Short Realisation on Export Bills

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This query is : Resolved

K Balaji (Querist)

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 ?

ravi

ravi (Expert)

03 January 2009 u can to 100$ as foreign bank charges.

regards
k.ravi

K Balaji

K Balaji (Querist)

06 January 2009 Mr.A can claim that Short Relisation as Foreign bank Charges but he has to account it in what Exchange rate.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)

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.

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