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RouteForex Case Study


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FTP (Forex Transaction Processing)

An UK based entity, has a presence in India and is the world leader in niche peristaltic pumps and associated fluid path technologies. Comprising ten established brands, each with their own area of expertise, but together offering our customers unrivalled solutions for their pumping and fluid transfer applications.

As per mandate from H.O. in UK, they are banking with one of the MNC banks and doing all domestic as well as international transactions through them. By the first quarter of this FY we approached them with our solutions to handle their routine remittances to be routed through us for execution through bank.

Having annual FX of GBP2.00Mn

We had audited the transactions, the result was as below:

Exchange Rate Analysis - WMIPL
Date of Receipt CCY Received Amount Exchange Rate Spot High Spot Low Difference Difference in INR
2/22/2017 GBP 28,542.28 81.8121 83.738 83.171 (1.36) -38786.10
3/24/2017 GBP 24,441.20 80.4566 83.823 82.914 (2.46) -60061.80
4/10/2017 GBP 54,348.88 78.6354 80.248 79.446 (0.81) -44055.20
5/9/2017 GBP 22,295.45 82.3289 83.723 83.204 (0.88) -19510.75
4/19/2017 EUR 6,802.43 67.5028 69.32 69.13 (1.63) -11068.91
2/1/2017 DKK 53,406.38 9.5300 9.8226 9.7563 (0.23) -12085.86
2/1/2017 DKK 21,980.40 9.5300 9.8226 9.7563 (0.23) -4974.16
2/1/2017 DKK 18,390.58 9.5300 9.8226 9.7563 (0.23) -4161.79
4/28/2017 DKK 30,723.46 9.2771 9.4709 9.38 (0.10) -3160.92
4/28/2017 DKK 27,404.73 9.1229 9.4709 9.38 (0.26) -7046.72
Potential Loss Rs. 204,192.23

This is the scenario of client’s FX transactions, before RouteForex’s intervention.

Observations

  • Observed that bank is not charging appropriate FX margins and keeping an average gap of 82 paisa.
  • The gap is ranging from 10 paisa to Rs. 2.40 that too from day’s lowest spot rate.
  •  In these 10 transactions client had lost Rs. 2.04 lakhs that too from the lowest possible rate.

On basis of this outcome, client decided to get RouteForex on-board to handle the transactions.

Scenario after our entry

Currency Amount Spot Cash Spot Bank Margin Net Rate Initial Difference Potential Savings (Paisa) Potential Savings (Rs.)
GBP 89012.26 83.87 0.06 0.50 83.31 1.26 0.7600 ₹ 67,649.32
SEK 414356.86 7.85 0.03 0.13 7.69 0.25 0.1200 ₹ 49,722.82
DKK 431323.49 10.13 0.05 0.04 10.04 0.23 0.1900 ₹ 81,951.46
GBP 71,899.75 87.0000 0.0500 0.2000 86.7500 1.26 1.0600 ₹ 76,213.74
GBP 188,832.54 86.2600 0.0200 0.0400 86.2800 1.26 1.2200 ₹ 230,375.70
DKK 167,099.46 10.1200 0.0500 0.1200 9.9500 0.23 0.1100 ₹ 18,380.94
GBP 83,515.55 85.7500 0.0600 0.0400 85.6500 0.25 0.2100 ₹ 17,538.27

₹ 541,832.24

It has been visibly seen that the gap has been narrowed down substantially. And the FX loss has been recovered in 7 transactions only.

For its overall FX exposure we have brought the savings of Rs. 5.41 Lakhs. Also, keeping these margins the savings would be nothing less than Rs. 20.00 Lakhs annually.


Advantages through FTP are:

  • Client is getting 100% transparency of their transactions
  • Getting deals executed through us by providing details on just a mail
  • Able to access all information on just one click and log-in
  • Can focus on core business activities
  • Enjoying savings of almost by adopting FTP services

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