Submitted by: Submitted by gunjan10
Views: 184
Words: 26079
Pages: 105
Category: Business and Industry
Date Submitted: 10/17/2013 01:40 AM
Chapter 1
1.1 Executive Summary
The foreign exchange market is the largest market in the world with average daily turnover of US$ 3.2 trillion.
Foreign exchange consists of trading one type of currency for another. Not only is it the world's largest financial market, but unlike any other financial market, investors can respond to currency fluctuations caused by economic, political and social events at the time they occur without having to wait for exchanges to open.
The characteristics of foreign exchange market can be listed as under:
* A 24 hour market
* An over the counter market
* A global market with no barriers/no specific location
* Supports large capital and trade flows
* Highly liquid markets
* High fluctuations in currency rates (every 4 second)
This project covers in depth the dynamics of foreign exchange market, methods of payment in international trade, the dealing room operations, the documents under scrutiny, the regulatory authority and the various facilities available to the exporters and importers. The project helps us understand the procedure adopted by banks to carry out merchant transactions and also its role in foreign exchange market.
1.2 Research Methodology
Research methodology used in this project is relatively simple. The working of a bank in the forex department was studied using circulars issued by FEDAI and forex manual (Bank of India).
As the project purely focuses on the working of forex in bank of India and the merchant transactions involved, most of the data is collected keeping in mind the objectives of the project. Data is mainly obtained from secondary sources.
Objectives:
This project seeks to understand
* The concept of Forex Market
* Operations of Foreign exchange market
* The role of banks in foreign exchange
* Merchant transactions and the documents required
* Regulatory authority governing foreign exchange market
1.3 Sector Overview: Banking Sector...