New Delhi, Dec 19 (PTI) A consulting engineers' association has urged the government to ensure that foreign currency transactions within the country be not routed through the US banking system in a bid to lower transaction costs.

At present, transaction fee is levied on US dollar transactions within the country.

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"A payment in USD from one entity to the other in the current dispensation is required to be undertaken through the US banking system. This should be undertaken directly through the Reserve Bank of India and there should be no requirement of routing them through the American Banking system.

"By routing the transactions through the American banking system, the country is losing substantial money, which is going to the Americans towards transaction costs," K K Kapila, Chairman, Business and Policy Committee, Consulting Engineers Association of India (CEAI), said in a statement.

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It is a peculiar scenario that for foreign currency transactions within the country one of the banks from India sends dollars to the US to get them back in another bank in India, he explained.

"To my mind, as long as we are transacting in US dollars within India, there should be no transaction cost payable to the US," he said.

"This needs an urgent correction, lest we continue to lose every single day. If it is part of some trade agreement, it needs an urgent relook. Let this be addressed on top priority," he said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)