Risk Management and Inter-Bank Dealings – Facilities for Hedging Trade Exposures invoiced in Indian Rupees

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ngs dated July 5, 2016 as amended from time to time. 2. In terms of para 6 under Section II (Facilities for Persons Residents outside India) of the aforementioned master direction, non-residents are permitted to hedge the currency risk arising out of INR invoiced exports from and imports to India with AD Category I banks in India. On a review of this facility, it has been decided to permit the central treasury (of the group and being a group entity) of such non-residents to undertake hedges for and behalf of such non-residents with AD Category I banks in India as per the existing Model I and Model II. The revised operational guidelines, terms and conditions are placed at Annex to this circular. 3. The directions contained in this circ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... there is an underlying trade transaction (scanned copies would be acceptable). The following undertakings also need to be taken from the customer: a.    That the same underlying exposure has not been hedged with any other AD Category I bank/s in India b    If the underlying exposure is cancelled, the customer will cancel the hedge contract immediately c     In case of a central treasury, an authorization from the entity having INR exposure to hedge on its behalf iii. A certification on the end client KYC may also be taken as a one-time document from the overseas bank by the AD bank in India. iv. The AD bank in India based on documents received from the overseas correspondent ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....with the AD bank in India i. The overseas exporter / importer or its central treasury approaches the AD bank in India with a request for forward cover in respect of underlying transaction for which he furnishes appropriate documentation (scanned copies would be acceptable), on a pre-deal basis to enable the AD bank in India to satisfy itself that there is an underlying trade transaction, and details of his overseas banker, address etc. The following undertakings also need to be taken from the customer a    That the same underlying exposure has not been hedged with any other AD Category I bank/s in India. b    If the underlying exposure is cancelled, the customer will cancel the hedge contract immediate....