RBI/2004-05/500
A.P. (DIR Series) Circular No. 47
June 23, 2005
To
All Banks Authorised to Deal in
Foreign Exchange
Madam / Sir,
Booking and Cancellation of Forward
Contracts
Attention of authorised dealer
(AD) banks is invited to A.P. (DIR Series) Circular No.63 dated December 21,
2002 in terms of which all forward contracts booked by residents in respect
of their foreign currency exposures falling due within one year are permitted
to be cancelled and rebooked freely, subject to submission of details of import
and non-trade payment exposures by the constituents to their AD banks on an
annual basis. Forward contracts booked to hedge export transactions with tenor
greater than one year are also permitted to be freely cancelled and rebooked.
Forward contracts booked to cover all other exposures falling due beyond one
year, once cancelled, cannot be rebooked.
2. To provide greater flexibility
to residents in managing their exposures, it has been decided that all forward
contracts, booked by residents to hedge current account transactions,
regardless of tenor, may be allowed to be cancelled and rebooked freely.
It is clarified that this relaxation will not be applicable to forward contracts
booked on past performance basis without documents as also forward contracts
booked to hedge transactions denominated in foreign currency but settled in
Indian Rupee (INR), where the current restrictions will continue.
3. All other guidelines/instructions
relating to booking/cancellation/rebooking of forward contracts contained in
our A.P.(DIR Series) circular No.63 dated December 21, 2002, including submission
of details of exposures in foreign currency remain unchanged. The format in
which exposures are required to be declared has been revised in tune with the
amended guidelines and is annexed to this Circular. Please
note that details of exposures of all corporate clients have to be included
in the report. However, the facility of cancellation and rebooking should not
be permitted unless they have submitted the required exposure information as
on 1st April of the year.
4. Necessary amendments to
the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations
2000, shall be issued separately.
5. Authorised Dealer banks may
bring the contents of this Circular to the notice of their constituents and
customers concerned.
6. The directions contained
in this circular have been issued under Section 10(4) and 11(1) of the Foreign
Exchange Management Act,1999 (42 of 1999) and is without prejudice to permissions/approvals,
if any, required under any other law.
Yours
faithfully
(Vinay Baijal)
General Manager-in-Charge
Annex
Information relating to exposures
in foreign currency as on April 1st
Name of the corporate:
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Amt. In USD Mio equivalent
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Of col (1) amounts already
hedged
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(1)
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(2)
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i)
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Projected import transactions
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@
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#
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ii)
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Non-trade payments
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#
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#
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Note
Authorised dealers should consolidate
the above data for the bank as a whole and forward a report giving corporate-wise
balances to the Chief General Manager, Foreign Exchange Department, Reserve
Bank of India, Central Office, Forex Markets Division, Mumbai- 400 001 before
June 30, every year.
@ Calculated on the basis of the
last three years’ average, duly factoring in subsequent major changes, if any.
# Based on actuals.
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