Non Resident can enter into foreign exchange derivative contract with bank in India to hedge an exposure

By | March 20, 2017
(Last Updated On: March 20, 2017)

RESERVE BANK OF INDIA

(Financial Markets Regulatory Department)

(CENTRAL OFFICE)

NOTIFICATION

Mumbai, the 17th March, 2017

No. FEMA. 384/RB-2017 Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2017

G.S.R. 260(E).—In exercise of the powers conferred by clause (h) of sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank hereby makes the following amendments in the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 (Notification No. FEMA 25/RB-2000 dated May 3, 2000), namely:—

1. Short Title and Commencement

(i) These regulations may be called the Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2017.

(ii) They shall be come into force from the date of their publication in the Official Gazette.

2. Amendment under Schedule II: In the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 (Notification No. FEMA 25/RB-2000 dated May 3, 2000), in Schedule II, after the existing para 6, the following shall be added, namely:

A non-resident may enter into a foreign exchange derivative contract with an Authorised Dealer bank in India to hedge an exposure to exchange risk of and on behalf of its Indian subsidiary in respect of the said subsidiary’s transactions subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time.

[F. No. 1/15/EM/2015] T. RABI SANKAR,

Chief General Manager

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