DECLARATION

I, J yotrimayee Singh, hereby declare that this piece of dissertation work entitled “Risk Management of
Forex trading in Bank of India” prepared by me under the guidance of Prof. Pradyot Keshari Pradhan,
Faculty of P.G. Department of Commerce, Utkal University and under the external assistance of
Mr Subhendu Kumar Mandal, Forex Manager, Bank of India, Main Branch, Bhubaneswar.

It is a genuine piece of research work accomplished by me for the summer internship project towards the
partial fulfillment of the requirement for the award of the degree of Master in Business Administration
(Financial Management), Utkal University. I also hereby declare that this project report has neither been
submitted nor published elsewhere.

Date: Jyotrimayee Singh

Place: Bhubaneswar Roll No- 33706V173013
P.G. Department of Commerce

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 CERTIFICATE

This is to certify that Ms. Jyotrimayee Singh has undertaken Summer Internship Project (SIP) titled “Risk
Management in Forex Trading of Bank of India” under my guidance and supervision.

This work is result of her original contribution and no part of this work has been submitted elsewhere for
any degree or diploma.

I wish her all success in future endeavor.

PROF. PRADYOT KESHARI PRADHAN

P.G. Department of Commerce
Utkal University, Bhubaneswar

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 ACKNOWLEDGEMENT

It is a pleasure to acknowledge my debt to all the people involved directly or indirectly, in the development
of this project. This experience will definitely help me in my future endeavors of work.

I now take the opportunity to thank my project guide Mr. Subhendu Kumar Mandal, Forex Manager, Bank
of India, Bhubaneswar branch for his foresight in giving me the opportunity to develop the ideas. I truly
admire his skill and capacity of making clear-cut points for the requirement understanding.

I also extend my gratitude to Prof. Pradyot Keshari Pradhan, P.G. Department of Commerce, Utkal
University for being a constant source of encouragement and guidance required for the completion of the
project.

I would like to thank my parents, who always inspired me and provided necessary functional requirements,
which helped to attain my goal.

My obligations remain to all those people and friends who have directly or indirectly helped me in
successful completion of my project. No amount of words written here will suffice for my sense of gratitude
towards all of them.

Date: Jyotrimayee Singh

Place: Bhubaneswar Roll No- 33706V173013
P.G. Department of Commerce

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 EXECUTIVE SUMMARY

The banking sector is an important pillar of Indian economy. It contributes greatly to the growth of the
economy with vast network of branches all over the country. Bank of India being the largest public sector
banking entity in the country has created many milestones.
Forex being a department in Bank of India has a very vast impact over the economy of the country. It has
helped the country to boost up its economy and keep its exporters to earn more and more profits. Bank of
India has always been a helping hand by providing financial help to the exporters by the help of which
exporters were able to lesser the risk in their business. The work reported in this project is concerned with
various concepts of forex in order to analyze and to know more about Markets. This project gives a detailed
description of forex trading mechanism of Bank of India. Only due to foreign exchange one country is able
to do trade with other countries. Foreign exchange also gives us a vast vision of market, currencies and the
various bank accounts that are used in dealing with various currencies.
The foreign exchange market is the mechanism by which a person of firm transfers purchasing power from
one country to another, obtains or provides credit for international trade transactions, and minimises
exposure to foreign exchange risk. A foreign exchange transaction is an agreement between a buyer and
seller that a given amount of one currency is to be delivered at a specific date for some other currency. A
foreign exchange rate is the price of a foreign currency. Participants include banks and nonbank foreign
exchange dealers, individuals and firms conducting commercial and investment transactions, speculators and
arbitragers, central banks and treasuries, and foreign exchange brokers. Transactions are made either on a
spot basis or on a forward or swap basis.

The foreign exchange risk is related to the variability of the domestic currency, value of assets, liabilities or
operating income due to unanticipated changes in exchange rates, whereas foreign exchange exposure is
what is at risk. Forex risk is the variability in the profit due to change in foreign exchange rate.

Risk Management is the process which identifies risks, and takes action to remove or control negative
results. Effective risk management strategies have become increasingly necessary due to the dynamic nature
of the business environment.

Bank of India being one of the leading nationalized bank, issues letters of credit for their importer clients
and handles letters of credit received from overseas correspondents in favor of exporters from India, handle
foreign inward remittances as well as outward remittances; buying and selling of foreign currencies,
handling and forwarding of import and export documents and giving the consultancy services to the
exporters and importers. Its branches all over the country are performing this responsibility. Main branch,
Bhubaneswar is a live example.

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