TaxTMI 
TaxTMI 
TaxTMI 
Master Circular on Risk Management and Inter-Bank Dealings.
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....cument 1 INDEX PART - A 3 RISK MANAGEMENT 3 SECTION I 3 Facilities for Persons Resident in India other than Authorised Dealers Category-I. ... 3 SECTION II 35 Facilities for Persons Resident outside India 35 SECTION II 39 Facilities for Authorised Dealers Category-I 39 PART B 43 ACCOUNTS OF NON-RESIDENT BANKS 43 PART C 46 INTER-BANK FOREIGN EXCHANGE DEALINGS 46 PART D 50 REPORTS TO THE RESERVE BANK 50 Annex 53 56 Annex II Annex III 59 60 Annex IV Annex V 61 Annex VI 62 Annex VII 63 Annex VIII 64 Annex IX. 66 Annex X 67 Annex XI 68 Annex XII 72 Annex XIII 73 Annex XIV 75 Annex XV 76 Annex XVI 77 80 Appendix website: www.fema.rbi.org.in email: [email protected] 2 PART - A RISK MANAGEMENT SECTION I Facilities for Persons Resident in India other than Authorised Dealers Category-I The facilities for persons resident in India (other than AD Category I banks) are elaborated under paragraphs A and B. Paragraph A describes the products and operational guidelines for the respective product. In add....
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....and /or purchase of foreign exchange is permitted under the FEMA 1999, or in terms of the rules/ regulations/directions/orders made or issued there under. b) To hedge exchange rate risk in respect of the market value of overseas direct investments (in equity and loan). i) Contracts covering overseas direct investment (ODI) can be cancelled or rolled over on due dates. However, AD Category I banks may permit rebooking only to the extent of 50 per cent of the cancelled contracts. ii) If a hedge becomes naked in part or full owing to contraction ( due to price movement/impairment) of the market value of the ODI, the hedge may be allowed to continue until maturity, if the customer so desires. Rollovers on due date shall be permitted up to the extent of the market value as on that date. c) To hedge exchange rate risk of transactions denominated in foreign currency but settled in INR, including hedging the economic (currency indexed) exposure of importers in respect of customs duty payable on imports. i) Forward foreign exchange contracts covering such transactions will website: www.fema.rbi.org.in email: [email protected] 4 be settled in cash on maturity. ....
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....d rebooking is not permitted for forward contracts, involving Rupee as one of the currencies, booked by residents to hedge capital account transactions for tenor greater than one year. These forward contract(s) if cancelled with one AD Category I bank can be rebooked with another AD Category I bank, subject to the following conditions: (i) the switch is warranted by competitive rates on offer, termination of banking relationship with the AD Category I bank with whom the contract was originally booked; (ii) the cancellation and rebooking are done simultaneously on the maturity date of the contract; and (iii) the responsibility of ensuring that the original contract has been cancelled rests with the AD Category I bank who undertakes rebooking of the contract. h) The facility of rebooking should not be permitted unless the corporate has submitted the exposure information as prescribed in Annex V. i) Substitution of contracts for hedging trade transactions may be permitted by an AD Category I bank on being satisfied with the circumstances under which such substitution has become necessary. The AD Category I bank may also verify the amount and tenor of the underlying subs....
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.... c) Customers can buy call or put options. d) All guidelines applicable for foreign currency-INR foreign exchange forward contracts are applicable to foreign currency-INR option contracts also. e) AD Category I banks having adequate internal control, risk monitoring/ management systems, mark to market mechanism, etc. are permitted to run a foreign currency- INR options book on prior approval from the Reserve Bank, subject to conditions. AD Category I banks desirous of running a foreign currency-INR options book and fulfilling minimum eligibility criteria listed below, may apply to the Reserve Bank with copies of approval from the competent authority (Board/ Risk Committee/ ALCO), detailed memorandum in this regard, specific approval of the Board for the type of option writing and permissible limits. The memorandum put up to the Board should clearly mention the downside risks, among other matters. Minimum Eligibility Criteria: i. Net worth not less than Rs 300 crore ii. CRAR of 10 per cent iii. Net NPAs not exceeding 3 per cent of the net advances iv. Continuous profitability for at least three years The Reserve Bank will consider the application and accord....
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....mic exposures, the INR-foreign currency swap (to move from rupee liability to a foreign currency liability) may be restricted to listed companies or unlisted companies with a minimum net worth of Rs 200 crore. Further, the AD Category I bank is required to examine the suitability and appropriateness of the swap and be satisfied about the financial soundness of the corporate. email: [email protected] website: www.fema.rbi.org.in 9 Purpose To hedge exchange rate and/or interest rate risk exposure for those having long- term foreign currency borrowing or to transform long-term INR borrowing into foreign currency liability. Operational Guidelines, Terms and Conditions a) No swap transactions involving upfront payment of Rupees or its equivalent in any form shall be undertaken. b) The term "long-term exposure" means exposures with residual maturity of one year or more. c) Swap transactions may be undertaken by AD Category I banks as intermediaries by matching the requirements of corporate counterparties. While no limits are placed on the AD Category I banks for undertaking swaps to facilitate customers to hedge their foreign exchange exposures, a limit of US....
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.... / 32 or equivalent standards are notified.)" Purpose To hedge exchange rate risk arising out of trade transactions and External Commercial Borrowings (ECBs). Operational Guidelines, Terms and Conditions a) Writing of options by the users, on a standalone basis, is not permitted. b) Users can enter into option strategies of simultaneous buy and sell of plain vanilla European options, provided there is no net receipt of premium. website: www.fema.rbi.org.in email: [email protected] 11 c) Leveraged structures, digital options, barrier options, range accruals and any other exotic products are not permitted. d) The portion of the structure with the largest notional, computed over the tenor of the structure, should be reckoned for the purpose of underlying. e) The delta of the options should be explicitly indicated in the term sheet. f) AD Category I banks may, stipulate additional safeguards, such as, continuous profitability, higher net worth, turnover, etc depending on the scale of forex operations and risk profile of the users. g) The maturity of the hedge should not exceed the maturity of the underlying transaction and subject to the same th....
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....rupee), foreign currency-INR options and cost reduction structures [as mentioned in section B para I 1(v)]. Operational Guidelines, Terms and Conditions a) Corporates having a minimum net worth of Rs 200 crores and an annual export and import turnover exceeding Rs 1000 crores and satisfying all other email: [email protected] website: www.fema.rbi.org.in 13 conditions as stipulated in section B para I 1(v) may be allowed to use cost reduction structures. b) The contracts booked during the current financial year (April-March) and the outstanding contracts at any point of time should not exceed the eligible limit i.e. the average of the previous three financial years' actual import/export turnover or the previous year's actual import/export turnover, whichever is higher. c) Contracts booked in excess of 75 per cent of the eligible limit will be on deliverable basis and cannot be cancelled. d) These limits shall be computed separately for import/export transactions. e) Higher limits will be permitted on a case-by-case basis on application to the Foreign Exchange Department, Central Office, Reserve Bank of India. The additional limits, if sanctioned, shal....
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....report (as on the last Friday of every month) on the limits granted and utilised by their constituents under this facility as prescribed in Annex X. 3) Special Dispensation i) Small and Medium Enterprises (SMEs) Participants Market-makers - AD Category I. Users - Small and Medium Enterprises (SMEs) 2 Purpose To hedge direct and / or indirect exposures of SMEs to foreign exchange risk Product Forward foreign exchange contracts Operational Guidelines: Small and Medium Enterprises (SMEs) having direct and / or indirect exposures to foreign exchange risk are permitted to book / cancel / 2 SME as defined by the Rural Planning and Credit Department, Reserve Bank of India vide circular RPCD.PLNS. BC.No.63/06.02.31/2006-07 dated April 4, 2007. website: www.fema.rbi.org.in email: [email protected] 15 rebook/ roll over forward contracts without production of underlying documents to manage their exposures effectively, subject to the following conditions: a) Such contracts may be booked through AD Category I banks with whom the SMEs have credit facilities and the total forward contracts booked should be in alignment with the credit facilities a....
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.... the guidelines under the specific foreign exchange derivative product, the general instructions should be followed scrupulously by the users (residents in India other than AD Category I banks) and the market makers (AD Category I banks). a) In case of all forex derivative transactions [except INR- foreign currency swaps i.e. moving from INR liability to foreign currency liability as in section B para I(1)(iv)] is undertaken, AD Category I banks must take a declaration from the clients that the exposure is unhedged and has not been hedged with another AD Category I bank. The corporates should provide an annual certificate to the AD Category I bank certifying that the derivative transactions are authorized and that the Board (or the equivalent forum in case of partnership or proprietary firms) is aware of the same. b) In the case of contracted exposure, AD Category I banks must obtain: i) An undertaking from the customer that the same underlying exposure has not been covered with any other AD Category I bank/s. Where hedging of the same exposure is undertaken in parts, with more than one AD Category I bank, the details of amounts already booked with other AD Category I bank....
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.... www.fema.rbi.org.in 18 email: [email protected] j) The provisions of comprehensive guidelines on Derivatives issued vide DBOD.No.BP.BC. 86/21.04.157/2006-07 dated April 20, 2007 and as amended from time to time are also applicable to forex derivatives. k) Sharing of information on derivatives between banks is mandatory and as detailed vide circular DBOD.No.BP.BC.46/08.12.001/2008-09 dated September 19, 2008 and DBOD.No. BP. BC. 94/ 08.12.001/ 2008-09 dated December 8, 2008. website: www.fema.rbi.org.in email: [email protected] 19 4. Currency Futures on recognised Stock /New Exchanges As part of further developing the derivatives market in India and adding to the existing menu of foreign exchange hedging tools available to the residents, currency futures contracts have been permitted to be traded in recognized stock exchanges or new exchanges, recognized by the Securities and Exchange Board of India (SEBI) in the country. The currency futures market would function subject to the directions, guidelines, instructions issued by the Reserve Bank and the SEBI, from time to time. Persons resident in India are permitted to participate in the currency futu....
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....ks can participate in the currency futures market only as clients, subject to approval therefore from the respective regulatory Departments of the Reserve Bank. Position limits i. The position limits for various classes of participants in the currency futures market shall be subject to the guidelines issued by the SEBI. ii. The AD Category - I banks, shall operate within prudential limits, such as Net Open Position (NOP) and Aggregate Gap (AG) limits. The exposure of the banks, on their own account, in the currency futures market shall form part of their NOP and AG limits. Risk Management measures The trading of currency futures shall be subject to maintaining initial, extreme loss and calendar spread margins and the Clearing Corporations / Clearing Houses of the exchanges should ensure maintenance of such margins by the participants on the basis of the guidelines issued by the SEBI from time to time. website: www.fema.rbi.org.in email: [email protected] 21 Surveillance and disclosures The surveillance and disclosures of transactions in the currency futures market shall be carried out in accordance with the guidelines issued by the SEBI. Authorisa....
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....e trading and clearing members of the exchange traded currency options market of the recognized stock exchanges, on their own account and on behalf of their clients, subject to fulfilling the following minimum prudential requirements: a) Minimum net worth of Rs. 500 crores. b) Minimum CRAR of 10 per cent. c) Net NPA should not exceed 3 per cent. d) Made net profit for last 3 years. The AD Category - I banks, which fulfil the prudential requirements, should lay down detailed guidelines with the approval of their Boards for trading and clearing of the exchange traded currency options contracts and management of risks. iii) AD Category - I banks, which do not meet the above minimum prudential requirements and AD Category - I banks, which are Urban Co-operative banks or State Co-operative banks, can participate in the exchange traded currency options market only as clients, subject to approval therefor from the respective regulatory Departments of the Reserve Bank. Position limits i) The position limits for various classes of participants for the currency options shall be subject to the guidelines issued by the SEBI. ii) The AD Category - I banks shall operat....
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....e of partnership or proprietary firms. The facility is divided into following categories: I) Delegated Route a. Hedging of price risk on actual Import/Export of commodities Participants Users: Companies in India listed on a recognized stock exchange engaged in import and export of commodities Facilitators: AD Category I banks specifically authorized by the Reserve Bank in this regard. Purpose: To hedge price risk of the imported/exported commodity Products: Standard exchange traded futures and options (purchases only) in international commodity exchanges. If risk profile warrants -may use OTC contracts overseas. website: www.fema.rbi.org.in email: [email protected] 26 Operational Guidelines AD Category I banks satisfying certain minimum norms, and authorized by the Reserve Bank may grant permission to companies listed on a recognized stock exchange to hedge price risk on import/ export in respect of any commodity(except gold, silver, platinum) in the international commodity exchanges/ markets. The guidelines are given in Annex XI (A & B). b. Hedging of anticipated imports of crude oil Participants Users: Domestic companies engaged in r....
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....c exposures in respect of ATF based on domestic purchases. Products: Standard exchange traded futures and options (purchases only) in international commodity exchanges. If risk profile warrants - may use OTC contracts overseas. Operational Guidelines: a) AD Category I banks should ensure that permission for hedging ATF is granted only against firm orders. b) AD Category I banks should retain necessary documentary evidence. c) AD Category I banks would require the user to submit a Board resolution certifying Board approved policies which define the overall framework within which derivatives activities should be conducted and the risks controlled. d) All other conditions and guidelines as per Annex XI (A & B) should be complied with. (iii) Domestic purchases of crude oil and sales of petro-products Participants Users: Domestic crude oil refining companies. Facilitators: AD Category I banks specifically authorized by the Reserve Bank in this regard. Purpose: To hedge commodity price risk on domestic purchases of crude oil and domestic sales of petroleum products, which are linked to international prices. Products: Standard exchange traded futures an....
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.... in international commodity exchanges. If risk profile warrants - may use OTC contracts overseas. Operational Guidelines: AD banks may allow entities in the Special Economic Zones (SEZ) to undertake hedging transactions in the overseas commodity exchanges/markets to hedge their commodity prices on export/import, subject to the condition that such contract is entered into on a stand-alone basis. (The term "standalone" means the unit in SEZ is completely isolated from financial contacts with its parent or subsidiary in email: [email protected] website: www.fema.rbi.org.in 31 the mainland or within the SEZs as far as its import/export transactions are concerned.) NOTE: The detailed guidelines in respect of Delegated Route and Approval Route are given in the Annex XI and XII respectively. 7. Freight hedging Domestic oil refining companies and shipping companies exposed to freight risk, are permitted to hedge their freight risk by the AD Category I banks authorized by the Reserve Bank. Other companies exposed to freight risk can seek prior permission from the Reserve Bank through their AD Category I bank. It may be noted that the role of Authorized Dealer....
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....crude oil/petroleum products. (ii) Additionally, domestic oil refining companies may hedge their freight risk on anticipated imports of crude oil on the basis of their past performance up to 50 per cent of the volume of actual imports of crude oil during the previous year or 50 per cent of the average volume of imports during the previous three financial years, whichever is higher. (iii) Contracts booked under the past performance facility will have to be regularized by production of underlying documents during the currency of the hedge. An undertaking may be obtained from the company to this effect. (b) For shipping companies: website: www.fema.rbi.org.in 33 email: [email protected] (i) The hedging will be on the basis of owned / controlled ships of the shipping company which have no committed employment. The quantum of hedge will be determined by the number and capacity of these ships. The same may be certified by the statutory auditor and submitted to the AD Category I bank. (ii) Contracts booked will have to be regularized by production of underlying documents i.e. employment of the ship during the currency of the hedge. An undertaking may be obtained ....
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....ows. Operational Guidelines, Terms and Conditions a) The eligibility for cover may be determined on the basis of the declaration of the FII. b) AD Category I banks may undertake periodic reviews, at least at quarterly intervals, on the basis of market price movements, fresh inflows, amounts repatriated and other relevant parameters to ensure that the forward cover outstanding is supported by underlying exposures. c) If a hedge becomes naked in part or in full owing to contraction of the market value of the portfolio, for reasons other than sale of securities, 35 email: [email protected] website: www.fema.rbi.org.in the hedge may be allowed to continue till the original maturity, if so desired. d) The contracts, once cancelled cannot be rebooked except to the extent of 10 per cent of the market value of the portfolio as at the beginning of the financial year. The forward contracts may, however, be rolled over on or before maturity. e) The cost of hedge should be met out of repatriable funds and /or inward remittance through normal banking channel. f) All outward remittances incidental to the hedge are net of applicable taxes. g) For IPO related ....
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....d only after ensuring that the overseas entities have completed all the necessary formalities and obtained necessary approvals (wherever applicable) for the investment. (ii) The tenor of the contracts should not exceed six months at a time beyond which permission of the Reserve Bank would be required to continue with the contract. (iii) These contracts, if cancelled, shall not be eligible to be rebooked for the same inflows. (iv)Exchange gains, if any, on cancellation shall not be passed on to the overseas investor. 37 email: [email protected] website: www.fema.rbi.org.in Operational Guidelines, Terms and Conditions The operational guidelines as outlined for FIIs would be applicable, with the exception of the provision relating to rebooking of cancelled contracts. All foreign exchange derivative contracts permissible for a resident outside India other than a FII, once cancelled, are not eligible to be rebooked. website: www.fema.rbi.org.in email: [email protected] 38 SECTION III Facilities for Authorised Dealers Category-I 1. Management of Banks' Assets-Liabilities Users - AD Category I banks Purpose - Hedging of interest rate and curre....
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....arked in nostro accounts. Foreign currency funds accruing out of hedging should not be parked in Nostro accounts but should remain swapped with banks in India at all times. ii) The forward contracts should be for tenors of one or more years and may be rolled over on maturity. Rebooking of cancelled hedges will require prior approval of the Reserve Bank. email: [email protected] website: www.fema.rbi.org.in 40 b) Tier II capital - i) Foreign banks are permitted to hedge their Tier II capital in the form of Head Office borrowing as subordinated debt, by keeping it swapped into rupees at all times in terms of DBOD circular No.IBS.BC.65 /23.10.015/2001-02 dated February 14, 2002. ii) Banks are not permitted to enter into foreign currency-INR swap transactions involving conversion of fixed rate rupee liabilities in respect of Innovative Tier I/Tier II bonds into floating rate foreign currency liabilities. 4. Participation in the currency futures market in India Please refer to Part-A Section I, paragraph 4. In continuation of the same: a) AD Category I Banks may be guided by the DBOD instructions vide DBOD.No.FSD.BC. 29 /24.01.001/2008-09 dated August 6, ....
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....tions market only as clients, subject to approval therefor from the respective regulatory Departments of the Reserve Bank. c) The AD Category - I banks shall operate within prudential limits, such as Net Open Position (NOP) and Aggregate Gap (AG) limits. The option position of the banks, on their own account, in the exchange traded currency options shall form part of their NOP and AG limits. website: www.fema.rbi.org.in email: [email protected] 42 PART B ACCOUNTS OF NON-RESIDENT BANKS 1. General (i) Credit to the account of a non-resident bank is a permitted method of payment to non-residents and is, therefore, subject to the regulations applicable to transfers in foreign currency. (ii) Debit to the account of a non-resident bank is in effect an inward remittance in foreign currency. 2. Rupee Accounts of Non-Resident Banks AD Category I banks may open/close Rupee accounts (non-interest bearing) in the names of their overseas branches or correspondents without prior reference to the Reserve Bank. Opening of Rupee accounts in the names of branches of Pakistani banks operating outside Pakistan requires specific approval of the Reserve Bank. 3. Fundin....
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....sons thereof. Such a report is not necessary if arrangements exist for value dating. (ii) AD Category I bank wishing to extend any other credit facility in excess of (i) above to overseas banks should seek prior approval from the Chief General Manager, Reserve Bank of India, Foreign Exchange Department, Forex Markets Division, Central Office, Amar Building, 5th Floor, Mumbai, 400001. email: [email protected] website: www.fema.rbi.org.in 44 9. Rupee Accounts of Exchange Houses Opening of Rupee accounts in the names of Exchange Houses for facilitating private remittances into India requires approval of the Reserve Bank. Remittances through Exchange Houses for financing trade transactions are permitted upto Rs.2,00,000 per transaction. website: www.fema.rbi.org.in email: [email protected] 45 PART C INTER-BANK FOREIGN EXCHANGE DEALINGS 1. General The Board of Directors of AD Category I banks should frame an appropriate policy and fix suitable limits for various Treasury functions. 2. Position and Gaps The net overnight open exchange position (Annex-I) and the aggregate gap limits are required to be approved by the Reserve Bank. 3. Inter-....
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....ndition that the maturity of the securities invested in do not exceed the maturity of the underlying FCNR (B) deposits. (iv) Foreign currency funds representing surpluses in the nostro accounts may be utilised for: a) making loans to resident constituents for meeting their foreign exchange requirements or for the Rupee working capital/capital expenditure needs subject to the prudential/interest-rate norms, credit discipline and credit monitoring guidelines in force. website: www.fema.rbi.org.in email: [email protected] 47 b) extending credit facilities to Indian wholly owned subsidiaries/ joint ventures abroad in which at least 51 per cent equity is held by a resident company, subject to the guidelines issued by Reserve Bank (Department of Banking Operations & Development). (v) AD Category I banks may write-off/transfer to unclaimed balances account, un- reconciled debit/credit entries as per instructions issued by Department of Banking Operations and Development, from time to time. 5. Loans/Overdrafts a) All categories of overseas foreign currency borrowings of AD Category I banks, (except for borrowings at (c) below), including existing External Comme....
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....d January 25, 2006 and DBOD. No. BP.BC.23/21.01.002/2006-07 dated July 21, 2006 iv) any other overseas borrowing with the specific approval of the Reserve Bank. d) Interest on loans/overdrafts may be remitted (net of taxes) without the prior approval of Reserve Bank. website: www.fema.rbi.org.in email: [email protected] 49 PART D REPORTS TO THE RESERVE BANK i) The Head/Principal Office of each AD Category-I banks should submit daily statements of Foreign Exchange Turnover in Form FTD and Gaps, Position and Cash Balances in Form GPB through the Online Returns Filing System (ORFS) as per format given in Annex-II. ii) The Head/Principal Office of each authorised dealer category-I should forward a statement of Nostro / Vostro Account balances on a monthly basis in the format given in Annex-III to the Director, Division of International Finance, Department of Economic Analysis and Policy, Reserve Bank of India, Central Office Building, 8th Floor, Fort, Mumbai-400 001. The data may also be transmitted by fax or e-mail at the numbers/addresses given in the format. iii) AD Category-I banks should consolidate the data on cross currency derivative transactions....
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....f General Manager, Reserve Bank of India, Foreign Exchange Department, Forex Markets Division, Central Office, Amar Building, 5th Floor Mumbai-400 001, before the 10th of the succeeding month, in respect of cover taken by FIIs, indicating the name of the FII / fund, the eligible amount of cover, the actual cover taken, etc. as per the format in Annex XIII. ix) The Head/Principal Office of each AD Category-I banks should furnish an up- to-date list (in triplicate) of all its offices/branches, which are maintaining Rupee accounts of non-resident banks as at the end of December every year giving their code numbers allotted by Reserve Bank. The list should be submitted before 15th January of the following year to the Central Office of the Reserve Bank, Foreign Exchange Department, Trade Division, Amar Building 5th Floor, Mumbai 400 001. The offices/branches should be classified according to area of jurisdiction of Reserve Bank Offices within which they are situated. x) AD Category - I banks are required to submit a quarterly report on the forward contracts booked & cancelled by SMEs and Resident Individuals, to the Chief website: www.fema.rbi.org.in 51 email: [email protected] ....
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....'s mix of long and short position in different currencies. It has been decided to adopt the "shorthand method" which is accepted internationally for arriving at the overall net open position. Banks may, therefore, calculate the overall net open position as follows: (i) Calculate the net open position in each currency (paragraph 3 above). (ii) Calculate the net open position in gold. (iii) Convert the net position in various currencies and gold into Rupees in terms of existing RBI / FEDAI Guidelines. All derivative transactions including forward exchange contracts should be reported on the basis of Present Value (PV) adjustment. (iv) Arrive at the sum of all the net short positions. (v) Arrive at the sum of all the net long positions. Overall net foreign exchange position is the higher of (iv) or (v). The overall net foreign exchange position arrived at as above must be kept within the limit approved by Reserve Bank. Note : Authorised Dealer banks should report all derivative transactions including forward exchange contracts on the basis of PV adjustment for the purpose of website: www.fema.rbi.org.in 54 email: [email protected] calculation of the ....
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....n the sale side of cancelled forward contracts, aggregate of the cancelled forward purchase contracts should be indicated (adding to the demand in the market). 4 'FCY/FCY' transactions - Both the legs of the transactions should be reported in the respective columns. For example in a EUR/USD purchase contract, the EUR amount should be included in the purchase side while the USD amount should be included in the sale side. website: www.fema.rbi.org.in email: [email protected] 56 5. Transactions with RBI should be included in inter-bank transactions. Transactions with financial institutions other than banks authorised to deal in foreign exchange should be included under merchant transactions. GPB 1. Foreign Currency Balances - Cash balances and investments in all foreign currencies should be converted into US dollars and reported under this head. 2. Net open exchange position- This should indicate the overall overnight net open exchange position of the authorised dealer category-I in Rs. Crore. The net overnight open position should be calculated on the basis of the instructions given in Annex I. 3. Of the above FCY/INR- The amount to be reported is the pos....
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....g to exposures in foreign currency as on Information relating to exposures in Foreign Currency as on .. Name of the bank. Information relating to exposures in Foreign Currency as on. .... Name of the bank .. C. INR/FCY currency swaps based on Rupee Liability (above USD 25 million equivalent be reported) A. Exposures and Hedges based on Underlying Transactions (USD Million) B. Exposures and Hedges based on Past Performance (USD Million) Sr. No. Name of Corporate Trade Related Non - Trade Exports Imports Short Term Finance Outstanding Exposures Amount hedged Exports Imports Exposures Amount hedged Exposures Amount hedged Exposures Amount hedged Eligible limits |Cum. Amount hedged Amount O/S Eligible limits Cum. Amount hedged Amount O/S 1 2 3 4 5 Notes: a. Export Bills purchased /discounted/negotiated not to be included b. L/C s established/bills under LCs to be retired/ outstanding import collection bills to be included c. Data to be submitted based on banks' books and not based on corporate's return d. Short term Finance to include Trade Credit (Buyer's credit / supplier's credit) approved by the Bank /PCFC e. Non trade exposures to i....
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.... under past performance Available limits under Amount Amount utilised (by delivery of documents) as on date Aggregate amount of contracts booked with all the ADs from April till date Amount contracts cancelled with all ADs from April till date of of contracts o/s with all ADs as past performance as on date on date Thanking you, Yours faithfully, For XXXXXX Authorised Signatories Annex VII [See Part A, Section I, paragraph 2(g)(iv)] Statement giving details of import / export turnover, overdues, etc. Name of the constituent: (Amount in USD million) Percentage overdue Existing limit for booking of forward cover based Financial Year Turnover of bills to turnover (April-March) on past performance Export Import Export Import Export Import 2006-07 2007-08 2008-09 63 email: [email protected] website: www.fema.rbi.org.in Annex VIII [see Part D , paragraph (v)] FCY/Rupee Option transactions [For the week ended 1 I. Option Transaction Report Sr . no Trade date Clien t/ C- party Nam e Notional Optio n Strike Maturity Premium Purpose* Call/ Put *Mention balance sheet, tradi....
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....t Bills Abroad Scheme (EBR) 4b 3 4a 1 2 A Borrowings under under categories (1+2+3+6) expressed as a categories (1+2+3+4+6) expressed as a percentage of percentage of Tier-I capital at Tier-I capital at A A Subord. Any of Borrowings Total other of Total (1+2+3+4+6) debt (1+2+3+6) in category foreign (please currency for specify here in this cell ) inclusion in Tier-II capital 5 8 9 10 6 7 Note :* 1. RBI reference rate and New York closing rates on the date of report may be used for conversion purpose. @ 2. Facility since withdrawn vide para 4 of AP(DIR Series) Circular No. 81 dated March 24, 2004. email: [email protected] website: www.fema.rbi.org.in 66 Annex X [See Part A, Section I, paragraph 1 (ii) (g)] Booking of forward contracts on past performance basis- Report as on Name of the Bank- (in USD million) Total Cumulative Amount of contracts booked Amount utilized (by delivery of Amount of forward contracts Limits sanctioned (3) documents) (4) cancelled (5) sanctioned limits (2) Forward Fcy/ Cross Forward Fcy / INR Cross Forward Fcy 1 Cross during....
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.... bonafides of the transaction or the corporate is not exposed to price risk. The conditions subject to which ADs would grant permission to hedge and the guidelines for monitoring of the transactions are given below. It is clarified that 68 email: [email protected] website: www.fema.rbi.org.in hedging the price risk on domestic sale/purchase transactions in the international exchanges/markets, even if the domestic price is linked to the international price of the commodity, is not permitted, except certain specified transactions as approved/may be approved by the Reserve Bank. Necessary advice may be given to the customers before they start their hedging activity. 4. Banks which have been granted permission to approve commodity hedging may submit an annual report to the Chief General Manager, Reserve Bank of India, Foreign Exchange Department, Central Office, Forex Markets Division, Amar Building, 5th Floor, Mumbai - 400 001 as on March 31 every year, within one month, giving the names of the corporates to whom they have granted permission for commodity hedging and the name of the commodity hedged. 5. Applications from customers to undertake hedge transactions not c....
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....ude oil refining companies 1. The hedging has to be undertaken only through AD Category I banks, who have been specifically authorised by the Reserve Bank in terms A. P. (DIR Series) Circular No.03 dated July 23, 2005, subject to conditions and guidelines as also given in (a) and (b) of this Annex. 2. While extending the above hedging facilities, AD Category I banks should ensure that the domestic crude oil refining companies hedging their exposures should comply with the following: to have Board approved policies which define the overall framework within which derivatives activities are undertaken and the risks contained; sanction of the company's Board has been obtained for the specific activity and also for dealing in OTC markets; 70 website: www.fema.rbi.org.in email: [email protected] the Board approval must include explicitly the mark-to-market policy, the counterparties permitted for OTC derivatives, etc .; and domestic crude oil companies should have put up the list of OTC transactions to the Board on a half yearly basis, which must be evidenced by the AD Category I bank before permitting continuation of hedging facilities under this scheme. ....
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....uring the month Cumulative total - Year to date Part B - Details of transactions permitted to be cancelled and rebooked Name of FII Market Value as determined at start of year (USD mio) Eligibility for Forward cover Forward Booked Contracts Forward Cancelled Contracts Total forward cover outstanding During the month Cumulative Total - Year to Date During the month Cumulative total - Year to date Name of the AD Category - I bank: 73 email: [email protected] website: www.fema.rbi.org.in Signature of the Authorised official: Date . . Stamp .. website: www.fema.rbi.org.in email: [email protected] 74 Annex XIV [see Part D, paragraph (x)] Statement - Details of Forward contracts booked and cancelled For the Quarter ended - (USD million) Category Forward Contracts Booked Forward Contracts Cancelled During the Quarter Cumulative total -Year to Date During the Quarter Cumulative total - Year to date SMEs Individuals Name of the AD Category - I bank : Signature of the Authorised official : Date : Stamp : website: www.fema.rbi.org.in email: [email protected] 75 Annex XV [A. P. (DIR Series) Circular....
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.... of the customers. The exposure should also be assigned risk weights, for capital adequacy purposes as per the extant provisions. 3. 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. 4. The standby letter of credit / bank guarantee may be issued for an amount not exceeding the margin payments made to the specific counterparty during the previous financial year. 5. The standby letter of credit / bank guarantee may be issued for a maximum period of one year, after marking a lien on the non-funded facility available to the customer (letter of credit / bank guarantee limit). 6. The bank shall ensure that the guidelines for overseas commodity hedging have been duly complied with. 7. The bank shall ensure that broker's month-end reports duly confirmed /countersigned by corporate's financial controller have been submitted. 8. Brokers' month end reports shall be regularly verified by the bank to ensure that all off- shore positions are / were backed by physical exposures. website: www.fema.rbi.org.in email: [email protected] 77 An....
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....ion No. FEMA 105/2003-RB October 21, 2003 5. Notification No. FEMA 127/2005-RB January 5, 2005 6. Notification No. FEMA 143/ 2005-RB December 19, 2005 7. Notification No. FEMA 147/ 2006-RB March 16, 2006 8. Notification No. FEMA 148/ 2006-RB March 16, 2006 1. A.P (DIR Series) Circular No. 92 April 4, 2003 2. A.P (DIR Series) Circular No. 93 April 5, 2003 3. A.P (DIR Series) Circular No. 98 April 29, 2003 4. A.P (DIR Series) Circular No.108 June 21, 2003 5. A.P.(DIR Series) Circular No. 28 October 17, 2003 6. A.P.(DIR Series) Circular No. 46 December 9, 2003 7. A.P.(DIR Series) Circular No. 47 December 12, 2003 8. A.P.(DIR Series) Circular No. 81 March 24, 2004. 9. A.P.(DIR Series) Circular No 26 November 1, 2004 10. A.P.(DIR Series) Circular No 47 June 23, 2005 11. A.P.(DIR Series) Circular No 03 July 23, 2005 12. A.P.(DIR Series) Circular No 25 March 6, 2006 13. EC.CO.FMD. No.8 /02.03.75/2002-03 February 4, 2003 14. EC.CO.FMD. No.14 /02.03.75/2002-03 May 9, 2003 15. EC.CO.FMD.No. 345/02.03.129(Policy)/2003-04 November 5, 2003 16. FE.CO.FMD.1072/02.03.89/2004-05 February 8, 2005 17. FE.CO.FMD. 2/02.03.129(Policy)/2005-0....