India’s central bank has urged commercial banks to improve retail foreign exchange services, saying gaps remain between regulatory intentions and the experience of customers.
Reserve Bank of India (RBI) Deputy Governor Rohit Jain said banks should establish clear policies on charges, documentation requirements and timelines for foreign exchange transactions.
Jain made the remarks in a speech delivered last Friday and released by the RBI on Wednesday, outlining the current state of India’s foreign exchange market and the central bank’s priorities for the next decade.
He said a recent review by the RBI identified shortcomings in banks’ policies governing customer transactions, charges and documentation required for outward remittances.
According to Jain, the review also found instances of multiple documentation requirements and delays in processing cross-border remittances.
He said the central bank had authorised lenders to establish clear policies covering documentation, charges, processing timelines, escalation procedures and mechanisms for resolving customer complaints.
Meanwhile, Jain said the average daily turnover in India’s foreign exchange market, including spot and derivatives transactions, had risen to about $80 billion.
He added that daily turnover in the non-deliverable forward (NDF) market stood at approximately $7 billion.
Jain identified expanding the number of market makers, increasing participation by public-sector banks and promoting electronic trading platforms as key priorities for the development of India’s foreign exchange market.
He said strengthening these areas would help deepen the market and improve its efficiency as India seeks to expand its role in global financial markets.
