Money Exchange Rip Off

[opengoal]

In the last 12 months I have received three lots of money into my Thai bank acc from the ???????? bank in Australia. As most regulars here will be aware it is always financially beneficial to have aussie $s sent here and then changed to baht at this end. This happened with the first amount,my mistake bcos I did not check the second amount and they changed it in Aus and sent me baht. When I received the third amount it was approx 5 baht less to the dollar which immediatley got my attention.

Unfortunately my brother who sent the monies did not know about sending dollars here but you can bet the bank did. By changing to baht at the aussie end it has cost me approx $1100 or should we say the bank made another $1100 profit. This bank made $4,000,000,000 profit last year. Now theres making profit and there is obscenity and this is obscene!!

After being sent around the loop for one week we arrived at the area manager who ' investigated' my case. His judgement is that the bank tellers offered my brother the choice ( bullsh1t). When we told him of the manure he was speaking his response was that my brother was asked to check the details on the payment slip. My brother checked his details and my details but the area manager said that by signing the slip he had accepted the rate. That is all well and good if they explain your options before you choose how to send the money, which they did not.

This raises 2 pouints to me

Are staff poorly trained or maybe more appropriately are they well trained and do the tellers receive commission on foreign exchange transactions

Unlike selling mortgages,where there is a government code of practice, there appears to be a loophole in foreign exchange which all banks appear to abuse at will and to which you have no recourse.

As he can not decide who is at fault he has offered me $550( half what they stole) but my brother must sign a document, which he as yet to see. If we do not accept this the manager told us the bank will wash its hands of our case and we will have to pursue it thru other channels (does he mean the banking ombudsman... your having a laugh,who pays his wages).

How many Australians send money here and how many Thai wives send money back here and do not realise any of the above. How many millions are they making by not giving the service you pay for, which is to be informed.

Which all brings me to the questions I want to ask. Has anybody here encountered this problem. If so what is contained in the letter. What was the outcome of your complaint. If you have anything valuable to add to this thread I would be very grateful for any info. Also I would urge all people sending money from Aus to double check how there money was sent. You never know xmas may come early.Anybody wanting to know the bank please pm me

[Maestro]

Opengoal, you do not say what your brother asked to be sent to your account.

If your brother walked into the bank and aksed for a transfer of, for example, THB 500,000 it is reasonable to expect that the bank would send that THB amount, convert it into AUD, and collect the corresponding AUD amount from your brother.

If he asked to tranfer, for example, AUD 2,000, it would be reasonable to expect that the bank transfers AUD 2,000 and the conversion would be made in Thailand by your Thai bank.

If you sent your brother an email to ask for the transfer, look up that email and check what exactly you asked him to do.

--

Maestro

[simcity]

opengoal

i get transfer every 5 weeks, the bank all the time try to send bath to Thailand , they know what they doing " RIP YOU OFF "

You need to be very firm of dealing with them, demand Australia dollars to be sent!

They will sent Baht if you do not do it, at time I got like a strange face in front as it was not possible !

Once they ask if I have a bank account with them to do that .

I ask the same person to send me the TT everytime, and bring the precedent paper with all information , not to have this problem.

Australian bank are notorious for over fees.

Good luck on your claim !

[Niloc]

I am currently in the process of transmitting a large amount from Australia. The bank I use has a 'copy' facility on its overseas SWIFT transfer page and it is about 5 keystrokes to make the transfer. Once you have made the first transfer successfully you just keep copying it, assuming you are always sending it to the same girl!!

[bendix]

Maybe I'm missing the point here, but how is the bank profiting by sending the money in Baht? All that's happening is that you aren't profiting.

The bank will buy convert your Australian dollars at whatever Baht rate is applicable in Australia at the time - they don't 'pocket' any difference which may or may not result from the temporary dual rate regime.

Sounds to me like your brother screwed up. I'd be angry with him, not the bank.

There is no material advantage to them of converting, say, $20,000 into Baht in Australia, or sending it to Thailand as dollars. Either way, only $20,000 moves from their coffers.

[Briggsy]

Maybe I'm missing the point here, but how is the bank profiting by sending the money in Baht? All that's happening is that you aren't profiting.

The bank will buy convert your Australian dollars at whatever Baht rate is applicable in Australia at the time - they don't 'pocket' any difference which may or may not result from the temporary dual rate regime.

Sounds to me like your brother screwed up. I'd be angry with him, not the bank.

There is no material advantage to them of converting, say, $20,000 into Baht in Australia, or sending it to Thailand as dollars. Either way, only $20,000 moves from their coffers.

Bendix, I believe you are talking about the difference between the offshore and onshore rate.

I believe the OP may be talking about the difference between the "tourist rate" available to the bank's personal account holders and the market rates. If Australia is similar to the UK the difference can be very significant and the bank is clearly profiting. Or he may well be referring to a combination of the 2 differences mentioned above which will work together to compound his "loss".

I agree with you that his brother made an expensive cock-up and the OP is trying it on to undo his brother's error. I'd take the bank's offer if I were him.

[chiangmaibruce]

hi. i have made many such transfers from Australia to Thailand - initially in baht and then (when I knew better) in AUD. I lost plenty of money in the process but don't blame the bank for not telling me how to save money (and in the process losing profits themselves). This is not something I would expect any oz bank to do - ever. If they are offering you any money back I would take it - quickly.

when I first learnt (from Oz friends) that you could transfer in AUD I was surprised, I had always just assumed that a thai bank would only accept thai currency. My first step was to contact my thai bank (head office) and ask whether I could transfer AUD into my thai account - and they quite clearly said no i could not. this discussion was undertaken by my (thai) wife, so language misunderstanding was not an issue. Accordingly it is even possible that your oz bank was not aware that your thai bank would even accept AUD transfers.

anyway i asked around more oz friends and learnt that several thai banks were accepting AUD transfers, so I said "hel_l, i'll give it a go and see what happens". And I did, and no problems at all. Further, I confirmed that the currency conversion rate offered by the thai bank was substantially better than that offered by the oz bank. so they were biting me with the transfer fee as well as a bad exchange rate.

Hence it DOES make a difference to the Oz bank whether they transfer in baht or AUD as with the former, they get two bites at the cherry.

There then followed several email exchanges with my bank about why (in a global economy etc etc) they were providing such widely different exchange rates compared to what a bank in Thailand could offer. i got nonsense replies, and gave up. In fact I might take another look at those emails and (if they shed any fresh light on the topic) may post them here.

C.B

[PCA]

Maybe I'm missing the point here, but how is the bank profiting by sending the money in Baht? All that's happening is that you aren't profiting.

The bank will buy convert your Australian dollars at whatever Baht rate is applicable in Australia at the time - they don't 'pocket' any difference which may or may not result from the temporary dual rate regime.

Sounds to me like your brother screwed up. I'd be angry with him, not the bank.

There is no material advantage to them of converting, say, $20,000 into Baht in Australia, or sending it to Thailand as dollars. Either way, only $20,000 moves from their coffers.

yeah, you are missing the point. The Australian bank is cashing in the difference.

[AmericanGuy1066]

Maybe I'm missing the point here, but how is the bank profiting by sending the money in Baht? All that's happening is that you aren't profiting.

The bank will buy convert your Australian dollars at whatever Baht rate is applicable in Australia at the time - they don't 'pocket' any difference which may or may not result from the temporary dual rate regime.

Sounds to me like your brother screwed up. I'd be angry with him, not the bank.

There is no material advantage to them of converting, say, $20,000 into Baht in Australia, or sending it to Thailand as dollars. Either way, only $20,000 moves from their coffers.

yeah, you are missing the point. The Australian bank is cashing in the difference.

How do you think the Australian bank does that?

The basic issue is there is an offshore and onshore rate. You get more baht if you change your AUD in Thailand. Why does this difference occur? Because there are various capital controls and restrictions that stop people moving large amounts of mony into/out of the country. If the Aus bank sends AUD then it doesn't need to square it's foreign currency position. If it sends THB (using the offshore rate which is worse) in all likelihood it would have to square its THB position, (or put another way replace the THB it sold). To do this the Aus bank in Aus will have to buy back at the offshore rate in THB. Hence the Aus bank doesn't "cash in".

It would only be able to cash in, if it could sell at offshore rates, and buy at onshore rates. It can't buy at onshore rates in Australia, because by definition Australia is offshore for THB. It also can't do this to any significant degree because of capital controls set by Bank of Thailand.

Back to OP. Sounds like your brother f****d up. Your bank is being very generous.

Edited November 4, 2007 by AmericanGuy1066

[samran]

Maybe I'm missing the point here, but how is the bank profiting by sending the money in Baht? All that's happening is that you aren't profiting.

The bank will buy convert your Australian dollars at whatever Baht rate is applicable in Australia at the time - they don't 'pocket' any difference which may or may not result from the temporary dual rate regime.

Sounds to me like your brother screwed up. I'd be angry with him, not the bank.

There is no material advantage to them of converting, say, $20,000 into Baht in Australia, or sending it to Thailand as dollars. Either way, only $20,000 moves from their coffers.

yeah, you are missing the point. The Australian bank is cashing in the difference.

How do you think the Australian bank does that?

The basic issue is there is an offshore and onshore rate. You get more baht if you change your AUD in Thailand. Why does this difference occur? Because there are various capital controls and restrictions that stop people moving large amounts of mony into/out of the country. If the Aus bank sends AUD then it doesn't need to square it's foreign currency position. If it sends THB (using the offshore rate which is worse) in all likelihood it would have to square its THB position, (or put another way replace the THB it sold). To do this the Aus bank in Aus will have to buy back at the offshore rate in THB. Hence the Aus bank doesn't "cash in".

It would only be able to cash in, if it could sell at offshore rates, and buy at onshore rates. It can't buy at onshore rates in Australia, because by definition Australia is offshore for THB. It also can't do this to any significant degree because of capital controls set by Bank of Thailand.

Back to OP. Sounds like your brother f****d up. Your bank is being very generous.

Agree, bank is not cashing in, apart from getting commission on the deal. If you ask to send THB from Australia, then it is the bank who has to enter the offshore market to purchase baht at the going rate.

[PCA]

Maybe I'm missing the point here, but how is the bank profiting by sending the money in Baht? All that's happening is that you aren't profiting.

The bank will buy convert your Australian dollars at whatever Baht rate is applicable in Australia at the time - they don't 'pocket' any difference which may or may not result from the temporary dual rate regime.

Sounds to me like your brother screwed up. I'd be angry with him, not the bank.

There is no material advantage to them of converting, say, $20,000 into Baht in Australia, or sending it to Thailand as dollars. Either way, only $20,000 moves from their coffers.

yeah, you are missing the point. The Australian bank is cashing in the difference.

How do you think the Australian bank does that?

The basic issue is there is an offshore and onshore rate. You get more baht if you change your AUD in Thailand. Why does this difference occur? Because there are various capital controls and restrictions that stop people moving large amounts of mony into/out of the country. If the Aus bank sends AUD then it doesn't need to square it's foreign currency position. If it sends THB (using the offshore rate which is worse) in all likelihood it would have to square its THB position, (or put another way replace the THB it sold). To do this the Aus bank in Aus will have to buy back at the offshore rate in THB. Hence the Aus bank doesn't "cash in".

It would only be able to cash in, if it could sell at offshore rates, and buy at onshore rates. It can't buy at onshore rates in Australia, because by definition Australia is offshore for THB. It also can't do this to any significant degree because of capital controls set by Bank of Thailand.

Back to OP. Sounds like your brother f****d up. Your bank is being very generous.

Agree, bank is not cashing in, apart from getting commission on the deal. If you ask to send THB from Australia, then it is the bank who has to enter the offshore market to purchase baht at the going rate.

very wrong, bank is cashing in. Lazy to argue here.

[sonicdragon]

The bank is not "cashing in" in the sense of profiting from the difference in the onshore/offshore rates - as bendix pointed out. However, one of the reasons that they will do this (make the conversion offshore) unless you specify otherwise is partly because they have some vbery cozy relationships with their correspondent banks (who in some cases are their afiliates) where they give each other 2 way business thereby increasing their fees, and also in the exchange rates that they obtain on your behalf. These are very small sums in comparison to the onshore/offshore rates, but when you consider the volume of business that they do overall, it becomes very large.

[PCA]

The bank is not "cashing in" in the sense of profiting from the difference in the onshore/offshore rates - as bendix pointed out. However, one of the reasons that they will do this (make the conversion offshore) unless you specify otherwise is partly because they have some vbery cozy relationships with their correspondent banks (who in some cases are their afiliates) where they give each other 2 way business thereby increasing their fees, and also in the exchange rates that they obtain on your behalf. These are very small sums in comparison to the onshore/offshore rates, but when you consider the volume of business that they do overall, it becomes very large.

you are talking about theory. The Australian bank did not even do the transaction yet (changing back). They can do this anytime later. Its just in their books. And they get the profit what the OP is losing the sooner or the later. The full ammount difference is cashed in by those two banks. Shared or only by the Australian bank.

Anyway believe what you want.

[chiangmaibruce]

As per my original post, here now follows emails to and from my bank concerning this transfer + rate variation issue. By way of explanation, this series of emails was sent just before I found out that I did in fact have the option to transfer in AUD (not Thai baht). Once I discovered that, then further discussion with ‘Ozbank’ became (even more) pointless and so I dropped the matter.

I am certainly no expert in forex but american guy et al may well have a point. If so, and there is no profit motive for having their customers transfer in Thai baht, then this certainly raises the issue of whether the banks need to do a better job of explaining this situation so that customers can make an informed decision (even if only from a good P.R perspective). Also, I am not sure whether the variation in offshore and onshore rates was as significant in Dec 06 as it is today - perhaps someone could clarify this.

Original email from CB to OzBank (12/06)

I am writing to complain about the poor exchange rates provided by ozbank in relation to overseas TT. I note today for example that to send a transfer from Australia to Thailand I will only be accorded a rate of 26.48baht/$ PLUS the $22 fee. In comparison the rate today (Thai Bank) is a note buying rate of 28.02baht/$ or the selling rate for TT to Australia is 28.915baht/$. It's bad enough to offer a lousy exchange rate but then to levy the $22 fee is fairly greedy. I am otherwise satisfied with ozbank’s services but this is the "pits" and I call on you to review and amend this policy.

Original response from OzBank to CB

We refer to your message … advising us to confirm on the exchange rate and the fees levied on your International Payments.

Please note that the exchange rate that is used for International payments is the exchange rate that prevails at that particular point of time as per the global market and it is guarded by external factors as well, on which we do not have control. We hope that you agree with the same….

As stated in the Terms and Conditions for these products, there may be additional costs levied by overseas banks involved in processing these transactions.

Email 2 from CB

Thanks for the note but the exchange rate used by ozbank is NOT the prevailing exchange rate for general exchange - that is the point of my note. It appears to be about 1.5% LESS than the prevailing rate (and now I see that the rate is question has been further decreased so it is closer to 2% less). Thus to transfer $10,000 from Australia to Thailand (before the latest change in rates) will cost me approx $172 for what would appear to be a largely electronic transaction with minimal human input. Your further advice would be appreciated, together with any advice regarding a more reasonable/economical way for me to transfer funds.

Email 2 from OzBank

Please note that the exchange rate that is used for International payments is the exchange rate that prevails at that particular point of time as per the global market and it is guarded by external factors as well, on which we do not have control. We hope that you agree with the same.

With regard to the charges, irrespective of the amount, ozbank charges AUD 22.00 for each International Payment and AUD 15.00 for each International Draft.

As stated in the Terms and Conditions for these products, there may be additional costs levied by overseas banks involved in processing these transactions. Page 12 in the following link for fees and charges for international transactions.

http://www.ozbank.com/australia/aboutozbank/feesandrates/

You may clarify the Foreign exchange rates on our website www.ozbank.com by selecting the Rates, Fees and Charges link on the bottom left hand side of the page.

Email 3 from CB

With respect, you have not read my query. Please pass this message on to your supervisor so that I can receive an adequate response.

Just to be clear my query concerns the exchange rate offered by ozbank for internet transfers.

I just ran through the process then and the rate offered by ozbank for a transfer was only 25.928 baht/AUD. At a bank in thailand today I handed in AUD$100 and was given the rate 27.83baht/dollar (this was until today around 28baht/AUD). You do the math on converting AUD$10,000 and then add the $22 fee. This is not a good deal for an electronic transaction, and while both the rate used and the fee are set by ozbank based on the global rate, there is then a healthy profit margin thrown in. I look forward to receiving your considered response.

Email 3 from Ozbank

We refer to your message … advising us to confirm on the exchange rate and the fees levied on your International Payments.

Please note that the exchange rate that is used for International payments is guarded by many external factors, on which we do not have control. Please also note that there are different kinds of rates applicable for International Payments in various currencies. There is a selling rate and a buying rate for a particular currency at any given point in time in the global market. Whilst the selling rate may look cheaper than the buying rate for a particular currency, it purely is market based.

We hope that you understand these external factors involved in determining the exchange rate of a particular currency at a given time.

Email 4 from CB

Please forward this series of emails to the OZBANK Customer relations section as you (& your colleagues) seem to be missing the point of my email.

My original email was not to confirm the rate at all - it was to protest the variation between the rate I can get in thailand and the rate offered by OZBANK for international transfers (around a 1.9% variation plus a fee of $22). For a transfer of $10,000 this amounts to more than a $700 difference!!! As noted this impost is for a purely electronic transaction. The variation between the standard exchange rate (ie. for buying and selling cash) and the rate used for electronic transfers is set by OZBANK not by global forces as you keep trying to say. If this were not the case then the rates offered by Bangkok Bank would be the same as OZBANK's - and as stated they certainly are not.

I would like this complaint taken up by your customer relations people with a view to amending this policy. I look forward to that group's response.

Email 4 from Ozbank

We refer to your message … advising us to confirm on the exchange rate and the fees levied on your International Payments.

Please note that the Australian Bank exchange rates are set by the Reserve Bank in relation to how the market is placed on a particular day. All other Banks around the world would have their rates also set depending on their market and Government guidelines, this is why there is a difference between the Banks around the world. Notes and TT's, buying and selling rates always differ as our Bank needs to sell this currency back to the market or buy the currency from the Market.

If you wish to take this issue further with our Customer Response Centre, please email - [email protected] as outlined in the Terms and conditions of use.

[sonicdragon]

The bank is not "cashing in" in the sense of profiting from the difference in the onshore/offshore rates - as bendix pointed out. However, one of the reasons that they will do this (make the conversion offshore) unless you specify otherwise is partly because they have some vbery cozy relationships with their correspondent banks (who in some cases are their afiliates) where they give each other 2 way business thereby increasing their fees, and also in the exchange rates that they obtain on your behalf. These are very small sums in comparison to the onshore/offshore rates, but when you consider the volume of business that they do overall, it becomes very large.

you are talking about theory. The Australian bank did not even do the transaction yet (changing back). They can do this anytime later. Its just in their books. And they get the profit what the OP is losing the sooner or the later. The full ammount difference is cashed in by those two banks. Shared or only by the Australian bank.

Anyway believe what you want.

It's not a question of what I believe. I worked in international banking for 10 years so I have some experience of the internal operations of banks. The australian bank took australian dollars from the customer and exchanged them for baht with their counterparty at the offshore rate. That baht was then remitted to the receiving bank in thailand. It's as simple as that. There is no "cashing in" between the onshore/offshore rates.

[PCA]

The bank is not "cashing in" in the sense of profiting from the difference in the onshore/offshore rates - as bendix pointed out. However, one of the reasons that they will do this (make the conversion offshore) unless you specify otherwise is partly because they have some vbery cozy relationships with their correspondent banks (who in some cases are their afiliates) where they give each other 2 way business thereby increasing their fees, and also in the exchange rates that they obtain on your behalf. These are very small sums in comparison to the onshore/offshore rates, but when you consider the volume of business that they do overall, it becomes very large.

you are talking about theory. The Australian bank did not even do the transaction yet (changing back). They can do this anytime later. Its just in their books. And they get the profit what the OP is losing the sooner or the later. The full ammount difference is cashed in by those two banks. Shared or only by the Australian bank.

Anyway believe what you want.

It's not a question of what I believe. I worked in international banking for 10 years so I have some experience of the internal operations of banks. The australian bank took australian dollars from the customer and exchanged them for baht with their counterparty at the offshore rate. That baht was then remitted to the receiving bank in thailand. It's as simple as that. There is no "cashing in" between the onshore/offshore rates.

hmm, I have never worked in a bank but for banks eventually and hold accounts in 11 different countries. And its a matter of what you believe seemingly and not what you know or ever have done. If you are still working in a bank or any other financial institute then ask your manager to ask his manager and they will not give you an answer which is the answer I gave to the OP.

[sonicdragon]

The bank is not "cashing in" in the sense of profiting from the difference in the onshore/offshore rates - as bendix pointed out. However, one of the reasons that they will do this (make the conversion offshore) unless you specify otherwise is partly because they have some vbery cozy relationships with their correspondent banks (who in some cases are their afiliates) where they give each other 2 way business thereby increasing their fees, and also in the exchange rates that they obtain on your behalf. These are very small sums in comparison to the onshore/offshore rates, but when you consider the volume of business that they do overall, it becomes very large.

you are talking about theory. The Australian bank did not even do the transaction yet (changing back). They can do this anytime later. Its just in their books. And they get the profit what the OP is losing the sooner or the later. The full ammount difference is cashed in by those two banks. Shared or only by the Australian bank.

Anyway believe what you want.

It's not a question of what I believe. I worked in international banking for 10 years so I have some experience of the internal operations of banks. The australian bank took australian dollars from the customer and exchanged them for baht with their counterparty at the offshore rate. That baht was then remitted to the receiving bank in thailand. It's as simple as that. There is no "cashing in" between the onshore/offshore rates.

hmm, I have never worked in a bank but for banks eventually and hold accounts in 11 different countries. And its a matter of what you believe seemingly and not what you know or ever have done. If you are still working in a bank or any other financial institute then ask your manager to ask his manager and they will not give you an answer which is the answer I gave to the OP.

I'm not really sure what that is supposed to mean - can you clarify ? Perhaps I am just being obtuse ?

You seem to be implying that somewhere in the process the australian bank has utilised the onshore rate, but only given the customer the offshore rate, and has somehow kept the difference ? If you think about that for more than just a few seconds you should realise that it is not possible - such financial alchemy is beyond the scope of even the most brilliant minds in banking. The other alternative is that they in fact remitted the funds in baht and lied to the customer, getting the onshore rate but only giving the customer the offshore rate, which would be fraud on the part of the bank - a simple inspection of the telex/wire/cable/swift instruction at each side of the transaction (the receiving bank and also the australian bank) would quickly identify that this is not the case.

In fact I would suggest to the customer to get a copy of the outward telex from the australian bank and the inward telex from the thai bank and all should become very clear.

It seems to me that the fault here lies with the customer - although you can easily view this as being taken advantage of by very opaque banking practices. If more countries had an onshore/offshore rate then I'm sure that this would come to the attention of the relevent regulatory body very quickly and something would be done about it. But the fact is that very few countries have this situation and so it is irrelevant in the majority of cross border funds transfers.

If I were the OP I would accept the bank's offer of a partial refund of the loss/ Frankly I'm surprised that they even offered that.

[Niloc]

If it is any help. I transferred 5K AUD last week and I got 31.0496 baht to the dollar, the lowest I got was 30.9648. These were SWIFT Transfers through WBC and the fee was $20 for each transfer.

Colin

[PCA]

The bank is not "cashing in" in the sense of profiting from the difference in the onshore/offshore rates - as bendix pointed out. However, one of the reasons that they will do this (make the conversion offshore) unless you specify otherwise is partly because they have some vbery cozy relationships with their correspondent banks (who in some cases are their afiliates) where they give each other 2 way business thereby increasing their fees, and also in the exchange rates that they obtain on your behalf. These are very small sums in comparison to the onshore/offshore rates, but when you consider the volume of business that they do overall, it becomes very large.

you are talking about theory. The Australian bank did not even do the transaction yet (changing back). They can do this anytime later. Its just in their books. And they get the profit what the OP is losing the sooner or the later. The full ammount difference is cashed in by those two banks. Shared or only by the Australian bank.

Anyway believe what you want.

It's not a question of what I believe. I worked in international banking for 10 years so I have some experience of the internal operations of banks. The australian bank took australian dollars from the customer and exchanged them for baht with their counterparty at the offshore rate. That baht was then remitted to the receiving bank in thailand. It's as simple as that. There is no "cashing in" between the onshore/offshore rates.

hmm, I have never worked in a bank but for banks eventually and hold accounts in 11 different countries. And its a matter of what you believe seemingly and not what you know or ever have done. If you are still working in a bank or any other financial institute then ask your manager to ask his manager and they will not give you an answer which is the answer I gave to the OP.

I'm not really sure what that is supposed to mean - can you clarify ? Perhaps I am just being obtuse ?

You seem to be implying that somewhere in the process the australian bank has utilised the onshore rate, but only given the customer the offshore rate, and has somehow kept the difference ? If you think about that for more than just a few seconds you should realise that it is not possible - such financial alchemy is beyond the scope of even the most brilliant minds in banking. The other alternative is that they in fact remitted the funds in baht and lied to the customer, getting the onshore rate but only giving the customer the offshore rate, which would be fraud on the part of the bank - a simple inspection of the telex/wire/cable/swift instruction at each side of the transaction (the receiving bank and also the australian bank) would quickly identify that this is not the case.

In fact I would suggest to the customer to get a copy of the outward telex from the australian bank and the inward telex from the thai bank and all should become very clear.

It seems to me that the fault here lies with the customer - although you can easily view this as being taken advantage of by very opaque banking practices. If more countries had an onshore/offshore rate then I'm sure that this would come to the attention of the relevent regulatory body very quickly and something would be done about it. But the fact is that very few countries have this situation and so it is irrelevant in the majority of cross border funds transfers.

If I were the OP I would accept the bank's offer of a partial refund of the loss/ Frankly I'm surprised that they even offered that.

yeah I believe that you are.

[sonicdragon]

The bank is not "cashing in" in the sense of profiting from the difference in the onshore/offshore rates - as bendix pointed out. However, one of the reasons that they will do this (make the conversion offshore) unless you specify otherwise is partly because they have some vbery cozy relationships with their correspondent banks (who in some cases are their afiliates) where they give each other 2 way business thereby increasing their fees, and also in the exchange rates that they obtain on your behalf. These are very small sums in comparison to the onshore/offshore rates, but when you consider the volume of business that they do overall, it becomes very large.

you are talking about theory. The Australian bank did not even do the transaction yet (changing back). They can do this anytime later. Its just in their books. And they get the profit what the OP is losing the sooner or the later. The full ammount difference is cashed in by those two banks. Shared or only by the Australian bank.

Anyway believe what you want.

It's not a question of what I believe. I worked in international banking for 10 years so I have some experience of the internal operations of banks. The australian bank took australian dollars from the customer and exchanged them for baht with their counterparty at the offshore rate. That baht was then remitted to the receiving bank in thailand. It's as simple as that. There is no "cashing in" between the onshore/offshore rates.

hmm, I have never worked in a bank but for banks eventually and hold accounts in 11 different countries. And its a matter of what you believe seemingly and not what you know or ever have done. If you are still working in a bank or any other financial institute then ask your manager to ask his manager and they will not give you an answer which is the answer I gave to the OP.

I'm not really sure what that is supposed to mean - can you clarify ? Perhaps I am just being obtuse ?

You seem to be implying that somewhere in the process the australian bank has utilised the onshore rate, but only given the customer the offshore rate, and has somehow kept the difference ? If you think about that for more than just a few seconds you should realise that it is not possible - such financial alchemy is beyond the scope of even the most brilliant minds in banking. The other alternative is that they in fact remitted the funds in baht and lied to the customer, getting the onshore rate but only giving the customer the offshore rate, which would be fraud on the part of the bank - a simple inspection of the telex/wire/cable/swift instruction at each side of the transaction (the receiving bank and also the australian bank) would quickly identify that this is not the case.

In fact I would suggest to the customer to get a copy of the outward telex from the australian bank and the inward telex from the thai bank and all should become very clear.

It seems to me that the fault here lies with the customer - although you can easily view this as being taken advantage of by very opaque banking practices. If more countries had an onshore/offshore rate then I'm sure that this would come to the attention of the relevent regulatory body very quickly and something would be done about it. But the fact is that very few countries have this situation and so it is irrelevant in the majority of cross border funds transfers.

If I were the OP I would accept the bank's offer of a partial refund of the loss/ Frankly I'm surprised that they even offered that.

yeah I believe that you are.

Are you in "hidden meaning" mode today ? I'm struggling to understand, and that doesn't clarify anything to me......

[samran]

Agree, bank is not cashing in, apart from getting commission on the deal. If you ask to send THB from Australia, then it is the bank who has to enter the offshore market to purchase baht at the going rate.

very wrong, bank is cashing in. Lazy to argue here.

The only proof that i have (and I beleive I need) is that that two rates still exist. If it was possible for someone to make make money off the differential rates, then the difference between the offshore and the onshore rate would have been arbitraged away in oh, about, 0.00000003 of a second*. The banks wouldn't have even waited for the poor brother of the OP to stuff up his wire transfer for him, it would have happened automatically somewhere else, many moons ago.

*nb: I've got a very smart mate working in the City who is a bit of a financial gun and a good programmer to boot. He and a few mates will at various times be looking to work on applications which will decrease the arbitrage time on various products to say 0.00000002 of a second, make their bank lots of money, and then get nice hefty bonuses at the end of the year. Nice work if you can get it.

[bendix]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

[PCA]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

I did explain it but for people who need a bit longer (or who are more entertained in critizising and provoking than discussing) here is a short summary: With this money transfer there would have been a better rate to get exchanging the ammount to thai baht. The OP didnt get the rate he supposed to so he made a loss. His loss is definitely the profit of someone else and you guess who. Or maybe nobody took it? Where is the money?

[sonicdragon]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

I did explain it but for people who need a bit longer (or who are more entertained in critizising and provoking than discussing) here is a short summary: With this money transfer there would have been a better rate to get exchanging the ammount to thai baht. The OP didnt get the rate he supposed to so he made a loss. His loss is definitely the profit of someone else and you guess who. Or maybe nobody took it? Where is the money?

Whoops. It seems you still don't get it. The "better rate to get " as you put it, is the onshore rate, and that is only available onshore, that is why it is called the onshore rate; but the exchange took place offshore.

There is no corresponding profit. In fact there isn't really even a loss - the customer percieves that there is a loss because had the exchange taken place onshore s/he would have received the onshore rate and consequently a larger amount of baht. The onshore/offshore rates exist because of restrictions imposed by the BOT on domestic (onshore) institutions dealing with foreign (offshore) institutions - and this applies to banks who have branches in thailand and overseas.

Taking today's rates from bloomberg for A$

the offshore rate is 29.25

the onshore rate is 31.26

Sending 10,000 A$ at the onshore rate will produce 312,600 baht, while the offshore rate produces 292,500 - so the person who utilises the offshore rate "loses" 20,100 baht, but no one has profited by 20,100 baht.

But since you have a different opinion, please do enlighten us about where you think the 20,100 baht has gone in this case..... ?

[PCA]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

I did explain it but for people who need a bit longer (or who are more entertained in critizising and provoking than discussing) here is a short summary: With this money transfer there would have been a better rate to get exchanging the ammount to thai baht. The OP didnt get the rate he supposed to so he made a loss. His loss is definitely the profit of someone else and you guess who. Or maybe nobody took it? Where is the money?

Whoops. It seems you still don't get it. The "better rate to get " as you put it, is the onshore rate, and that is only available onshore, that is why it is called the onshore rate; but the exchange took place offshore.

There is no corresponding profit. In fact there isn't really even a loss - the customer percieves that there is a loss because had the exchange taken place onshore s/he would have received the onshore rate and consequently a larger amount of baht. The onshore/offshore rates exist because of restrictions imposed by the BOT on domestic (onshore) institutions dealing with foreign (offshore) institutions - and this applies to banks who have branches in thailand and overseas.

Taking today's rates from bloomberg for A$

the offshore rate is 29.25

the onshore rate is 31.26

Sending 10,000 A$ at the onshore rate will produce 312,600 baht, while the offshore rate produces 292,500 - so the person who utilises the offshore rate "loses" 20,100 baht, but no one has profited by 20,100 baht.

But since you have a different opinion, please do enlighten us about where you think the 20,100 baht has gone in this case..... ?

Are you a banker or a tourist? What did you do in international banking, dont know how banks operate with partner banks in other countries?

Lesson finished.

[sonicdragon]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

I did explain it but for people who need a bit longer (or who are more entertained in critizising and provoking than discussing) here is a short summary: With this money transfer there would have been a better rate to get exchanging the ammount to thai baht. The OP didnt get the rate he supposed to so he made a loss. His loss is definitely the profit of someone else and you guess who. Or maybe nobody took it? Where is the money?

Whoops. It seems you still don't get it. The "better rate to get " as you put it, is the onshore rate, and that is only available onshore, that is why it is called the onshore rate; but the exchange took place offshore.

There is no corresponding profit. In fact there isn't really even a loss - the customer percieves that there is a loss because had the exchange taken place onshore s/he would have received the onshore rate and consequently a larger amount of baht. The onshore/offshore rates exist because of restrictions imposed by the BOT on domestic (onshore) institutions dealing with foreign (offshore) institutions - and this applies to banks who have branches in thailand and overseas.

Taking today's rates from bloomberg for A$

the offshore rate is 29.25

the onshore rate is 31.26

Sending 10,000 A$ at the onshore rate will produce 312,600 baht, while the offshore rate produces 292,500 - so the person who utilises the offshore rate "loses" 20,100 baht, but no one has profited by 20,100 baht.

But since you have a different opinion, please do enlighten us about where you think the 20,100 baht has gone in this case..... ?

Are you a banker or a tourist? What did you do in international banking, dont know how banks operate with partner banks in other countries?

Lesson finished.

"Lesson finished" ? Wow, you are such a great teacher. I hope that's not your profession, or I would feel very sorry for your students.

I am now a business consultant - I was formerly a banker (first in London and then in Hong Kong). Before that I was an accountant in London and for some of that time I was auditing banks.

By "partner" banks, I assume you mean correspondent banks ? Or perhaps you mean affiliates, subsidiaries, or branches in other countries ? It's really not clear from anything that you say in your last few posts what you actually mean. However in this case it doesn't really matter. What I can tell you, from first hand experience working in a bank, is that banks in different countries are seperate legal entities and are regulated seperately. Thus, for example, Citibank in Hong Kong (who I have an account with) cannot access the onshore thai baht market even through their branch in bangkok (who I also have an account with). So when I want to send money from HK to BKK I could either convert it into baht at the offshore rate and Citi HK would remit those baht to Citi BKK, or I could remit foreign currency from Citi HK to Citi BKK and have the exchange done at the onshore rate. And by the way, Citibank in bangkok cannot remit thai baht to Citibank Hong Kong because they are prohibited in doing so by the BOT. If they could do it the onshore/offshore market would not exist.

If you really want to teach me something or correct my understanding of how these things work please go ahead but you will need to say what you mean with a little more clarity.

[PCA]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

I did explain it but for people who need a bit longer (or who are more entertained in critizising and provoking than discussing) here is a short summary: With this money transfer there would have been a better rate to get exchanging the ammount to thai baht. The OP didnt get the rate he supposed to so he made a loss. His loss is definitely the profit of someone else and you guess who. Or maybe nobody took it? Where is the money?

Whoops. It seems you still don't get it. The "better rate to get " as you put it, is the onshore rate, and that is only available onshore, that is why it is called the onshore rate; but the exchange took place offshore.

There is no corresponding profit. In fact there isn't really even a loss - the customer percieves that there is a loss because had the exchange taken place onshore s/he would have received the onshore rate and consequently a larger amount of baht. The onshore/offshore rates exist because of restrictions imposed by the BOT on domestic (onshore) institutions dealing with foreign (offshore) institutions - and this applies to banks who have branches in thailand and overseas.

Taking today's rates from bloomberg for A$

the offshore rate is 29.25

the onshore rate is 31.26

Sending 10,000 A$ at the onshore rate will produce 312,600 baht, while the offshore rate produces 292,500 - so the person who utilises the offshore rate "loses" 20,100 baht, but no one has profited by 20,100 baht.

But since you have a different opinion, please do enlighten us about where you think the 20,100 baht has gone in this case..... ?

Are you a banker or a tourist? What did you do in international banking, dont know how banks operate with partner banks in other countries?

Lesson finished.

"Lesson finished" ? Wow, you are such a great teacher. I hope that's not your profession, or I would feel very sorry for your students.

I am now a business consultant - I was formerly a banker (first in London and then in Hong Kong). Before that I was an accountant in London and for some of that time I was auditing banks.

By "partner" banks, I assume you mean correspondent banks ? Or perhaps you mean affiliates, subsidiaries, or branches in other countries ? It's really not clear from anything that you say in your last few posts what you actually mean. However in this case it doesn't really matter. What I can tell you, from first hand experience working in a bank, is that banks in different countries are seperate legal entities and are regulated seperately. Thus, for example, Citibank in Hong Kong (who I have an account with) cannot access the onshore thai baht market even through their branch in bangkok (who I also have an account with). So when I want to send money from HK to BKK I could either convert it into baht at the offshore rate and Citi HK would remit those baht to Citi BKK, or I could remit foreign currency from Citi HK to Citi BKK and have the exchange done at the onshore rate. And by the way, Citibank in bangkok cannot remit thai baht to Citibank Hong Kong because they are prohibited in doing so by the BOT. If they could do it the onshore/offshore market would not exist.

If you really want to teach me something or correct my understanding of how these things work please go ahead but you will need to say what you mean with a little more clarity.

no, I dont want to teach you anything because you are so smart already. Go ahead and dream on along with some others here.

[sonicdragon]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

I did explain it but for people who need a bit longer (or who are more entertained in critizising and provoking than discussing) here is a short summary: With this money transfer there would have been a better rate to get exchanging the ammount to thai baht. The OP didnt get the rate he supposed to so he made a loss. His loss is definitely the profit of someone else and you guess who. Or maybe nobody took it? Where is the money?

Whoops. It seems you still don't get it. The "better rate to get " as you put it, is the onshore rate, and that is only available onshore, that is why it is called the onshore rate; but the exchange took place offshore.

There is no corresponding profit. In fact there isn't really even a loss - the customer percieves that there is a loss because had the exchange taken place onshore s/he would have received the onshore rate and consequently a larger amount of baht. The onshore/offshore rates exist because of restrictions imposed by the BOT on domestic (onshore) institutions dealing with foreign (offshore) institutions - and this applies to banks who have branches in thailand and overseas.

Taking today's rates from bloomberg for A$

the offshore rate is 29.25

the onshore rate is 31.26

Sending 10,000 A$ at the onshore rate will produce 312,600 baht, while the offshore rate produces 292,500 - so the person who utilises the offshore rate "loses" 20,100 baht, but no one has profited by 20,100 baht.

But since you have a different opinion, please do enlighten us about where you think the 20,100 baht has gone in this case..... ?

Are you a banker or a tourist? What did you do in international banking, dont know how banks operate with partner banks in other countries?

Lesson finished.

"Lesson finished" ? Wow, you are such a great teacher. I hope that's not your profession, or I would feel very sorry for your students.

I am now a business consultant - I was formerly a banker (first in London and then in Hong Kong). Before that I was an accountant in London and for some of that time I was auditing banks.

By "partner" banks, I assume you mean correspondent banks ? Or perhaps you mean affiliates, subsidiaries, or branches in other countries ? It's really not clear from anything that you say in your last few posts what you actually mean. However in this case it doesn't really matter. What I can tell you, from first hand experience working in a bank, is that banks in different countries are seperate legal entities and are regulated seperately. Thus, for example, Citibank in Hong Kong (who I have an account with) cannot access the onshore thai baht market even through their branch in bangkok (who I also have an account with). So when I want to send money from HK to BKK I could either convert it into baht at the offshore rate and Citi HK would remit those baht to Citi BKK, or I could remit foreign currency from Citi HK to Citi BKK and have the exchange done at the onshore rate. And by the way, Citibank in bangkok cannot remit thai baht to Citibank Hong Kong because they are prohibited in doing so by the BOT. If they could do it the onshore/offshore market would not exist.

If you really want to teach me something or correct my understanding of how these things work please go ahead but you will need to say what you mean with a little more clarity.

no, I dont want to teach you anything because you are so smart already. Go ahead and dream on along with some others here.

I'll be the first to admit that I do not know everything about banking. So please do go ahead and teach me something.....please ?

[samran]

sonic,

your avtar says it all really.

[PCA]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

I did explain it but for people who need a bit longer (or who are more entertained in critizising and provoking than discussing) here is a short summary: With this money transfer there would have been a better rate to get exchanging the ammount to thai baht. The OP didnt get the rate he supposed to so he made a loss. His loss is definitely the profit of someone else and you guess who. Or maybe nobody took it? Where is the money?

Whoops. It seems you still don't get it. The "better rate to get " as you put it, is the onshore rate, and that is only available onshore, that is why it is called the onshore rate; but the exchange took place offshore.

There is no corresponding profit. In fact there isn't really even a loss - the customer percieves that there is a loss because had the exchange taken place onshore s/he would have received the onshore rate and consequently a larger amount of baht. The onshore/offshore rates exist because of restrictions imposed by the BOT on domestic (onshore) institutions dealing with foreign (offshore) institutions - and this applies to banks who have branches in thailand and overseas.

Taking today's rates from bloomberg for A$

the offshore rate is 29.25

the onshore rate is 31.26

Sending 10,000 A$ at the onshore rate will produce 312,600 baht, while the offshore rate produces 292,500 - so the person who utilises the offshore rate "loses" 20,100 baht, but no one has profited by 20,100 baht.

But since you have a different opinion, please do enlighten us about where you think the 20,100 baht has gone in this case..... ?

Are you a banker or a tourist? What did you do in international banking, dont know how banks operate with partner banks in other countries?

Lesson finished.

"Lesson finished" ? Wow, you are such a great teacher. I hope that's not your profession, or I would feel very sorry for your students.

I am now a business consultant - I was formerly a banker (first in London and then in Hong Kong). Before that I was an accountant in London and for some of that time I was auditing banks.

By "partner" banks, I assume you mean correspondent banks ? Or perhaps you mean affiliates, subsidiaries, or branches in other countries ? It's really not clear from anything that you say in your last few posts what you actually mean. However in this case it doesn't really matter. What I can tell you, from first hand experience working in a bank, is that banks in different countries are seperate legal entities and are regulated seperately. Thus, for example, Citibank in Hong Kong (who I have an account with) cannot access the onshore thai baht market even through their branch in bangkok (who I also have an account with). So when I want to send money from HK to BKK I could either convert it into baht at the offshore rate and Citi HK would remit those baht to Citi BKK, or I could remit foreign currency from Citi HK to Citi BKK and have the exchange done at the onshore rate. And by the way, Citibank in bangkok cannot remit thai baht to Citibank Hong Kong because they are prohibited in doing so by the BOT. If they could do it the onshore/offshore market would not exist.

If you really want to teach me something or correct my understanding of how these things work please go ahead but you will need to say what you mean with a little more clarity.

no, I dont want to teach you anything because you are so smart already. Go ahead and dream on along with some others here.

I'll be the first to admit that I do not know everything about banking. So please do go ahead and teach me something.....please ?

gonna be expensive for you.