RBI allows booking of forward contracts upto USD 1,000,000 by residents on simple declaration basis

By | October 9, 2015

Booking of Forward Contracts – Liberalisation

As announced in the Fourth Bi-monthly Monetary Policy Statement (para. no. 39) on September 29, 2015, with a view to further liberalising the existing hedging facilities, it has been decided to allow all resident individuals, firms and companies, who have actual or anticipated foreign exchange exposures, to book foreign exchange forward and FCY-INR options contracts up to USD 1,000,000 (USD one million) without any requirement of documentation on the basis of a simple declaration. While the contracts booked under this facility would normally be on a deliverable basis, cancellation and rebooking of contracts are permitted. Based on the track record of the entity, the concerned AD Cat-I bank may, however, call for underlying documents, if considered necessary, at the time of rebooking of cancelled contracts  All other conditions as indicated in A.P. (DIR Series) circular no. 15 dated October 29, 2007 including suitability & appropriateness (S&A) norms shall apply, mutatis mutandis. The amended application and reporting formats are provided in Annexes I and II, respectively, of this circular.

Complete Regulation : Risk Management & Inter-Bank Dealings: Booking of Forward Contracts – Liberalisation

Leave a Reply