Short Realisation on Export Bills

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K Balaji (Querist)
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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)
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03 January 2009 u can to 100$ as foreign bank charges.

regards
k.ravi

K Balaji

K Balaji (Querist)
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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)
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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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