An Indian spot currency trading platform

The RBI proposal is both noble and overdue, but it must avoid the creation of early monopolies or slicing and dicing the platform

Bhargavi ZaveriRadhika Pandey

On October 12, 2017, the Reserve Bank of India (RBI) issued a discussion paper that proposes to establish a spot currency trading platform and allow retail consumers access to it. Today, retail consumers are largely at the mercy of banks when dealing in foreign exchange. Banks often decide the buying and selling rates for foreign exchange at the opening of business hours and retain the same rate through the day. Resultantly, buyers and sellers of foreign exchange end up missing the benefits of intra-day price movements. Moreover, most banks do not transparently disclose their charges for currency dealings. Hence, allowing direct access to an exchange-like platform for currency trading is a welcome move. This essentially means when one goes to buy or sell foreign exchange from or to a bank, the buyer or seller dictates the price. The bank will place the order on the exchange platform for execution. This is a good thing, as it places more control in the hands of the consumer and
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Nov 26 2017 | 10:39 PM IST

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