RESERVE BANK OF INDIA
Foreign Exchange Department
Central Office
Mumbai - 400 001
A. P. (DIR Series) Circular No. 122
May 09, 2012
To,
All Authorised Dealer Category - I Banks
Madam / Sir,
Risk Management and Inter Bank Dealings
Attention of Authorized Dealers Category – I (AD Category – I) banks is
invited to
A.P. (DIR Series) Circular No.92 dated April 4, 2003 on the captioned subject.
- In terms of paragraph C 4(iv) of the aforesaid circular, AD banks have been
permitted to deploy foreign currency funds for granting 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.
- The Reserve Bank of India has reviewed the interest rate and the end use
of the FCNR(B) deposits vide its circular DBOD.Dir.BC.102/13.03.00/2011-12
dated May 4, 2012. Accordingly, it has been decided that FCNR(B) funds
representing deposit liabilities may be utilised for making loans to resident
constituents for meeting -
- their foreign exchange requirements or
- for the rupee working capital/capital expenditure needs of exporters
/corporates who have a natural hedge or a risk management policy for
managing the exchange risk
Subject to the prudential/interest-rate norms, credit discipline and credit
monitoring guidelines in force. Authorised dealers may be guided accordingly.
- AD Category-I banks may bring the contents of this circular to the notice of
their constituents concerned.
5. The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act 1999 (42 of 1999) and
are without prejudice to permissions/approvals, if any, required under any other
law.
- The directions contained in this circular have been issued under
sections 10(4) and 11(1) of the Foreign Exchange Management Act 1999 (42 of
1999) and are without prejudice to permissions/approvals, if any, required
under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager
RBI/2011-12/545