Making foreign currency drafts - procedure and charges Home Travellers cheques
In India most non cash money transactions are through cheque or draft. However if you wish to make a draft in US dollars or any other foreign currency for purchase of foreign currency goods or services, the procedure is very time consuming.
In recent years, the foreign currency available to a resident Indian has increased considerably and is governed by FEMA (Foreign Exchange Management Act). Updated guidelines on the amount allowed and transactions are available at the website of the Reserve Bank of India. Foreign exchange ( Forex ) Facilities for Residents (Individuals) in India
Recently we wanted to make a purchase, for which payment was to be made in US dollars. Since online credit card transactions are risky we tried to make a foreign currency draft. Also many online merchants in Europe and North America do not accept credit cards from Asia but to a high percentage of fraudulent transactions.
In Mumbai, if you have rigid office timings, the nearest Urban Co-operative Bank is most convenient , since they are open in evenings. The larger Co-op banks usually accept payment in foreign currency. However they do not issue foreign currency drafts, only travelers checks . Smaller Co-op banks , which are not scheduled banks do not have a foreign currency department, they suggest you contact the nationalised banks.
Nationalised banks like Canara Banks issue foreign currency drafts. However, the draft is issued only 3-4 days after you submit the form, since the draft is issued from the head office. In fact, they recommend that you visit the head office to collect the draft. They also suggest you try foreign banks like Citibank or private banks like ICICI bank, HDFC bank
We contacted ICICI bank through email for details of procedure and charges for making foreign currency drafts. Despite repeated requests, they insisted that we visit their branch to get the information. Since their branches are inconveniently located,
we decided it was not worthwhile wasting so much time
HDFC bank charges a flat sum of Rs 200 to customers and Rs 300 to non HDFC bank account holders for making a foreign currency demand draft with effect from May 1st, 2006. You have to fill a form and the draft is available after 4-6 hours. In case of any problem, you can cancel the draft on payment of a fee of Rs 50. The fee is applicable for all Foreign Currency Demand Drafts in USD, GBP, CAD, Euro and miscellaneous currencies
After making the draft , it has to be sent by courier which is very expensive. So making and sending a dollar draft can be very inconvenient form of payment
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