Write a note on Foreign Exchange Dealers Association of India (FEDAI)

FOREIGN EXCHANGE DEALERS ASSOCIATION OF INDIA (FEDAI) :

The FEDAI was set up in 1958 as an association of banks dealing in foreign exchange in

India (called Authorized Dealers – AD’s). It is a self regulatory body and is incorporated

under Section 25 of The Companies Act, 1956. The major activities include framing of

rules governing the conduct of foreign exchange business between banks, transactions

between banks and the public and liaison with RBI for reforms and development of the

foreign exchange market.

Presently their main functions are as follows :

 Frame guidelines and rules for Foreign exchange Business.

 Training of Bank Personnel in the areas of Foreign Exchange Business.

 Accreditation of Foreign exchange Brokers and periodic review of their operations.

They also advise the RBI regarding licensing of new brokers.

 Advising / Assisting member banks in settling issues / matters in their dealings. They

provide a standardized dispute settlement process for all market participants.

 Represent member banks in discussions with Government / Reserve Bank of India /

Other Bodies and provide a common platform for AD’s to interact with the

Government and RBI.

 Announcement of daily and periodical rates to member banks. At the end of each

calendar month they provide a schedule of forward rates to be used by AD’s for

revaluting foreign currency denominated assets and liabilities.

 Announcement of ‘spot date’ at the start of each trading day to ensure uniformity in

settlement between different market participants.

 Circulate guidelines for quotation of rates, charging of commissions etc. by AD’s to

their customers and by brokers for interbank transactions.