Small currency exchange providers stuck with excess foreign exchange for the past one month following travel bans want RBI to direct State Bank of India (SBI) and other PSU banks to buy currency from them as they expect a 6-8 month lull in international travel following the Covid-19 pandemic.
The bigger, organised AD2 RBI license holders said they will focus on export of currencies instead of importing currencies for travellers once restrictions are lifted.
“The pandemic will hit us for a minimum of eight months. No one will travel to the US and Europe as they are severely hit. People will avoid China as well. Question marks remain for other countries as well. All money changers have excess currency,” said Rajesh Rastogi, director at BPRN Forex and Travels.
“The Reserve Bank of India (RBI) should direct SBI and other PSU banks to buy currency from us. It might be easier for them to export surplus currencies. Export is a long drawn process and one needs bank guarantees. About 80% of the money changers are small players. We have to support our families,” he added.
Chaitanya Dhingra , director at Mark Forex Hub, said 90% of the money changers are sitting on excess foreign exchange stock. In an order on April 15, the ministry of homes affairs (MHA) stated all domestic and international air travel will remain prohibited until May 3 except for security purposes.
“The challenge is to sell our stock and we need income. Earlier, we were selling to private banks, which were exporting currency from India, but that has stopped as flights are not going out," he said.
Sudarshan Motwani, founder and CEO of BookMyForex that offers currency exchange, forex cards and wire transfers, said unlike aviation or hospitality industry, the forex business is not so visible and small mom and pop exchangers do not have deep pockets.
Money changers have begun shutting branches or shrinking staff. Leisure is anyway paused and even wire transfers may not happen as the students are unlikely to travel this fall season as many universities will not open their dorms. We are anticipating large scale job losses in this space with near zero income,” said Motwani.
Vijay Maurya, who heads the wholesale forex business for AD2 license holder Arvog Forex with 25 branches across India, said there will be a change in business scenario. ..
“The worst hit is the travel industry and 50% of our business is gone. Previously we were focusing mainly on importing of currencies and distributing to travellers going abroad here. But, now it will be vice versa,” said Maurya.
“We will focus on remittances and export of currencies going forward, which we will buy from money changers who have excess supply during the lockdown. This way there will be some scope of survival,” he added.
Source:- economictimes.indiatimes.com