SYNOPSI S

Management of Foreign Exchange Transactions in India

STATEMENT OF THE PROBLEM
Trade and financial transactions within a country are generally carried out in local currencies i.e. Rupees in India, unless otherwise permitted in a foreign currency for a specific reason. When such transactions take place between persons/entities of two different countries that use different currencies, it is necessary to convert local currencies into foreign currencies or vice versa. These are known as foreign exchange transactions. In order to facilitate such transactions, commercial banks appointed as Authorised Dealers in foreign exchange are permitted to buy, sell, lend and borrow foreign currencies in foreign exchange markets. These foreign exchange dealings are also treated as foreign exchange transactions. The rate at which the currencies are converted is the exchange rate. The buying and selling exchange rates are announced daily by the Central Bank. My Project mainly related to identify:1. The management of foreign exchange transaction in India across three different companies such as bank, manufacturing and Export-Import House. 2. Suggest the ways to minimize the risk from foreign exchange transaction

WHY IS THE PARTICULAR TOPIC CHOOSEN Effective foreign exchange management is a financial tool for ensuring the profitability of the companys primary business. As such, the company should prepare a comprehensive policy statement on foreign exchange risk that clearly states the companys objectives, the tactics for attaining these objectives, and the allocation of responsibility for exercising these tactics. The company should rank the types of exposures that it faces as a result of fluctuating exchange rates according to their importance to financial, operating and senior management. This prioritization serves as the basis for focusing exposure management efforts and deciding which protective actions the company should employ. The company should review these ranking as operating conditions change. For most companies, the management of transactional and consolidated corporate earnings exposures takes precedence over exposures arising from accounting translation methods. When situations occur in which the companys earnings are threatened by factors arising from more than one type of exposure, treasury staff should treat the underlying exposure according to the priority assigned by management. WHAT CONTRIBUTION WOULD THE PROJECT MAKE AND TO WHOM Result of my survey and analysis would provide very useful input to the management of foreign exchange transactions as a major concern for companies who deals in day to day to foreign exchange. My study work will also be appreciated by selected companies to whom I will research. They have welcomed my effort and hard work and looking forward to collect all available data in this respect and ensure me that the management will positively think to the conclusions of my project work.

OBJECTIVE AND SCOPE OF THE STUDY

OBJECTIVE To understand the management of foreign exchange transaction in three different companies such as bank, manufacturing and Export-Import house in India SCOPE The scope of my project will be as follows:i. The study will be confined to a bank, Manufacturing and Export-Import House

ii.
iii.

The study will be conducted around Delhi/NCR area The study will be confined to foreign exchange risk, policy and regulation related to foreign exchange transactions

Methodology Sampling
(A)

Primary Data:The tool of my research for obtaining primary data will be

Questionnaire
i.

The sample size is 30 The sample composition will be 10 finance managers each in bank, manufacturing and Export-Import House

ii.

(B)

Secondary Data:- The secondary data will be collected from Journals of Trade, International Business Books related to foreign exchange management Web articles related to foreign exchange management

i.

ii. iii.

Guides Resume About the Guide

1. Name of the Project Guide 2. Designation & Address of Project Guide 3. Title of the project 4. Date of Submission

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SIGNATURE