What’s disrupting RBI’s forex disruption?

Last August, RBI unveiled FX-Retail, a foreign exchange trading platform for retail customers. A year on, while India’s daily forex volumes touch $33 billion, FX-Retail barely accounts for a few million

The RBI sought to help small businesses who end up paying high forex margins by introducing FX-Retail

Banks are reluctant to push the platform due to the discrepancy in margins offered; its interface isn’t very user-friendly either

And CCIL, which built and now maintains FX-Retail, does not have the pedigree for a consumer-facing platform

CCIL, still believing in “build and they will come”, is trying to introduce more features, but the problems are structural

For Ritesh Kumar Singh, founder of research and advisory firm Indonomics Consulting Pvt Ltd, getting paid by his clients—most of which are based abroad—comes with an associated heartache. For every overseas payment that comes in, bank margins on the foreign exchange (forex) prices result in him losing about 2-3% of his income.

In August last year, the Reserve Bank of India (RBI), the country’s central bank, presented a solution for small business owners like Singh. It launched FX-Retail, a retail forex trading platform that anyone—from individuals to small businesses and payment banks—could log on to and book a forex price at or near market rates.

AUTHOR

Shreedhar Manek

Based in Bangalore, Shreedhar is a Staff Writer for The Ken. He writes on technology, education, human resources and urban mobility. He has a BTech in Computer Science and an MS in Urban Sociology from IIIT Hyderabad.

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