Reserve Bank of India has reviewed the extant guidelines governing Exchange Earner’s Foreign Currency (EEFC) Accounts, cancellation and rebooking of forward contracts booked by the exporters and the Net Overnight Open Position Limit (NOOPL) of the Authorised Dealer Category-I Banks. In order to provide operational flexibility to exchange earners/ exporters and AD Category-I banks, it has been decided:

• To restore the erstwhile stipulation of allowing credit of 100 percent foreign exchange earnings to the EEFC accounts subject to the condition that the sum total of the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the succeeding calendar month after adjusting for utilization of the balances for approved purposes or forward commitments;

• To allow exporters to cancel and rebook forward contracts to the extent of 25 percent of the total contracts booked for hedging their exposure; and

• For computation of Net Overnight Open Position involving Rupee as one of the currencies, AD Category-I banks need not include the positions taken by their overseas branches and also the delta of the Options Position. It is, however, clarified that these positions will continue to be part of the total NOOPL along with cross-currency positions and positions arising out of exchange traded currency futures/options transactions for calculation of the total foreign currency exposure of banks.

R. R. Sinha
Deputy General Manager

Press Release : 2012-2013/165

 

EEFC credit flexibility restored with monthly conversion requirement; exporters allowed limited forward rebooking; NOOPL computation adjusted. The Reserve Bank allows full crediting of foreign exchange receipts to Exchange Earner Foreign Currency (EEFC) Accounts provided monthly accruals are converted into rupees by the end of the succeeding month after approved utilizations and forward commitments. Exporters may cancel and rebook a limited portion of forward hedges. For NOOPL where the rupee is a currency leg, AD Category I banks may omit overseas branch positions and option delta from the overnight position calculation, though these items remain part of total foreign currency exposure alongside cross currency and exchange traded positions.