IDBI Bank Forex Rates Explained | How to Save on Transfers

The Reserve Bank of India (RBI) has authorized select Indian banks to carry out foreign exchange transactions. One of them is the IDBI Bank.

It provides foreign exchange services, remittances, forex cards, and even has a dedicated FX-Retail platform (for interbank + markup transparency).

But before you select IDBI Bank to manage your cross-border transactions, it's important to understand the applicable forex rates and other charges, so there are no surprises later.

In this article, we'll look at IDBI Bank's foreign exchange rates in detail to help you make overseas transactions as simple as possible.

IDBI Bank offers different foreign exchange services depending on the needs of the customer. At select branches, you can buy or sell foreign currency notes. The bank handles major currencies such as:

• US Dollar (USD)
• British Pound (GBP)
• Euro (EUR)
• Japanese Yen (JPY)
• Hong Kong Dollar (HKD)
• Australian Dollar (AUD)
• Canadian Dollar (CAD)
• Swiss Franc (CHF)
• Singapore Dollar (SGD)
• UAE Dirham (AED)

If you're an existing IDBI Bank customer, you can also encash traveler's cheques in these currencies at the same branches.

For foreign remittances, IDBI uses different settlement options:

• Cash settlements: Same day (T+0)
• Tom (Tomorrow): Next day (T+1)
• Spot: Two days (T+2)

IDBI Bank also lets you transfer money online through its FX-Remit service. You can send money abroad for purposes like education, family support, or consultancy fees. The transfer process is paperless, quick, and can be done from home. But the limit is up to USD 25,000 (or equivalent) per transaction.

On top of that, IDBI also has an FX-Retail platform, where you can trade USD/INR directly.

IDBI Bank applies different charges depending on whether you are sending money abroad, exchanging notes, or using a forex card. These charges mainly fall under TT Buy/Sell rates, Forex Card Buy/Sell, and Cash/Notes exchange via treasury.

1. Exchange rates

IDBI Bank publishes daily buy and sell rates for major currencies. These rates vary depending on the mode of transaction:

• TT (Telegraphic Transfer) Buy/Sell rates: Used for wire transfers.
• Bill/Card Buy/Sell rates: Used when transactions involve forex cards or bills.
• Currency Buy/Sell rates: Used for physical notes exchanged at the branch.

*JPY rates are quoted per 100 units.

IDBI's foreign exchange rates are not fixed and can change with the market.

2. FX-Retail platform charges

If you use the FX-Retail platform for USD/INR transactions, the fees are:

3. World Currency Card fees

IDBI also issues a World Currency Card (WCC) and a Global Currency Card (GCC). These are prepaid cards you can load with foreign currencies for international use. They support eight major currencies - AED, AUD, CAD, EUR, JPY, GBP, SGD, and USD.

When you look up the value of a currency online, the number you see is the mid-market exchange rate benchmark. This is the average rate between the buy and sell prices of two currencies in the global market. In other words, it is the 'true' exchange rate that banks use when they trade with each other.

But this is not the same rate you will get from IDBI Bank. Or any other bank, for that matter. Why? Because banks always add a markup to the mid-market rate. This markup helps them cover costs and protect themselves from risks.

Here are some reasons why IDBI's foreign exchange rates are different from what you see online:

• Operating costs: IDBI has to maintain branches, staff, and systems for handling foreign exchange. The markup helps recover these costs.
• Currency risks: Since exchange rates are always fluctuating, adding a markup helps the bank ensure it doesn't lose money if the currency value moves between the time of transaction and settlement.
• Unpredictable currencies: For less common or volatile currencies, IDBI may charge a higher markup. This cushions them against sudden changes in value.
• Inflation expectations: If the bank expects a currency to weaken over time, it adjusts its rate to keep the margin intact.

Let's understand this with an example.

Say the mid-market rate for 1 USD is INR 87.50. If IDBI Bank's USD to INR exchange rate includes a 3% markup, the rate you get may be around INR 90. This means if you send $1,000, you'd pay roughly ₹2,500 more than if you had used the mid-market rate.

The effective exchange rate takes into account a group of currencies. Then, it assigns a weight to each, depending on how important that country is in trade. This gives a more accurate picture of how one currency is performing overall.

For example, suppose India does 60% of its trade with the United States, 30% with the United Kingdom, and 10% with Russia. The US dollar then carries 60% of the weight. The British pound has 30%, and the Russian ruble makes up the remaining 10%.

If the rupee weakens against the dollar, it will have a bigger effect on the effective rate than a change in the ruble.

Foreign exchange rates are always changing. For businesses dealing with international payments, knowing the rate in real time can help manage risk, plan better, make informed decisions, and enjoy transparency.

• Managing risk: A small change in the rate can mean a big gain or loss when large amounts are involved. Watching rates as they move allows businesses to act at the right time.
• Better planning: Businesses can select the right time to pay overseas suppliers or receive payments. This helps control costs and protect profits.
• Pricing decisions: Exporters and importers often set prices in advance. Real-time rates let them adjust quickly if currencies change.
• Transparency: With real-time rates, you know exactly what you will pay or receive.

IDBI Bank provides transparent rates for all its forex services - currency exchange, FX-Remit, FX-Retail, and forex cards. You can check these charges directly on IDBI Bank's official website.

But remember that these rates change constantly based on market rates. So, make sure you're looking at the updated numbers.

You can also call the bank's customer support to know the current rates or visit an IDBI Bank branch.

When it comes to cross-border payments, Xflow offers more benefits over IDBI Bank's forex rates.

For starters, it doesn't have any hidden spreads or surprise deductions, ensuring your profits remain intact. Secondly, Xflow's exchange rates are linked to mid-market benchmarks. This means you always know the exact INR amount that will reach your account.

Other benefits of using Xflow include:

• Quick settlements within one business day.
• Customers can use local transfers, which are cheaper than international wires.
• You can withdraw any amount, anytime, without limits.
• Every withdrawal comes with a free FIRA issued by an RBI-authorized bank.

Xflow makes cross-border payments a lot more convenient without the extra fees. Sign up today to experience the convenience yourself.

If you're constantly dealing with overseas money transfers, it's important to be aware of IDBI Bank's forex card rates, so you know exactly what to expect. At the same time, it's also smart to explore more cost-effective options like Xflow. They offer better rates and are 100% transparent.

Comparing these options will help you find one that gives you the most value for your money.