Hedging facilities for INR denominated ECBs permitted with authorised dealer banks to manage currency risk. Non-resident holders of INR denominated ECBs may obtain hedging facilities with Authorised Dealer Category I banks using forwards, options and swaps. Customers must furnish pre deal documentation evidencing the underlying ECB, undertake that the exposure is not hedged elsewhere and that cancelled underlying exposures will trigger hedge cancellation. Hedge amount and tenor must not exceed the underlying transaction; settlement occurs via Nostro/Vostro accounts and funds are released only after sighting credits. Contracts cannot be rebooked after cancellation but may be rolled over before maturity; gains on cancellation may be passed to customers subject to a non rebooking declaration.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Hedging facilities for INR denominated ECBs permitted with authorised dealer banks to manage currency risk.
Non-resident holders of INR denominated ECBs may obtain hedging facilities with Authorised Dealer Category I banks using forwards, options and swaps. Customers must furnish pre deal documentation evidencing the underlying ECB, undertake that the exposure is not hedged elsewhere and that cancelled underlying exposures will trigger hedge cancellation. Hedge amount and tenor must not exceed the underlying transaction; settlement occurs via Nostro/Vostro accounts and funds are released only after sighting credits. Contracts cannot be rebooked after cancellation but may be rolled over before maturity; gains on cancellation may be passed to customers subject to a non rebooking declaration.
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