TCs in the presence of Bank Officer. The original and counter signatures should invariably match

with each other as also with passport and purchase agreement form.

• TC encashment requires signatures duly checked with original counter signatures on TCs plus those on

the passport. In cases of doubt or while encashing large amounts counter teller must ask for purchase

agreement form.

• Authorization should be taken from the issuer of TCs. This Facility is available with AMEX, In case of

Master & Visa since VISA / MASTER that no longer issue TCs, more care is required and where ever

in doubt, TCs encashment should be taken on collection basis.

• Check for the authenticity that bank notes are not counterfeit, mutilated or de-monetized

• Lodge the transaction in the system and handover the Encashment Certificate (Bordeaux) to the client.

• In case of NRIs the encashment certificate to be super scribed “Not to be deposited in NRE a/c”.

• Encashment certificate to be issued in all cases, whether asked for or not. Passport number, nationality,

reason for encashment, to be noted on Encashment Certificate.

• The Encashment Certificate to contain a declaration to be signed by the client that he/she is surrendering

the unutilized portion of foreign exchange is with in period of sixty day from the date of its purchase.

• The signatures of the beneficiary to be taken on encashment certificate & in case of NRIs /foreign

nationals, the local address also to be noted on the encashment certificate.

KYC FOR ENCASHMENT

Identification Documents for Purchase of Foreign Currency Notes & Travelers Cheques

Documents for Identification of Customers

Amount Less than US $200 or equivalent Between US $200 to US $

2000 or equivalent

Above US $ 2000 or

equivalent

Identificati

on

Documents

Required

Photocopies of the Identification

document need not be kept on

record. However, full details of the

identification document should be

maintained in a separate register /

system.

Photocopies of the

identification document

should be maintained for one

year and completion of

statutory audit.

Photocopies of the

identification document

should be maintained for a

minimum period of five

years.

Limits for Encashment of Foreign Currency Notes/ Travelers Cheques

Sale Proceeds Payment To

Indian Resident

Foreign Visitors/ NRI's

Cash Proceeds / Cheque Payments

• Cash may be acceded to the

extent of USD 1000 or its

equivalent per transaction.

Amounts higher than Rs. 50000

• Cash may be acceded to the

extent of US $ 3000 or its

equivalent. Payments for Any

amount higher than that should

Encashment Amount for FCN/TC's Up to US $ 500 or equivalent Excess of US $ 500 or equivalent

Identification Documents Production of passport need not be

insisted upon and any other suitable

document of identification like

ration card, driving license etc. can

also be accepted.

Photo identity document such as

passport, driving license, PAN

Card, voter identity card issued

by the Election Commission, etc.

should be obtained.

Sale Proceeds Payment To

Indian Resident

Foreign Visitors/ NRI's

should be paid by credit to

clients account/ issuance of a

DD/BC.

• All encashment within one

month may be treated as single

transaction for the purpose.

• In all other cases the payment

should be made by way of

"Account Payee" cheque,

demand draft or credit to the

clients account maintained with

our bank.

be made by DD/BC or credit

to the client’s account.

• All encashment within one

month may be treated as single

transaction for the purpose .

• In all other cases the payment

should be made by way of

"Account Payee" cheque,

demand draft or credit to the

clients account maintained

with our bank.

• Where the amount of forex

tendered for encashment by a

non-resident or a person

returning from abroad exceeds

the limits prescribed for

Currency Declaration Form

(CDF), production of CDF

should invariably be insisted.

RATE APPLICABLE

1. Rates to be applied shall be as per the card rates, Fine rates will be offered as approval grid.

2. PAYMENT MODE

• For Indian National – Up to Rs. 50000 in cash, in case of the amount is higher than the entire amount by

way of bankers Cheques/ DD/ Credit to his account maintained with us/RTGS to other bank accounts

• For foreign nationals / NRIs - INR cash can be paid for encashment up to USD 3000, any amount higher

than that should be paid by way of bankers Cheques/ DD.

Purchase – Authorized MONEY CHANGERS (AMCs) AND BANK

Authorized Money Changers (AMCs) AND BANK.

1. FFMCs- Full Fledged Money Changers

2. Franchisee – Franchises of Capital Local Area Bank authorized to carry out Restricted Money

Changing Activities

3. Franchises of Others – Franchises of other Banks and FFMCs authorized to carry out Restricted

Money Changing Activities

4. Authorized Dealer – Banks.

5. Restricted Authorized Dealers- Wall Street Finance, Thomas Cook, Centrium Forex.

Client (FFMCs / Banks / Hotels only) Empanelment Formalities

• Dealing with client should be subject to completion of Know Your Customer (KYC)

formats/undertaking. .

• KYC of all FFMCs & Franchises of Other FFMC & Banks have to be done at branch level and is the

responsibility of the relationship executive and the branch head / Regional Sale Manager to get all KYC

formalities completed for each client. All KYC documents sit at respective branches and in branch

manager’s custody.

• As per the new KYC guidelines, the stress will be more on our internal assessments based on license

verifications, analysis of client's dealings and market reputation. In cases of clients that are exchange

companies, all efforts should be made for them to have account relation with our bank, however should

not be treated as pre condition.

Procedure for purchase of Banknotes from exchange companies (EC) and Banks (ADs) at the branch

counters

1. Currency can be accepted from only from approved ECs and ADs; normally coins will not be

accepted.

2. Usually exchange companies send their representative to our designated branches while our Sales

staff reaches out to other banks (ADs) for purchase of currencies.

3. The exchange companies from whom we would buy currencies would be empanelled by us and

signatories of their authorized representatives held on record

4. The executive of client (ECs) that comes to deliver currencies should be in the list of authorized

signatories furnished by the Client.

5. Currency should be accepted & counted in front of the client.

6. Check for the authenticity of bank notes for counterfeit, etc

7. Soiled, torn or demonetized bank notes in permissible currencies can be accepted only after

confirmation from the RSM who would seek such confirmation from export centre or taken in

collection.

8. The export centre will ensure that each soiled, torn or demonetized note is confirmed to be

acceptable to the overseas counterparty before accepting the note and quoting a rate.

9. Physical currencies should tally with the currencies mentioned in the Encashment certificate of the

client.

10. Rate for ECs and ADs – these are not card rates but driven by rate grids for wholesale purchases

11. Once the currencies are counted & Rates are fixed, purchase memo should be made through front

office software and handed over to the client.

12. Our counter executive should sign on the purchase memo and also on the client’s sales memo and

stamp the same.

13. Clients sales memo should be signed by the offloading client’s authorized executives and stamped.

14. In case of a currency / TC purchases from a Bank or a hotel where our bureau staff has to move out

of branch, he / she must obtain signature and stamp on bank’s manual purchase memo from

authorized signatory of the client.

15. All such manual bills should be entered into the front system immediately upon return to office.

Bureau In charge has to then ensure that our bank’s manual purchase memo is attached with the

computerized purchase.

FOREIGN EXCHANGE SALES

1. PERSONAL / LEISURE VISIT

Product: Bank Notes, Travelers’ cheques and Forex Travel Card

Eligibility

• Resident Indian Nationals.

• Foreign Nationals permanently residing in India are also eligible to avail this quota provided the

applicant is not availing of facilities for remittance of his/her salary, savings etc. abroad in terms of

the existing FEMA regulations.

• Foreign born wife of an Indian national.

• Children endorsed on parent’s passport are also eligible for full entitlement.

Quantum of exchange

• Up to a total of US$ 10,000 or its equivalent per resident individual in a financial year of which

maximum of US$ 3,000 in Currency notes per visit and rest in Travelers cheques / Travel card for all

the countries except for travel to Iraq, Libya, Islamic Republic of Iran, Russian Federation and other

Republics of Commonwealth of Independent States. Individuals traveling to countries like Nepal &

Bhutan are not eligible to withdraw foreign exchange under this scheme.

• For Travelers proceeding to Iraq or Libya, foreign exchange in the form of currency notes may be

sold up to limit not exceeding US$ 5,000 or its equivalent per resident individual in a financial year.

• For Travelers proceeding to the, Russian Federation and other Republics of Commonwealth of

Independent States, entire foreign exchange can be released in the form of currency notes.

• Travelers proceeding to Pakistan, Bangladesh by land route are eligible up to limit of US$ 10,000 of

foreign exchange or its equivalent per resident individual in a financial year.

• Foreign exchange quota for personal visit can be availed over and above the specified amount under

all other schemes for release of foreign exchange.

Rates Application:

Deals greater than or equal to USD 5000 or equivalent cannot be inputted by the branch and must be

inputted by the Regional Sales Coordinator. FES System (Credence) will not allow branches to input the

same. Branches need to pull the deal inputted by the RSC and utilize the same at their end.

• Rates to be applied shall be as per the card rates. Card rates will be provided to all branches on a

daily basis by the treasury.

• Card rates may change and treasury will update branches with fresh rates.

• In case of fine rates, approval to be taken in accordance of approval grid.

• For rate requests falling within the branch’s powers, branch may offer better rates to the customer

• These powers have to be exercised by the branch judiciously depending on the relationship of

customers.

• Branch has to ensure that for all improvements in exchange rates within their authority are done with

proper approval as per the grid and kept on record. Annexure 1 – Approval Grids

• For rate requests that fall above the branch grids, branch to refer the same to their respective

Regional Sales Coordinator(RSC)

• Branch CCM to keep customer informed that the rates mentioned are purely indicative and are

subject to intraday changes based on changes in market levels

• Post confirmation received from RSC, branches can utilize deal inputted by RSC in FES system to

close at their end.

2. BUSINESS VISIT

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

Eligibility

• International business travel sponsored by firms/companies/organization in India.

• Participation in International conferences / seminars which are of a scientific, technical or

educational nature.

• Specialized training/study tour sponsored by institutions or undertaken by professionals like Doctors.

Rates Application:







customers.


proper approval as per the grid and kept on record.






close at their end.

Quantum of Exchange

• Up to US$ 25,000 per business trip, irrespective of period of stay and number of times in a financial

year. Release of foreign exchange beyond US$ 25,000 for a single business visit requires prior

approval of RBI.

• Foreign Exchange may also be released to foreign nationals if the visit is sponsored by the company/

firm/organization in India where they are employed on regular basis.

• If a passenger plans to club both Conference and business visit together, the entitlement remains only

up to a maximum of US$ 25,000.

• Personal Visit entitlement can be availed over and above the specified amount under this scheme.

Rates Application:










customers.








close at their end.

3. IMMIGRATION

Product: Bank Notes, Traveler Cheques, Forex Travel Cards, Telegraphic Transfer and Demand

Draft

Eligibility

• Resident Indian proceeding for permanent immigration abroad.

Rates Application:







customers.


proper approval as per the grid and kept on record.






close at their end.

Quantum of Exchange

• Up to US$ 100,000 per person or the amount prescribed by the country of emigration, subject to

production of documentary evidence in support.

• For drawing exchange beyond this amount, prior approval of RBI required.

• Personal Visit can be availed over and above the specified amount under this scheme.

4. EMPLOYMENT


Draft.

Eligibility

• Resident Indians going abroad for employment.

Quantum of Exchange

• Up to US$ 100,000 per person going abroad for employment.

• For drawing exchange beyond this amount, prior approval of RBI is required.

• Personal Visit can be availed over and above the specified amount under this scheme.

Rates Application:










customers.








close at their end.

5. STUDIES ABROAD


Draft.

Eligibility

• Resident Indian going abroad for studies.

• Students holding Indian passports, who had earlier gone abroad for pursuing studies without availing

of exchange, can avail foreign exchange for the balance period of the course.

• Students holding foreign passports dependent on their parent’s resident in India.

Quantum Of Exchange:

• US$ 100,000 per annum towards tuition fees, maintenance expenses books, etc. Foreign Exchange in

excess of US$ 100,000 (at actual) per academic year may be released to the extent of the requirement

of foreign exchange indicated in the letter from the overseas institution/university.

• Foreign Exchange may be released in the form of currency notes not exceeding US$ 3,000 and

balance amount may be released in the form of Prepaid Forex Travel Card, Traveler’s

Cheques/Demand Draft/TT in favor of the student or the educational institution, as directed by the

applicant.

• Students going to Russia to other CIS countries, foreign exchange may be released in the form of

currency notes for a period up to one year.


Rates Application:










customers.








close at their end.

6. MEDICAL


Draft.

Eligibility

• Resident Indian going abroad for Medical Treatment /Check Up.

• Must be suffering from an ailment requiring specialized treatment abroad.

• Resident Indian fallen sick after proceeding abroad.

• Accompanying as attendant.

Quantum of Exchange

For patient

• Hospitalization – Up to US$ 100,000 its equivalent for the patient going abroad for medical

treatment or check up abroad.

For the attendant

• Up to US$ 25,000 for accompanying as attendant to a patient going abroad for medical

treatment/check up. Personal Visit entitlement can be availed over and above the specified amount

under this scheme. For release of foreign exchange for meeting expenses for medical treatment

/check up abroad exceeding US$ 100,000, prior approval of RBI is required.

Rates Application:










customers.








close at their end.

7. GOVERNMENT OFFICIALS

Eligibility

• Member of Parliament / State Legislatures with Letter of sanction in original from Ministry of

Finance, (Department of Economic affairs).

• Official of Central / any State Government with Letter of sanction in original from Administrative

Ministry of Government of India (Central Government Employee).

• Members of Official / non – official delegations financed out of central fund / state government with

letter of sanction in original from Government of India (In case of Official of State government,

Members of Parliament and State Legislature).

• Official in the office of Comptroller and Auditor General (C&AG) of India deputed abroad with

Letter of sanction in original from C & AG office.

Quantum of Exchange

• Up to US$ 25,000 per business trip, irrespective of periods of stay and number of times in a financial

year.


Rates Application:










customers.








close at their end.

8. MAINTENANCE OF CLOSE RELATIVES ABROAD

Product: Telegraphic Transfer and Demand Draft.

Eligibility

• Resident Indian sending remittance for maintenance of his/ her close relative abroad.

• Resident Indian * but not permanently residing in India sending remittance for maintenance of his/

her close relative abroad.

• Any individual resident in India on account of his employment or deputation of a specified duration

(irrespective of length thereof) or for a specific job or assignment, the duration of which does not

exceed three years, is a resident Indian but not a permanent resident.

Quantum of Exchange

• Up to US$ 100,000 per remitter / applicant per annum.

• For drawing exchange beyond this amount, prior approval of RBI is required.

Rates Application:










customers.








close at their end.

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

Product: Bank Notes

Background

• Often, foreign ships travel through India and dock their vessels at various ports / harbors in the

country.

• One of the major requirements during such temporary stays is of Foreign Currency Notes that has to

be made available to the Captain of the Ship for covering crew wages or for other expenses on board.

• These requirements are usually met through a facility called "Cash to Master".

• To collect this cash, the master of the ship has to either approach the FES location or Foreign

exchange gets delivered by FES staff at the designated port.

• Beneficiary master has to submit copy of his passport and a duly filled up application form to avail

the CTM amount.

• This product is available only in United States Dollars, Pounds Sterling and Euro.

Transaction process Cash To Masters Transactions (CTM)

• Shipping Companies worldwide operate through their agents at respective ports.

• These shipping agents are the one which handle all requirements of the vessel at respective ports

including the requirement of the vessel for foreign exchange.

• In order to deliver banknotes to the Master of the vessel, we first need to get a credit in our nostro for

the amount of Foreign Exchange to be delivered plus the service charges.

• FES provides nostro details to the Indian Shipping agency that in turn deals with the parent company

of the vessel and arranges to get the credit in our nostro along with the identification details of the

master.

• The amount of credit to be received is based on actual amount to be delivered plus the commission to

be charged on the deal.

• The Overseas shipping company credits our nostro account and sends a SWIFT message (MT 103)

copy to Indian Shipping Company which in turn forwards it to the designated FES location.

• On receipt of the SWIFT advice FES over mail informs the credits in the designated USD Nostro a/c

to the concerned department of IVBL, who in-turn confirms the receipt of the actual funds from the

overseas shipping company.

• FES location over mail confirms Indian Shipping company about the receipt of the inward credit and

re-confirms them about the FES charges and actual CTM amount to be delivered.

• Indian Shipping agency over mail advice FES location about the CTM delivery details such as

o Master Name,

o Passport number,

o Port of delivery,

o Ship/ vessel name,

o Delivery time and date.

• FES verifies / matches the beneficiary details given by the Indian shipping company with the details

mentioned in the SWIFT advice sent by the overseas shipping company.

• Designated FES location enters the CTM transaction in Credence and generates bill from credence.

• FES coordinates the delivery with the regional Indian Shipping company office and reaches the port

for CTM delivery.

• FES staff personally meets the beneficiary master and verifies his identity through his original

passport which must match with the beneficiary details mentioned in the inward MT 103 message

copy.

• FES staff hand over the CTM amount to the master of the ship and take the receipt signature on the

cash memo and passport photocopy. Original copy of the cash memo is handed over to the master.

• Following additional documents are taken from the Master of the ship

o Request letter from master of the ship with the seal of the ship.

o Form A2 signed by master of the ship.

KYC Guidelines

• Indian shipping agency to provide the SWIFT message (MT103) of the amount remitted by the

foreign shipping agency.

• CTM amount & delivery details to be furnished by Indian Shipping Agency over mail.

• At the time of CTM delivery, master of the ship shall be required to show the original valid passport

which must match with the details mentioned in the MT 103 copy sent by the overseas shipping

company.

• FES staff to keep masters passport photocopy (undertaking on documents verified to be done by the

concerned FES staff) for necessary records.

• FES staff to collect Ship Master’s signature on cash memo.

10. REMITTANCES FOR TOUR ARRANGEMENTS, ETC. (AT THE REQ UEST OF THE

TRAVELER)

Eligibility

Individuals traveling abroad on personal /Leisure visit or business visit can remit upto a reasonable limit

towards his hotel accommodation, tour arrangements, etc. in the countries proposed to be visited by him,

provided it is out of foreign exchange purchased by the traveler out of the limits prescribed as per FEMA

guidelines (including foreign exchange drawn for private travel abroad).

Quantum of exchange

The amount remitted should be net of commission / mark up due to the Indian agent, since quantum of

exchange is not specified in the RBI circular

Receipt of Payments

• All the payments for release of foreign exchange should be received in advance. In case of cheques

acceptance, exchange to be released after cheque realization.

• Payments for release of foreign exchange up to Rs. 50,000 or its equivalent can be received in cash.

When foreign exchange is drawn on more than one occasion within one month for a single

journey/visit should be treated as single transaction, the aggregate of rupee equivalent of foreign

exchange drawn on different occasions for the single journey/visit should not exceed Rs.50,000 if

cash is to be accepted.

• Wherever the rupee equivalent exceeds Rs 50,000, the entire payment is to be accepted in advance

and should be drawn from the bank a/c of the applicant. Payments could be accepted by way of

Cheque, Pay order, Demand Draft, RTGS, NEFT.

• In case of release of foreign exchange against acceptance of drafts/pay orders, approval from the

competent authority as per draft acceptance guidelines should be held on records.

11. REMITTANCES FOR TOUR ARRANGEMENTS, ETC. (AT THE REQ UEST OF THE

AGENT)

Eligibility

Agents in India, having a good track record and satisfying all KYC norms, having tie up arrangements with

hotels/agents, etc., abroad for providing hotel accommodation or making other tour arrangements for

travelers from India, provided the remittance is made out of foreign exchange purchased by the concerned

traveler from us or from an authorized person out of the limits prescribed as per FEMA guidelines

(including exchange drawn for private travel abroad).

Quantum of exchange

Amount as per the invoice of the overseas hotels/agent within the prescribed limits of personal / business

visit foreign exchange quota.

Receipt of Payments

1. The remittance is to be made only to the debit of foreign currency account in the name of the agent

with us, which can be opened for this purpose with any of our AD branch.

2. DD in FC issued from the foreign currency account in the name of the agent maintained with other

ADs along with a certificate issued by the AD certifying that the amt is debited to the FC account of the

agent.

3. Debit of Current a/c of the agent with us.

4. Crossed cheque drawn on applicant’s bank account,

5. Pay order /Demand Draft issued from the applicant’s bank a/c

6. RTGS/NEFT transfer from applicant’s bank a/c

12. REMITTANCES UNDER LIBERALIZED REMITTANCE SCHEME

Eligibility

• All Resident Individuals are eligible to avail the facility under the scheme.

• The facility will not be available to corporate, partnership firms, HUF, Trusts, etc.

Quantum of exchange

• USD 200,000.

• The facility will be per financial year basis (April-March) for any current or capital account

transactions or a combination of both. Investment by resident individual in overseas companies

would be sub-summed under the Scheme of USD 200,000.

• Limit of USD 200,000 under the Scheme would also include remittances towards Gift and donation

by a resident individual.

Purpose

• This facility is available for making remittance up to USD 200,000 per financial year basis (April-

March) for any current or capital account transactions or a combination of both.

• Under this facility, resident individuals will be free to acquire and hold immovable property or shares

or any other asset outside India and will also be able to open and maintain and hold foreign currency

accounts with a bank outside India for making remittances under the scheme. The foreign currency

account may be used for putting through all transactions connected with or arising from remittances

eligible under this scheme.

• Gift

• Donation

13. OTHERS

a. Period of surrender of foreign exchange

In case the foreign exchange purchased for a specific purpose is not utilized for that purpose it could be

utilized for any other eligible purpose for which drawl of foreign exchange is permitted. The unutilized

portion of foreign exchange is required to be surrendered to Bank within period of 180 day from the date of

its purchase.

1. Unspent Foreign Exchange

Unspent foreign exchange brought back to India by a traveler should be surrendered within 180 days from

the date of return of the traveler, if the unspent foreign exchange is in the form of currency notes. If such

foreign exchange is in the form of traveler’s cheques, the same should be surrendered to an authorized

person within 180 days from the date of return.

The traveler can utilize foreign Exchange brought back for his subsequent visit abroad during the period

specified above. However, a returning traveler is also permitted to retain with him, foreign currency

traveler’s cheques and currency notes up to an aggregate amount of USD 2000 and foreign coins without

any ceiling. The traveler can utilize foreign exchange so retained, for his subsequent visit abroad.

14. REMITTANCES FOR RESTRICTED AUTHORIZED DEALERS (AD I I)

As per RBI Circular No. AP/DIR/Circular No. 25 dated 06.03.2006, some FFMC’s have been granted

Authorized Dealer-Category II (Restricted Authorized Dealers) license. AD II category license holders are

not permitted to open a nostro account in their name, RBI has allowed them to enter into business

arrangements with the banks to facilitate issuance of Foreign Currency Drafts, TT services.

Objective

The objective of the business arrangement with the AD II is to provide easier foreign exchange services to

the customer, by enlarging the network of money changing facilities especially for DD & TT services.

Forex transactions allowed under AD II category are:-

1. Private Visits

2. Remittance by tour operators / travel agents etc.

3. Business travel

4. Fee for participation in global conferences

5. Film shooting

6. Remittance for participation in international events / competitions

7. Medical Treatment abroad

8. Disbursement of Crew wages

9. Overseas Education

10. Remittance under educational tie up arrangements with universities

11. Remittance towards exam fees

12. Employment and processing, assessment fees for intending migrants

13. Emigration

14. Visa fees.

KYC / RBI inspection/Audit

1. As per the Circular, for ADs-Category II RBI reserves the right to inspect them when considered

necessary. RBI also requires a special audit of AD-Category II, depending on the nature of the

transactions by an auditor from the approved list of RBI / ICAI.

2. KYC and Anti-Money Laundering norms prescribed for FFMC's will be applicable to AD-

Category II also.

3. These transactions are processed on a request letter from the AD-II mentioning the applicant

name, remitter, complete beneficiary details & also certifying the KYC norms with regard to the

applicant are complied with. The documents submitted by the applicants are retained by the AD

II only. The AD-II customers are also required to submit 5 % of the documents to the bank on a

random basis for audit purpose.

Process for AD II category transactions

• Sales Staff shall identify the AD II category client. Commercial to such client will fall under the

delegated commission grid of Regional Sales Manager, Head – FES.

• While sending the AD II commercial recommendation to Head FES / RSM , RSC is required to send

the cost benefit analysis on the business arrangement covering the various aspect like expected gross

income, expenses and net revenue to be earned.

• Commercial approvals from Head FES/RSM to be kept in FES records.

• While submitting the commercials to AD II customer, FES Sale staff must ensure to take their AD II

category license issued by RBI. Copy of the commercial offer duly signed and accepted by the AD II

& their license to be kept in the concerned department’s record.

• Copy of the commercial arrangements & ADII license shall be submitted to the RSC in charge.

• AD II shall approach the designated FES location for foreign exchange transaction and submit the

required documentation to CCM.

• AD II customer shall submit the declaration cum undertaking on their company letter head giving

applicant name & complete beneficiary detail.

• Accepted mode of payment for such transaction will be through a/c debit /RTGS/NEFT/DD/Pay-

Order from ADII’s a/c, Cheque drawn from ADII’s bank a/c.

• For payments by way of cheque for release of foreign exchange would be effected after realization of

the cheque.

• After verifying all necessary documentation & receipt of payment from AD II, FES shall process the

transaction & hand over the foreign draft / TT advice to the authorized staff of AD II. Traveler’s

cheques can only be issued by CCM staff in the presence of the customer only.

Documentation required for the transactions under AD II category

• AD-II shall submit an application form with details and also confirming customers KYC compliance

for affecting the remittance.

• Covering letter from the AD II providing the applicant name, complete beneficiary details & also

certifying the KYC norms are complied with..

• Form A2 cum FEMA Declaration duly signed by the AD II.

• Payment needs to be collected by way of RTGS/NEFT/DD/Pay-Order/cheque drawn from the AD

II’s bank a/c (In case of cheque, remittance need to be effected after cheque realization).

• AD-II customer to submit 5 % of the transaction documents to the bank on a random basis for audit

purpose.

KYC Compliance

Important Points to be Noted:

• Agreement with AD II should mention clearly that the AD II would be responsible for KYC and

establishing bonafides of the transactions being put through. It would be the responsibility of the AD

II for monitoring / reporting of suspicious transaction to Financial Intelligence Unit (FIU).

• All AD II Fx arrangements should be approved by RSM / Head FES.

• Covering letter from the AD II on company letter head providing the complete applicant / remitter

and beneficiary details & also certifying the KYC norms are complied with.

• AD II customer to submit the AD II category license given by RBI.

• Payment for the transaction to be made from the bank account of AD II.

Transfer between the Branches (intercity)

• BOSH should plan the transfer between the branches with FES Sales staff in consultation with the FES

Dealing Room.

• Branch to branch transfer of stock to happen in FES system

• No other persons other than the ones mentioned above should be aware / told / talked to about the

transfers.

• Counter staff must carry a banks valid ID while transferring currencies. All Transfers should be

accompanied by following documents:

o Packing List

o Branch Head to authorized branch executive to carry currencies between the branches on

banks letter head duly attesting his /her signatures.

o Authorized executive to record his movement details in movement register before leaving the

branch premises.

o BOSH should finalize the route of transfer; a routine route should be altered on regular basis

for security reasons.

Records Keeping:

1. All the purchase /sale cash memos should be filed, day wise in seriatim.

2. All the documents regarding the retail sales cases should be filled day wise in seriatim on case to case

basis and the BOSH have to ensure that the documentation for all the retail cases should be complete, the

moment the case is processed in the system.

3. The empanelment business forms/KYC formats; valid RBI license copy should be on record before the

initialization of foreign exchange business with any FFMC/RMCs/ Franchisees.

4. All these empanelment business forms/KYC formats, valid license copy and the declarations cum

indemnities should be filed properly.

5.A database on list of FFMCs/RMCs/ Franchisees addresses that our Bank is currently dealing with along

with list of their authorized dealing persons and expiry dates of their licenses should be kept on record.

6. A list of authorized executives to deal in foreign exchange business with these FFMCs /RMCs

/franchisees / Banks duly approved is on record.

7. Permission to deal in foreign exchange /valid license copy to be kept on record and to be displayed in case

of offsite locations.

8. All records to be permanently retained at branch/CPU

APPOINTMENT OF INFLUENCING AGENTS AND INCENTIVE PAY OUT GRIDS

Introduction:

Scope of note:

� Appointment of Influencing agents

� Their Agent code creation in Credence system

� Processing of transactions referred by influencing agents

� Influencing Agent Commission Payout & Delegation Grid.

Background:

� An individual or business establishment which can refer foreign exchange business to our bank.

� The category of influencing agents shall be education / immigration consultants, travel agents / tours

operators, exchange companies – FFMCs/RADs, Franchisees, Franchises of other FFMCs, chartered

accountants, real estate agents, money transfer subagents, others etc.

Products:

Prepaid Forex Travel Card, Bank Notes, Travelers Cheques, Foreign Currency Demand Drafts, Telegraphic

Transfers.

Who can be an Influencing Agent?

� Individuals

� Proprietorship Firms

� Partnership Firms

� Private Limited Companies

� Public Limited Companies

Who cannot be an Influencing Agent?

� Defense / Weapons procurements;

� Gambling and Gaming companies, including casinos, and lottery operations;

� Individuals / organizations engaged in politics for financing political activities or to charitable

� Organizations whose main source of income is contributions from patrons overseas. (Exception

� to the donation income rule as above shall be educational / health institutions);

� Projects which may have negative socio economic impact (especially hydro projects which may

� displace original inhabitants);

� Projects which may lead to occupational / adverse environmental impact/health concerns

� (Especially corrosive chemicals, hazardous material disposal,);

� Projects which may have ecological impact such as destruction of wild life habitat (especially

� logging for paper, clearing forests for industry / commerce);

� Chit Funds

� For credit to companies for buy-back of their securities

� Towards advances to agents / intermediaries as considerations for deposit mobilization

� Production of Ozone depleting materials

� Bullion merchants or lending against bullion

� Ship breaking industry

� Financing Banned Articles -IVBL will not finance credit engagements/ transactions that involve

� Dealing with / against security of banned articles, possession of which is banned under Wild

� Life Protection Act, 1972

� Any activity, which is not encouraged by RBI.

Responsibilities of entity creation in Credence

Initiation of the Relationship Sales Manager, Area Manager,

Regional Sales Manager, Business Development Manager

Document Collection Sales Manager, Area Manager,

Regional Sales Manager, Business Development Manager

Document Verification Regional Sales Coordinator, Sales Manager.

Document handling CCM / BOSH /Branch Head

Entity Creation in Credence FES CPU

KYC Documents required for different entity type

• Individual

a. Identity Proof

b. Address Proof

c. Signature Proof

d. PAN Card

e. Code of Conduct

• Proprietorship Firms

a. Establishment Certificate

b. Business address Proof

c. Identified, Address & Signature Proof of Proprietor

d. PAN Card of Proprietor

e. Code of Conduct

• Partnership Firms

a. Establishment Certificate

b. Business Address Proof

c. Notarized Copy of Partnership Deep

d. List of All Partners

e. Identity Address & signature proofs of all partners

f. Consent Letter & Authorized Signatory list signed by competent authority for

entering into Influencing Agent agreement.

g. PAN Card of the firm

h. Code of Conduct

• Private / Public Limited Companies

a. Certificate of Incorporation

b. Certificate of commencement of business (Only in case of Public Ltd.

Companies).

c. Business Address Proof

d. Consent Letter & Authorized Signatory list signed competent authority for

entering into Influencing Agent agreement.

e. Memorandum of Associates (MOA)

f. Article of Association (AOA)

g. PAN Card of the company

h. Code of Conduct

CHECK LIST FOR EMPANELMENT OF INFLUENCING AGENT

A Details of Influencing Agent

1 Influencing Agent Name

Address

Contact Details

Pan Number

2 Influencing Agent

Constitution

Individual Proprietorship Partnership

Firm Private Limited

Public

Limited

Others (Pls

Specify)

3 ING-FES Location to be

mapped

4 ING-FES Sales Manager

Name to be mapped

B Influencing Agent Business Specifications

1 Current Business activity of

the Influencing Agent

2 Position in Areas

3 Class of Trade

4 In Business since

C Documents

1 Code of Conduct on the Influencing Agent letterhead signed by authorized

signatory Yes No

2 Consent Letter & Original authorized signatory list for entering into

Influencing Agent agreement signed & stamped by the top executive Yes No

3 Pan Card in the name of the firm. Form 49A & 60 will not be considered Yes No

4 Copy of commercial agreement signed & stamped by the authorized

signatory. Yes No

D Influencing Agent Details

1 A/c credit for Capital Local Area

account holders Yes No

2 Influencing Agent Account number

3 Issue drafts for Non Account holders Yes No

4 Issue pay order favoring for Non-

Account Holders

E Approval Process

1 FES- approvals for agents appointment as per policy Yes No

2 Issue pay order favoring for Non-Account Holders

Prepaid By Verified By

Name & Designation Name & Designation

Signature Date Signature Date

Please note all KYC Docs have to be self attested by Influencing Agent and OSV done by Bank

Staff with Stamp & Sign

Process of Appointment of an Influencing Agent

• Sales Team will approach influencing agent and brief about FES services of Capital Local Area

• FES Relationship Manager to initiate a new corporate has to first create a visit report and Profile

sheet with details of company, cost benefit analysis and obtain pricing approvals from Head - FES.

• Determine commercial terms with influencing agent through an arrangement letter as approved by

authority as per grid

• FES would also complete the KYC documents for one time master creation. Refer to attached KYC

document checklist above.

• Duly approved profile sheet would be then forwarded to CPU along with complete KYC documents

and duly accepted copy of offer letter for master creation in the Front office system. Before initiating

commercial agreement no business shall be accepted from the agent as referred business

• Create master and agent code in Credence based on details sent in the Profile sheet after verifying the

KYC documents sent. If there are any discrepancies the same will be referred to FES Sales

• Once master and agent code is created, the same will be communicated to FES Sales

• FES to communicate agent code to the respective agent for all future references

• FES Manager would deliver the commercial arrangement to the influencing agent and get the

acceptance of the principal / authorized signatory of the influencing agent on bank’s copy of offer

Process for transacting through an Influencing agent

• Influencing agent while referring clients shall inform the designated FES manager/RSC about the

transaction details including name of the client & forex required.

• The Agent code provided by the bank & company stamp must be endorsed on the FEMA Declaration

Form / Forex Plus application form to put the transaction under correct agent code. Agent shall

stamp the FEMA Declaration mention their agent code while forwarding the transaction

• RSC to verify the commercial terms for each influencing agent based on maintained register. The

register will have all details of the commercial agreement with various influencing agents signed off

by the Area Manager/Regional Sales Manager.

• Deals are booked by the RSC. RSC to book the same in the correct transaction code in CREDENCE.

In case the agent name is erroneously skipped while entering in front office system, then approval for

incentive payouts for that particular transaction need to be taken from Head - FES Operations. Hence

deals need to be inputted with care.

• All documents by the customer would be verified by the CCM. CCM would be responsible for KYC

/ AML of all transactions referred by the agent. Physical presence of the customer whether across our

bank counter or at the premises of the influencing agent is necessary for execution of the transactions

referred. Ensure that both applicant and beneficiary names are screened on compliance enquirer.

Following are the list of forms & documents required for executing any forex transactions referred:

o Form A2 & FEMA Declaration duly filled & signed by the customer.

o Valid Passport (for all travel related forex requirements) or valid Govt. issued photo identity

with address (for non-travel related remittances).

o Other transaction specific documents as prescribed by FEMA guidelines.

o Application form in case of Forex Travel Card.

• Mode of Payment

o All payments need to be drawn directly from customer’s account.

o Cash payments would be accepted up to Rs.50000/-

o All payments above Rs.50000/- should be made by way of RTGS/DD/PO drawn on Capital

Local Area Bank Ltd.

o In case of cheques, transaction would be effected after realization of the cheque.

• After verification of all the necessary documentation & receipt of payment, Capital Local Area Bank

Ltd. shall process the transaction. Capital Local Area Bank Ltd. reserves the right to reject the

transaction after verifying the documentation where bonafides of the customer are not adhering to the

prescribed guidelines.

• Deal inputted by RSC to be utilized in the system. In case of TT/DD, ensure that beneficiary details

including exact beneficiary name, beneficiary bank details, account number and

SWIFT/IBAN/SORT code is provided.

• Handover foreign exchange to the customer from stock box. In case of Traveler’s cheques, one

signature to be taken on TC at the time of issuance along with Purchase Agreement Form (PAF). In

case of travel card, application form with all details duly filled in to be obtained

Delegation for Incentive Payouts to Influencing Agents:

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

Approving Authorities Capital Local Area Net Exchange Margin

Retention over IBR

Area Manager Respective FCY IBR + 1%

Regional Sales Manager Respective FCY IBR+ 0.30%

Head of FES Beyond 0.30% retention on Respective FCY IBR

Format for agreement with influencing agent

Date

To

XYZ

Address

Sub- Commercial Proposal for Foreign Exchange Services

Dear Sir/Madam,

It was a pleasure to have met you and understand your foreign exchange requirements. We are very keen to

start business with your organization and are glad to extend commercial proposal to offer professional

Foreign Exchange Services. We have a dedicated forex team that is drawn from the best in the industry to

ensure you get the highest service standards that include door step service, customized MIS, dedicated

relationship executive etc.

Capital Local Area Ltd.

In addition, we are well on our way to being the market leaders becoming one stop super market for all

foreign exchange travel related payment gateways such as foreign currency notes, pre paid Forex travel

cards, travelers cheques, foreign demand drafts & telegraphic transfers in India.

Capital Local Area Bank Ltd. with a large network is best poised to offer Forex services in an efficient and

economical manner. We offer following services from our banks forex branches.

Selling Banknotes of over xx countries & all Major Travelers Cheques.

• Pre paid Forex Travel Card which is available in xx major currencies & is safe, convenient and smart

choice for your customers while they travel abroad.

• Foreign Drafts & Telegraphic Transfers available in over ---- currencies including USD, GBP,

EURO NZD, CAD, AUD, SGD, etc.

With our competent positioning & corresponding banking relations we are in the best position to offer you

the most competitive pricing.

Annexure I – Modus Operandi & Commercial offer

Commercial Offer:

All transactions with the clients referred by XYZ would be done on card rates prescribed by Capital Local

Area Bank Ltd. Any discounts offered would be deducted from the commission payable.

Product Applicable Charges Currency Applicable Rates

Demand Drafts

Telegraphic

Transfers

Rs.___+ Fx Conv Fee + Service

tax

Rs.___+ Fx Conv Fee + Service

tax

USD

GBP

EUR

AED, SAR

Other Currencies

IBR + __ paise.

IBR + __ paise.

IBR + __ paise.

IBR + __ paise.

IBR + __%

For all transactions referred by XYZ, the difference between IVBL applicable rates and the rate applied to

customer would be paid as commission to XYZ at the end of every month after deduction of applicable

TDS. The above mentioned charges levied shall be on non-sharing basis.

Commission Pay Out process

• Capital Local Area Bank Ltd. would provide a unique agent code to XYZ that needs to be quoted

in the forms while referring the customer.

• The office stamp of XYZ should be affixed on forms & copies of the documents or a mail should

be sent from the official email id of XYZ confirming the details of the transaction.

• At the end of every month, XYZ to provide on letter head the details of all referred transactions

to the designated Capital Local Area Bank branch in the prescribed format.

• After verification of the details, branch would make the commission payment by way of A/c

credit, PO/BC in the name of XYZ. Applicable TDS would be deducted from the commission

payment.

• This offer is valid up to ___________________________, however Capital Local Area Bank

Ltd. reserves the right to withdraw the arrangement at its discretion with one month prior notice.

• Capital Local Area Bank Ltd. also reserves the right to review / renew this arrangement after

expiry date.

It is agreed and declared between both the parties that the above mentioned terms and conditions are

accepted and signed thereof.

CHAPTER 3

REVIEW OF LITERATURE

LITERATURE REVIEW

Huang (2011) analyze that promotions is different form of activities for attracting and getting attention of

customer to purchase the product or service through personal selling, public relations, sales promotions and

advertising.

Kurniawan (2010) according to him promotion of product or service helps in the best way to builds

relationship with customers, because everyone is looking for the best suitable deal for them.

Solomon (2009) analyze that those who buy the goods or services provided by companies are customers. In

other words, a customer is a stakeholder of an organization who provides payment in exchange for the offer

provided to him by the organization with the aim of fulfilling a need and to maximize satisfaction.

Sometimes the term customer and consumer are confusing. A customer can be a consumer, but a consumer

may not necessarily be a customer. Another author explained this difference. I.e. a customer is the person

who does the buying of the products and the consumer is the person who ultimately consumes the product.

Kotler & Keller (2009) analyze when a consumer/customer is contented with either the product or services

it is termed satisfaction. Satisfaction can also be a person’s feelings of pleasure or disappointment that

results from comparing a product’s perceived performance or outcome with their expectations. As a matter

of fact, satisfaction could be the pleasure derived by someone from the consumption of goods or services

offered by another person or group of people; or it can be the state of being happy with a situation.

Satisfaction varies from one person to another because it is utility. “One man’s meal is another man’s

poison,” an old adage stated describing utility; thus highlighting the fact that it is sometimes very difficult to

satisfy everybody or to determine satisfaction among group of individuals.

Levy & NBRI (2009) studied that measuring customer satisfaction could be very difficult at times because

it is an attempt to measure human feelings. It was for this reason that some existing researcher presented that

“the simplest way to know how customers feel, and what they want is to ask them” this applied to the

informal measures.

Levy (2009) in his studies, suggested three ways of measuring customer satisfaction:

A survey where customer feedback can be transformed into measurable quantitative data: Focus group or

informal where discussions orchestrated by a trained moderator reveal what customers think. Informal

measures like reading blocs, talking directly to customers. Asking each and every customer is advantageous

in as much as the company will know everyone’s feelings, and disadvantageous because the company will

have to collect this information from each customer. The National Business Research Institute (NBRI)

suggested possible dimensions that one can use in measuring customer satisfaction, e.g.:

• Quality of service

• Innocently

• Speed of service

• pricing

• Complaints or problems

• Trust in your employees

• The closeness of the relationship with contacts in your firm

• Other types of services needed

• Your positioning in clients’ minds

Schiffman & Karun (2004) according to them Customer satisfaction is defined as the individual’s

perception of the performance of the products or services in relation to his or her expectations. In a nutshell,

customer satisfaction could be the pleasure obtained from consuming an offer.

Kotler et al. (2002) analyze that it is factual that, there is no specific definition of customer satisfaction

since as the years passes, different authors come up with different definitions. Customer satisfaction has also

been defined by another author as the extent to which a product’s perceived performance matches a buyer’s

expectations.

Giese & Cote (2000) says that the definition is supported by some other authors, who think that consumer’s

level of satisfaction is determined by his or her cumulative experience at the point of contact with the

supplier.

Boulding et al & Andreassen (2000) describes that there exist two conceptualizations of customer

satisfaction; transaction-specific and cumulative. Following the transaction- specific, customer satisfaction is

viewed as a post-choice evaluation judgment of a specific purchase occasion until present date; researchers

have developed a rich body of literature focusing on this antecedents and consequences of this type of

customer satisfaction at the individual level. Cumulative customer satisfaction is an overall evaluation based

on the total purchase and consumption experiences with a product or service over time.

Athanassopoulos (2000) describe that customers want to see for what they are looking for. Promotion is for

reducing the feeling of guilt which is associated with the use of different products or service which result to

customer satisfaction.

Schefter (2000) according to him another common factor which is helpful to derives customer satisfaction is

website. Website is the advanced way uses for the promotion, to aware the consumer and to satisfy them

with offering vast array of function and features. Before making choice of product offering, potential

customer has an opportunity through website to make a detailed comparison. When information like

discounted products and other special offers on different products travels in the public, could increase the

level of customer satisfaction.

Fornell (1992) analyze that client happiness, which is a sign of customer satisfaction, is and has always

been the most essential thing for any organization. Customer satisfaction is defined by one author as “the

consumer’s response to the evaluation of the perceived discrepancy between prior expectations and the

actual performance of the product or service as perceived after its consumption hence considering

satisfaction as an overall post-purchase evaluation by the consumer. Some authors stated that there is no

specific definition of customer satisfaction, and after their studies of several definitions they defined

customer satisfaction as “customer satisfaction is identified by a response (cognitive or affective) that

pertains to a particular focus (i.e. a purchase experience and/or the associated product) and occurs at a

certain time (i.e. post-purchase, post-consumption)”.

Johnson & Fornell (1991) analyze that this is more fundamental and useful than transaction specificity

customer satisfaction in predicting customer subsequent behavior and firm’s past, present and future

performances. It is the cumulative customer satisfaction that motivates a firm’s investment in customer

satisfaction.

Chapter 4

RESEARCH

METHODOLOGY

RESEARCH METHODOLOGY

Objectives of the Study:-

• To know the level of customer satisfaction in foreign exchange services provided by the Capital Local

Area Bank.

• To know the customer preferred transactions with Capital Local Area Bank foreign exchange.

Research Design

Research can be classified in one of three categories:

• Exploratory research

• Descriptive research

• Causal research

Exploratory research has the goal of formulating problems more precisely, clarifying concepts, gathering

explanations, gaining insight, eliminating impractical ideas, and forming hypotheses. Exploratory research

can be performed using a literature search, surveying certain people about their experiences, focus groups,

and case studies. When surveying people, exploratory research studies would not try to acquire a

representative sample, but rather, seek to interview those who are knowledgeable and who might be able to

provide insight concerning the relationship among variables.

Descriptive research is more rigid than exploratory research and seeks to describe users of a product,

determine the proportion of the population that uses a product, or predict future demand for a product. As

opposed to exploratory research, descriptive research should define questions, people surveyed, and the

method of analysis prior to beginning data collection. In other words the who, what, where, when, why and

how aspects of the research should be defined. Such preparation allows one the opportunity to make any

required changes before the costly process of data collection has begun.

Causal research seeks to find cause and affect relationships between variables. It accomplishes this goal

through laboratory and field experiments. If the objective is to determine which variable might be causing

certain behavior, i.e. whether there is a cause and effect relationship between variables, causal research must

be undertaken.

Our research regarding Consumer’s attitude towards online shopping is a descriptive research because we

just want to draw a picture of our topic as what are the factors that influence consumers to shop online

Research hypotheses

A series of testable hypotheses were developed from the proposed research model, as shown below:

Fore

x

Rate

Ease

of

Acces

Friendli

-ness of

Staff

Under-

standing of

requiremen

Accuracy

in

Document

Query

Manage

-ment

Completio

n Time

Operatin

g hours

Service

Update

s

s s t -ation

Customer

satisfactio

n (H1)

H1a

H1b

H1c

H1d

H1e

H1f

H1g

H1h

H1i

Sub Hypothesis for Consumer Satisfaction Level are :

H1a: There is a significant relationship between the Forex Rates and consumer satisfaction level.

H1b: There is a significant relationship between the ease of access and consumer satisfaction level.

H1c: There is a significant relationship between the Friendliness of Staff and consumer satisfaction level.

H1d: There is a significant relationship between the Under-standing of requirement and consumer

satisfaction level.

H1e: There is a significant relationship between the Accuracy in Documentation and consumer satisfaction

level.

H1f: There is a significant relationship between the Query Management and consumer satisfaction level.

H1g: There is a significant relationship between the Completion Time and consumer satisfaction level.

H1h: There is a significant relationship between the Operating hours and consumer satisfaction level.

H1i: There is a significant relationship between the Service Updates and consumer satisfaction level.

Objective Hypothesis Dependent

Variables

Independent

variable

Data

Collection

Instrument

1) The objective of this

study is to identify the

key factors influencing

Customer Satisfaction

level.

a) There is a significant

relationship between the Forex

Rates and Customer

Satisfaction level.

b) There is a significant

relationship between the Ease

of access and Customer

Satisfaction level.

c) There is a significant

relationship between the

Friendliness of staff and

Customer Satisfaction level.

Customer

Satisfaction

level

Forex Rates

Ease of access

Friendliness of

staff

Understanding

of requirement

Likert scale

d) There is a significant


understanding of requirement

and Customer Satisfaction

level.

e) There is a significant


Accuracy in documentation

and Customer Satisfaction

level.

f) There is a significant

relationship between the Query

management and Customer

Satisfaction level.

g) There is a significant


Completion time and Customer

Satisfaction level.

h) There is a significant


operating hours and Customer

Satisfaction level.

i) There is a significant


service updates and Customer

Satisfaction level.

Accuracy in

documentation

Query

management

Completion

time

Operating

hours

Services

updates

Data Instrument scale

QUESTIONNAIRE

The questionnaire is carefully designed to meet the requirements of the research. The questions are taken

from previous literature on Consumer’s satisfaction regarding forex services provided at the banks with a

view to validate the research more and some of the questions are self structured to cover the diversity of

research problems. The questionnaire consists of two main parts, first part is mainly focused on questions

pertaining to the information regarding Forex services availed by the customers at the bank. Second part of

the questionnaire covers factors influencing customer’s satisfaction level

.

Section A

Information regarding Forex

services availed by the

customers at the bank

1. Kind of customer

2. Forex product

3. Currency

4. Purpose

5. Amount

Section B

Factors influencing customer

satisfaction level

1. Forex Rates

2. Ease of access

3. Friendliness of staff

4. Understanding of

requirement

5. Accuracy in

documentation

6. Query management

7. Completion time

8. Operating hours

9. Services updates

SCALING TECHNIQUE:

Likert Scale has been used to get the questionnaires filled. It is a psychometric scale. When responding to a

Likert questionnaire item, respondents specify their level of agreement or disagreement on a symmetric

agree-disagree scale for a series of statements. The Likert scale is the sum of responses on several Likert

items. The format of a typical five-level Likert item:

1. Highly Dissatisfied

2. Dissatisfied

3. Neutral

4. Satisfied

5. Highly Satisfied

Data collection

There are two sources of data for research, namely primary and secondary data.

Primary data is relevant to the present study and usually collected by the researcher through

communication methods or interaction with respondents and observation methods. For this kind of data,

survey techniques were used to answer the research questions, which were based on a structured

questionnaire.

Secondary data is gathered from previous studies through various sources such as articles, internet,

organization’s database, government surveys and enterprises etc. The advantage of secondary data is time

saving and inexpensive in comparison with primary data. However, secondary data may not suitable to a

specific research since they are conducted for another study with different objectives (Ghauri & Gronhaug,

2007); in other words, they are universal for mass audiences. Therefore, researchers should use secondary

data as reference tool for the first step before proceeding with their own research

Chapter 5

Data Analysis

And

Interpretation

Data Analysis and Interpretation

To arrive at pertinent analysis, the collected data was put to a planned statistical analysis using SPSS

package. After scoring the questionnaires the data of all the people was pooled and tabulated. To arrive at

certain conclusion regarding the hypothesis advanced in the process investigation, the description of the

statistical tools which were applied for the analysis of data.

Statistical tools for data analysis Survey was conducted using Likert based questionnaire ranging from 1 =

Highly Dissatisfied to 5 = Highly Satisfied. Further SPSS 20.0 was used for analyzing the data.

Correlation

First of all correlation was applied to test the research hypothesis. The purpose of correlation analysis is to

measure and interpret the strength of a linear or nonlinear (e.g., exponential, polynomial, and logistic)

relationship between two continuous variables. When conducting correlation analysis, we use the term

association to mean “linear association”. Here in, we focus on the Spearman ρ correlation coefficients. The

correlation coefficient takes on values between −1 and +1, ranging from being negatively correlated (−1) to

uncorrelated (0) to positively correlate (+1). The sign of the correlation coefficient (i.e., positive or negative)

defines the direction of the relationship. The absolute value indicates the strength of the correlation.

Exploratory data Analysis:

This chapter would present all the analysis of the recorded data. Various tests would be applied on the data

to either select or reject the hypothesis that were stated in the research methodology chapter.

Tests of normality:

First of all, the gathered data is put into SPSS and is tested for normality using Shapiro Wilk’s test.

Nonparametric Correlations

Forex_Rates

Satisfaction_Level_with_inst

itution

Spearman's rho Forex_Rates Correlation

Coefficient

1.000 .158

Sig. (2-tailed) . .307

N 44 44

Satisfaction_Level_with

_institution

Correlation

Coefficient

.158 1.000

Sig. (2-tailed) .307 .

N 44 44

Descriptives

Statistic Std. Error

Forex_Rates Mean 4.0909 .07842

95% Confidence Interval

for Mean

Lower Bound 3.9328

Upper Bound 4.2491

5% Trimmed Mean 4.1010

Median 4.0000

Variance .271

Std. Deviation .52020

Minimum 3.00

Maximum 5.00

Range 2.00

Interquartile Range .00

Skewness .137 .357

Kurtosis .843 .702

Tests of Normality

Kolmogorov-Smirnova Shapiro-Wilk

Statistic df Sig. Statistic df Sig.

Forex_Rates .388 44 .000 .694 44 .000

a. Lilliefors Significance Correction

As we can see the significant value is below.05 so the data is non normal. Below is the plot of normality for

forex rates, here the lines are not touching the points which shows the data is non normal. As we can see the

data for all the variables is non normal , I have just shown one example of the non normal data regarding

forex rates.

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

Forex_Rates 44 97.8% 1 2.2% 45 100.0%

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

Forex_Rates 44 97.8% 1 2.2% 45 100.0%

Ease_of_Access 44 97.8% 1 2.2% 45 100.0%

Staff_Greeting 44 97.8% 1 2.2% 45 100.0%

Requirement_Understan

ding

44 97.8% 1 2.2% 45 100.0%

Accuracy 44 97.8% 1 2.2% 45 100.0%

Query_Mgmt 44 97.8% 1 2.2% 45 100.0%

Time_taken 44 97.8% 1 2.2% 45 100.0%

Operating_hours 44 97.8% 1 2.2% 45 100.0%

Service_updates 44 97.8% 1 2.2% 45 100.0%


_institution

44 97.8% 1 2.2% 45 100.0%

Descriptives

Statistic Std. Error

Forex_Rates Mean 4.0909 .07842


for Mean

Lower Bound 3.9328

Upper Bound 4.2491


Median 4.0000

Variance .271


Minimum 3.00

Maximum 5.00

Range 2.00


Skewness .137 .357

Kurtosis .843 .702

Ease_of_Access Mean 4.1136 .09319


for Mean

Lower Bound 3.9257

Upper Bound 4.3016


Median 4.0000

Variance .382


Minimum 2.00

Maximum 5.00

Range 3.00


Skewness -.688 .357

Kurtosis 2.410 .702

Staff_Greeting Mean 4.2273 .09680


for Mean

Lower Bound 4.0321

Upper Bound 4.4225


Median 4.0000

Variance .412


Minimum 3.00

Maximum 5.00

Range 2.00

Interquartile Range 1.00

Skewness -.240 .357

Kurtosis -.585 .702


ding

Mean 4.1818 .09901


for Mean

Lower Bound 3.9822

Upper Bound 4.3815


Median 4.0000

Variance .431


Minimum 3.00

Maximum 5.00

Range 2.00


Skewness -.205 .357

Kurtosis -.633 .702

Accuracy Mean 3.9545 .11241


for Mean

Lower Bound 3.7278

Upper Bound 4.1813


Median 4.0000

Variance .556


Minimum 2.00

Maximum 5.00

Range 3.00


Skewness -.278 .357

Kurtosis -.208 .702

Query_Mgmt Mean 3.9091 .11177


for Mean

Lower Bound 3.6837

Upper Bound 4.1345


Median 4.0000

Variance .550


Minimum 2.00

Maximum 5.00

Range 3.00


Skewness -.569 .357

Kurtosis .616 .702

Time_taken Mean 4.1364 .08958


for Mean

Lower Bound 3.9557

Upper Bound 4.3170


Median 4.0000

Variance .353


Minimum 3.00

Maximum 5.00

Range 2.00


Skewness -.037 .357

Kurtosis -.118 .702

Operating_hours Mean 4.0227 .08282


for Mean

Lower Bound 3.8557

Upper Bound 4.1897


Median 4.0000

Variance .302


Minimum 3.00

Maximum 5.00

Range 2.00


Skewness .017 .357

Kurtosis .580 .702

Service_updates Mean 4.0000 .07964


for Mean

Lower Bound 3.8394

Upper Bound 4.1606


Median 4.0000

Variance .279


Minimum 3.00

Maximum 5.00

Range 2.00


Skewness .000 .357

Kurtosis .899 .702


_institution

Mean 4.3182 .07103


for Mean

Lower Bound 4.1749

Upper Bound 4.4614


Median 4.0000

Variance .222


Minimum 4.00

Maximum 5.00

Range 1.00


Skewness .809 .357

Kurtosis -1.413 .702

Tests of Normality

Kolmogorov-Smirnova Shapiro-Wilk

Statistic Df Sig. Statistic df Sig.

Forex_Rates .388 44 .000 .694 44 .000

Ease_of_Access .346 44 .000 .728 44 .000

Staff_Greeting .297 44 .000 .778 44 .000


ding

.291 44 .000 .787 44 .000

Accuracy .274 44 .000 .839 44 .000

Query_Mgmt .322 44 .000 .818 44 .000

Time_taken .341 44 .000 .756 44 .000

Operating_hours .357 44 .000 .723 44 .000

Service_updates .364 44 .000 .703 44 .000


_institution

.432 44 .000 .587 44 .000

a. Lilliefors Significance Correction

Seeing all the data is non normal, we applied Spearman’s correlation to test the relationship between the

various variables.

Correlations

Forex_Rates

Satisfaction_L

evel_with_inst

itution

Spearman's rho Forex_Rates Correlation

Coefficient

1.000 .158


N 44 44


_institution

Correlation

Coefficient

.158 1.000


N 44 44

The first hypothesis is that there is a significant relationship between the Forex Rates and consumer

satisfaction level is rejected because the sig. Value is greater than .05. So, we can say that Forex rates have

a no correlation with consumer satisfaction.

Satisfaction_L

evel_with_inst

itution Ease_of_Access

Spearman's rho Satisfaction_Level_with

_institution

Correlation

Coefficient

1.000 .301


N 44 44

Ease_of_Access Correlation

Coefficient

.301 1.000


N 44 44

The second hypothesis is that there is a significant relationship between the ease of access and consumer

satisfaction level and this is proved true with value .301 because the sig. Value is less than .05. So, we can

say that ease of access have a medium correlation with customer satisfaction

Satisfaction_L

evel_with_inst

itution Staff_Greeting


_institution

Correlation

Coefficient

1.000 .118


N 44 44

Staff_Greeting Correlation

Coefficient

.118 1.000


N 44 44

The third hypothesis is that there is a significant relationship between the Friendliness of Staff and

consumer satisfaction level is rejected because sig. value is greater than .05. So,we can say that

Friendliness of Staff has no correlation with customer satisfaction.

Satisfaction_L

evel_with_inst

itution

Requirement_Understandi

ng


_institution

Correlation

Coefficient

1.000 .039


N 44 44


ding

Correlation

Coefficient

.039 1.000


N 44 44

The fourth hypothesis is that there is a significant relationship between the Under-standing of requirement

is rejected because sig. Value is greater than .05. So, we can say that Under-standing of requirement has no

correlation with customer satisfaction.

Satisfaction_L

evel_with_inst

itution Accuracy


_institution

Correlation

Coefficient

1.000 .215


N 44 44

Accuracy Correlation

Coefficient

.215 1.000


N 44 44

The fifth hypothesis is that there is a significant relationship between the Accuracy in Documentation and

consumer satisfaction level is rejected because sig. Value is greater than .05. So, we can say that Accuracy

in Documentation has no correlation with customer satisfaction.

Satisfaction_LQuery_Mgmt

evel_with_inst

itution


_institution

Correlation

Coefficient

1.000 .335*


N 44 44

Query_Mgmt Correlation

Coefficient

.335* 1.000


N 44 44

The sixth hypothesis is that there is a significant relationship between the Query Management and

consumer satisfaction level and this is proved true with value .335 because sig. Value is less than .05. So,

we can say that Query Management has a medium correlation with customer satisfaction.

Satisfaction_L

evel_with_inst

itution Time_taken


_institution

Correlation

Coefficient

1.000 .352*


N 44 44

Time_taken Correlation

Coefficient

.352* 1.000


N 44 44

*. Correlation is significant at the 0.05 level (2-tailed).

The seventh hypothesis is that there is a significant relationship between the Completion Time and

consumer satisfaction level and this is proved true with value .352 because sig. Value is less than .05. So,

we can say that Completion Time has a medium correlation with customer satisfaction.

Satisfaction_L

evel_with_inst

itution Operating_hours

Spearman's rho Satisfaction_Level_withCorrelation 1.000 .242

_institution Coefficient


N 44 44

Operating_hours Correlation

Coefficient

.242 1.000


N 44 44

The eighth hypothesis is that there is a significant relationship between the Operating hours and consumer

satisfaction level is rejected because the sig. value is greater than .05. So, we can say that Operating hours

has no correlation with customer satisfaction.

Satisfaction_L

evel_with_inst

itution Service_updates


_institution

Correlation

Coefficient

1.000 -.187


N 44 44

Service_updates Correlation

Coefficient

-.187 1.000


N 44 44

The ninth hypothesis is that there is a significant relationship between the Service Updates and consumer

satisfaction level is rejected because sig. value is greater than .05. So,we can say that Service Updates has no

correlation with customer satisfaction.

Which foreign exchange service(s) availed by you?

Services No. of Respondent Percentage

Foreign Currency 38 58%

Wire Transfer 6 9%

Foreign Currency Demand Draft 6 9%

Travellers Cheques 5 8%

Forex Travel cards 10 15%

For what purpose do you use forex services?

Purpose No. of Respondent Percentage

Personal / Private /Leisure Visits 33 48%

Business Visit 14 20%

Employment abroad 3 4%

Maintenance of Close relative

abroad

2 3%

Education abroad 9 13%

Medical treatment 2 3%

Immigration 6 9%

Chapter 5

Conclusion

Conclusion

This is a final chapter of the report. In this chapter we will conclude all what we have studied in our whole

research. The first objective was to check the customer satisfaction level with the forex services of Capital

Local Area Bank. In achieving this research was conducted as above and the results are shown. The Sixth

hypothesis that there is a significant relationship between the Query Management and consumer satisfaction

level is accepted and thus the correlation between query management and customer satisfaction is

established. The Seventh hypothesis that there is a significant relationship between the Completion Time

and consumer satisfaction level is also accepted. Thus we can say that query management and completion

time has a direct correlation with the customer’s satisfaction level. So the bank should pay attention to the

query management system and the completion time taken by the employees for the service.

The Second Objective was to know the customer preferred transactions.

Mostly the service used in forex services is Foreign currency. The second mostly used service is Forex

travel card then wire transfer and Foreign Currency Demand Draft and the less used is traveller cheques.

Mostly used transaction is regarding the Personal / Private /Leisure Visits. The second most preferred

transaction is the Business visits. The third most preferred transaction is the Education abroad. So we can

say that Jalandhar being the NRI hub has mostly the Personal / Private /Leisure Visits as preferred

transactions. Then comes the Business purpose which the affluent people can afford, it is also in big number.

The third purpose is the Education abroad.

While studying for the project we have conclude that the above factors or variables are responsible for the

satisfaction of the customers at Capital Local Area Bank. The Bank is aggressive in retail forex with good

products such as TT’s, DD’s, Traveller cards, Traveller’s cheques. It has a good base of satisfied customers

in the area but as the competition grows in the area so the bank needs to play more aggressively and open

new branches in the area so as to get within the reach of each and every customer of the foreign exchange.

REFERENCES

1. Huang (2011) Determinants of Customer Satisfaction

(http://www.facultyjournal.com/webmaster/upload/__Fast%20Food%20Paper.pdf) [Viewed 20-7-2013]

2. Kurniawan (2010) Determinants of Customer Satisfaction


3. Solomon (2009) The Relationship between Customer Satisfaction and Service Quality

(http://umu.diva-portal.org/smash/get/diva2:448657/FULLTEXT02.pdf) [Viewed 14-07-2013]

4. Kotler & Keller (2009) the Relationship between Customer Satisfaction and Service Quality


5. Levy (2009) the Relationship between Customer Satisfaction and Service Quality


6. Athanassopoulos (2000) Determinants of Customer Satisfaction


7. Schefter (2000) Determinants of Customer Satisfaction


8. Giese & Cote (2000) the Relationship between Customer Satisfaction and Service Quality


9. Boulding, et al.& Andreassen (2000) Customer satisfaction

(http://www.studymode.com/essays/Customer-Satisfaction-1232027.html) [Viewed 22-7-13]

10. (http://en.wikipedia.org/wiki/Foreign_exchange_service_(finance))

11. (http://capitalbank.co.in/cb_about.htm)

APPENDIX

------------------Questionnaire on Customer Satisfaction in FOREX Services------------------------

1. Name of the Person ________________

2. Contact No._______________________

3. Occupation_______________________

4. Are you satisfied with the forex services provided by Capital Local Area Bank?

( ) Highly Dissatisfied

( ) Dissatisfied

( ) Neutral

( ) Satisfied

( ) Highly Satisfied

5. Which kind of customer are you?

( ) Agent ( ) Direct client ( ) Channel partners.

6. Which foreign exchange service(s) availed by you.

( ) Foreign Currency

( ) Wire Transfer

( ) Foreign Currency Demand Draft

( ) Travellers Cheques

( ) Forex Travel cards

7. In which currency you usually do forex transactions?

( ) United States Dollars (USD)

( ) Great Britain Pounds (GBP)

( ) EURO

( ) Arab Emirates Dirham (AED)

( ) Australian Dollars (AUD)

( ) Canadian dollars (CAD)

( ) New Zealand Dollars (NZD)

( ) Singapore Dollars (SGD)

( ) Swiss Francs (CHF)

( ) Saudi Riyal (SAR)

8. For what purpose do you use forex services?

( ) Personal / Private /Leisure Visits

( ) Business Visit

( ) Employment abroad

( ) Maintenance of Close relative abroad

( ) Education abroad

( ) Medical treatment

( ) Immigration

( ) If Others Specify__________________________

9. The amount of foreign exchange transaction done in a Financial Year.

( ) Below Rs 10, 00,000

( ) From Rs 10, 00,000- 1,00,00,000

( ) Above Rs 100, 00,000

10. Are you satisfied with the foreign exchange rates?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


11. Are you satisfied with the accessibility of the branch?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


12. Are you satisfied with the staff’s greeting and welcome?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


13. Are you satisfied with the staff’s ability to understand your requirement?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


14. Are you satisfied with the accuracy in documentation?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


15. Are you satisfied with the clarification given to your queries?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


16. Are you satisfied with the time taken by the staff to complete your requirement?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


17. Are you satisfied with the operating hours of Capital Local Area?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


18. Are you satisfied with the updates given to you regarding new services?


( ) Dissatisfied

( ) Neutral

( ) Satisfied


1120917 project

Documents

state of satisfaction

level of satisfaction

introduction page

satisfaction behaviors

retail forex

forex services speed

captial local area bank

index description page