What is the procedure that will be followed by a Bank in booking Forward Contracts for its customers?

The procedure followed by the banks in booking and utilization of a forward contract may be summarized as under: The transaction of booking of forward contract is initiated with the customer enquiring from his bank the rate at which the required forward currency is available. Before Quoting a rate the bank should get the details about: The currency The period of forward cover including the particulars of option, and The nature and tenor of the Instrument. If the rate quoted by the bank is acceptable to the customer, he is required to submit an application to the bank along with documentary evidence to support the application, such as the sale contract. Contracts must state the first and last dates of delivery. It is not permissible to state in contracts 'Delivery one week' or 'Delivery one month' or 'Delivery three months forward' etc. Charges for booking the forward contract as prescribed by the bank concerned is recovered from the customer. When the customer delivers foreign exchange on the due date, the transaction is done at the rate agreed upon.