Real Reason & Impact Of Exchange Controls

[nokia]

dear folks,

I've been thinking since it's so troublesome to get the onshore rates for wire transfers into the mighty Baht,

who is the real gainer, the bank or the government, for every offshore rate remitted?

Besides the reason of exchange controls, is this another reason? To tax the many residents who dont pay taxes directly to the state coffers besides the 7% VAT in goods & services?

And what will the impact be? Will the affected residents continue to disgruntle on the forum or will they take positive action to relocate to neighbouring countries? Will Thailand again implement another new ruling that money can be only remitted to Thailand in Thai Baht, rather than in your home currency?

[sonicdragon]

It is not troublesome to get the onshore rate for wire transfers if you follow simple directions.

Who knows what the powers that be will do next, but in my opinion exchange controls in general could become more prevalent throughout the world in years to come, if imbalances in global trade continue, so it wouldn't shock me if they implemented something as ludicrous as you suggest for non-trade and non-investment (it would surprise me though).

[Maestro]

...since it's so troublesome to get the onshore rates for wire transfers into the mighty Baht...

What, exactly, do you find troublesome? I have not seen the payment order form of the bank of the person who transferred money to the OP. Have you seen it?

From what the OP has told us, the sender would have had to tick a box on the form to indicate that he wants GBP sent. Is it this, ticking a box, that you find troublesome?

I could argue, though, that the default, ie when no box is ticked, should not be THB. Ideally, the default should be the currency of the sender’s account; my Swiss bank does it this way. But it depends on the conditions set up by the bank, I guess.

On the other hand, traditionally foreign remittances are made by businesses, eg importers, and most likely suppliers invoice in their home currency. From this point of view it makes sense that the default currency on the payment order form should be the currency of the recipient’s country. In a way, whichever default the bank sets it can’t do it right for everybody.

What I find unusual with what I have read on this forum about British banks’ payment order forms is that apparently on one part of the form you write the amount you want to remit, eg GBP 2,754.00, and on another part you tick a box to select whether you want the remittance to be made in GBP or in the currency of the recipient’s country. It would be better if there were only one instruction to give: either “send GBP 2,754.00”, or “send THB 175,000.00”.

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Maestro

[soundman]

I could argue, though, that the default, ie when no box is ticked, should not be THB. Ideally, the default should be the currency of the sender's account; my Swiss bank does it this way. But it depends on the conditions set up by the bank, I guess.

Maestro,

Some Australian banks I have dealt with really push for you to make the currency exchange on their end rather than sending in Australian Dollars. Obviously they want to make their (substancial) commisions on their end.

When banking electronically & remitting to other countries it is quite hard to find the particular "button" to send in Australian $ rather than the destination country's currency It is almost like they don't want you to find it.

Cheers,

Soundman.

[nokia]

sonicdragon & maestro,

Well, my meaning of "troublesome" means more of a confusion, esp for newbies, first timers & those who do not look at the remittance form carefully, and simply telling the bank's remittance clerk "convert to baht in thai bank account", without specifying pls remit in home currency, then covert later. It's not a nice feeling to find out that you have gotten the 7-10% less from the offshore rate.

[Maestro]

...When banking electronically & remitting to other countries it is quite hard to find the particular "button" to send in Australian $ rather than the destination country's currency It is almost like they don't want you to find it.

I kind of suspect the same to be true for the British banks related to the cases posted by members. To say “change your bank” would be useless because they all probably use the same system within a country. The banking system in Britain and in other countries who adopted that system may, for all I know, be good in many ways but I have the impression that when it comes to online banking there is much room for improvement.

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Maestro

[Penkoprod]

On a side issue (talking of British banks) there are STRONG rumours that "free banking" is about to end

I know this rumour rears its ugly head from time to time, but i think THIS time they mean it !!!!!!

All those with Nationwide had better make hay while the sun shines, methinks

One such story (from many i have seen this past 2 weeks or so) linked below

http://www.telegraph.co.uk/news/main.jhtml...5/nbanks105.xml

Penkoprod

[Maestro]

On a side issue (talking of British banks) there are STRONG rumours that "free banking" is about to end

Perhaps this will bring about genuine competition among banks. At present, from what I have seen, all banks, including Nationwide, charge a fee ranging form GBP 18 to GBP 22 for an online payment order for a foreign remittance. As this is all computerised, or at lest should be, there is really no reason for such a high fee; GBP 2 should be more than enough. It is normal that fees should be based on the amount of work involved. There should not be excessive overdraft fees to cover the expense of other services.

Genuine competition among banks, if it ever comes about, will force banks to find more efficient ways to operate in order to be able to offer their services at lower rates.

It just occurred to me: many British banks do not even accept online payment orders for foreign remittances. You have to bring the form to the bank, where it will be processed manually. This is just one of many areas where they can improve efficiency. But don’t hold your breath while waiting for it.

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Maestro