Remittance related to Commodity Derivative Contract Issuance of Standby Letter of Credit / Bank Guarantee

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....e related to Commodity Derivative Contract Issuance of Standby Letter of Credit / Bank Guarantee Attention of Authorised Dealer Category - I (AD Category-I) banks is invited to Regulation 8 of Notification No.FEMA.25/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Foreign exchange derivative contracts) Regulations, 2000, as amended from time to time, regarding remittance of foreign ex....

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....ters of credit only where the remittance is covered under the delegated authority or under the specific approval granted for overseas commodity hedging by the Reserve Bank. 4. The issuing bank shall have a Board approved policy on the nature and extent of exposures that the bank can take for such transactions and should be part of the credit exposure on the customers. The exposure should also be ....

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....andby letter of credit / bank guarantee - commodity hedging transactions 1. The standby letter of credit / bank guarantee may be issued for the specific purpose of payment of margin money in respect of approved commodity hedging activities of the company. 2. The standby letter of credit / bank guarantee may be issued for an amount not exceeding the margin payments made to the specific counterpar....