CHAPTER 4
AUTHORISED DEALERS' DEALINGS WITH RESERVE BANK
4.1 General
4.2 Settlement of Rupee Leg
4.3 Value Date
4.4 Reporting of Transactions
4.5 Minimum and Multiple Requirements
4.6 Confirmation of Purchase/Sale from/to Reserve Bank
4.7 Payment of Rupee Value against Sale of Foreign Currencies to Reserve Bank
4.8 Submission of Information about Principals by Authorised Dealers' Overseas
Correspondents
AUTHORISED DEALERS' DEALINGS WITH RESERVE BANK
General
4.1
- Authorised dealers have recourse to Reserve Bank to sell/buy U.S.
dollars to
the extent the latter is prepared to transact in the currency at a given
point of time.
- Reserve Bank will buy/sell only U.S. dollar. It will not ordinarily
buy/sell
any other currency from/to authorised dealers.
- Reserve Bank will quote its spot buying rate for US dollar to any authorised dealer
who makes a specific request to Reserve Bank Dealing Room in the Department
of External Investments & Operations (DEIO), Central Office, Mumbai. The
rate quoted by the Dealing Room will hold good only for the specific
transaction and is subject to change unless deal is concluded immediately.
NOTE: Funding of or absorbing excess liquidity in ACU dollar account is
arranged by Reserve Bank in accordance with the procedure laid down in
Memorandum ACM.
Settlement of Rupee Leg
4.2 The settlement of Rupee leg of the transactions can be effected at the
request of authorised dealer at any of the Reserve Bank Offices (Deposit
Accounts Department) at Ahmedabad, Bangalore,
Calcutta, Chennai, Kanpur, Mumbai, Nagpur and New Delhi. While concluding
the deal, the authorised dealer should clearly indicate the office of
Reserve Bank at which settlement of the Rupee leg is desired.
Value Date
4.3 The contract for purchase/delivery of U.S. dollar will be entered into
by Reserve Bank on
days on which the dealing room (DEIO) of Reserve Bank is open for business.
No transaction in foreign currency will be entered into by Reserve Bank on
Saturdays. The value date for spot as well as forward delivery should be in
conformity with the national and international practice in this regard.
Reporting of Transactions
4.4 All transactions with Reserve Bank should be reported in R Return. Form
A2 need not be
completed in respect of sale of foreign currency to Reserve Bank.
Minimum and Multiple Requirements
4.5 The purchase and sale of U.S. dollar will be made by Reserve Bank
ordinarily in multiple of
U.S.$ 500,000 with the minimum of U.S.$ 1 million.
Confirmation of Purchase/Sale
from/to Reserve Bank
4.6 Confirmation of the sale and purchase of U.S. dollar to/from the Reserve
Bank may be sent
immediately in the form RBM 1 and RBM 2 respectively to the Back-up Section
of DEIO, Central Office, Reserve Bank of India, Mumbai. The confirmation may
be sent by hand delivery, telex, or fax.
Payment of Rupee Value against Sale of
Foreign currencies to Reserve Bank
4.7 The payment of the rupee value will be made by the concerned office of
Reserve Bank (cf.
paragraph 4.2) to the current account of the authorised dealer on the
appropriate value date without waiting for the credit intimation from
Reserve Bank's overseas correspondent. If the foreign currency amount is not
delivered to the overseas correspondent of Reserve Bank on the value date,
interest will be charged at the Reserve Bank Rate on the rupee value
credited to the account of the authorised dealer for the number of days of
default. In order that the overdue interest may be recovered in such cases
automatically by debit to their account with the concerned office of Reserve
Bank, authorised dealers should lodge a suitable standing authority with
Reserve Bank. Cases of undue delay will attract penalties, apart from
overdue interest.
Submission of Information about Principals
by Authorised Dealers' Overseas Correspondents
4.8 Authorised dealers should leave standing instructions with their
overseas correspondents to
indicate clearly the name of the principal (i.e. the name of the Indian
office/branch of the authorised dealer) on whose behalf the U.S. dollar
amount is delivered to Reserve Bank's account with the Federal Reserve Bank
of New York, New York.