TT (Telegraphic Transfer) Rate : Telegraphic Transfer rate may be either TT in detail. T.T. Buying Rate: This rate is applied for purchase of foreign currency by banks where cover is already obtained by banks in India. This rate is applied for all clean remittances outside India. All foreign inward remittances which are made payable in India are converted by applying this rate. For' example, suppose Nislla gets from Citi Bank in New York a demand draft for $10,000 drawn on Citi Bank, New Delhi. The New York bank will credit the New Delhi Citi Bank's account with itself i
TT' buying Rate is calculated as :
TT Buying Rate = Base ,rate - Exchange Mar
The base rate refers to the inter bank rote..&elfore.ign Exchange Dealers Association of India
(FEDAI) has prescribed exchange margin rati as.between 0.025% to 0.080%. an@ have
discretion to charge any rateiof exchange 'margin within this prescribed range. Let us take an
example.
Suppose interbank rates for US $ are:
Spot US$l - Rs.35.2575 - 35.2625
This means that Base Rate = 35.2575
Less Exchange Margin @0.08% = 0.0280
t-
35.2295
Round off Figure = 35.23
Suppose a customer wants to purchase and will have to pay (35.23 x 10,000) = Rs.3,,52,300. The bank may charge commission. T.T. Selling Rate: This rate is applied for all clean remittances outside India. It is applied for selling foreign currency to its customer by the bank such as for issuance of bank drafts, mail/ telegraphic transfers, etc. The rate is computed as:
Here, the base rate is the interbank selling rate. FEDAI has prescribed exchange margin rate
Let us take an example.
Interbank exchange rate for US $ is:
I Spot US$1 = 35.2625 I
Add Exchange margin say 0.15% = 94524
=====
35.32
Suppose a customer wants to purchase a draft drawn on New York for $10,000. The customer will have to pay (35.32 x 10,000) = Rs.3,53,200. The bank may charge commission.