Short Realisation on Export Bills
This query is : Resolved
26 December 2008
Mr.A Exported Goods to US at 1500$ as invoice value. He made Forward Contract for 1500$ @ Rs.40 Per Dollar. Mr.A Discout that Bill with bank. But the Bill Realised only for 1400$. In this case bank recover loss of 100$ short realisation from Mr.A in what Exchange rate ?
06 January 2009
Mr.A can claim that Short Relisation as Foreign bank Charges but he has to account it in what Exchange rate.
27 August 2010
Forward cover and bank charges are 2 different things:
Mr. A has taken a forward cover of $1500 @ 40/$
Mr. A is bound by this cover
If Mr. A has in effect only $1400, then he can give this to bank and receive $1400 @ 40 Rs. 56,000, irrespective of the exchange rate at that date (It could be 42 or 37)
Now he is also bound to sell $1500 as per forward cover but could only sell $1400. The remaining $100, he will either have a profit (37) or loss (42) depending on what the exchange rate would be.
Pls revert is the answer is not satisfactory.
Mr. A has taken a forward cover of $1500 @ 40/$
Mr. A is bound by this cover
If Mr. A has in effect only $1400, then he can give this to bank and receive $1400 @ 40 Rs. 56,000, irrespective of the exchange rate at that date (It could be 42 or 37)
Now he is also bound to sell $1500 as per forward cover but could only sell $1400. The remaining $100, he will either have a profit (37) or loss (42) depending on what the exchange rate would be.
Pls revert is the answer is not satisfactory.
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