RBI/2011-12/272
A. P. (DIR Series) Circular No. 50
November 23, 2011
To,
All Category - I Authorised Dealer Banks
Madam / Sir,
Comprehensive Guidelines on Over the Counter (OTC) Foreign Exchange Derivatives
– Foreign Currency – INR swaps
Attention of the Authorised Dealer Category - I (AD Category - I) banks is
invited to
A.P. (DIR Series) Circular No. 32 dated December 28, 2010, which sets
out the guidelines governing the foreign exchange derivative contracts. In terms
of the sub-para (iv) (c) on Foreign Currency-INR swaps in para 1 of the Part
B.I. of the Section B in the Annex to the A.P. (DIR Series) Circular No. 32
dated December 28, 2010 the extant instructions state that “Swap transactions
may be undertaken by AD Category I banks as intermediaries by matching the
requirements of corporate counterparties. While no limits are placed on the AD
Category I banks for undertaking swaps to facilitate customers to hedge their
foreign exchange exposures, a limit of USD 100 million is placed for net supply
of foreign exchange in the market….”
- On a review, it has been decided to remove the above limit of USD 100 million
placed for these swap transactions.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers concerned.
- 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,
(Meena Hemchandra)
Chief General Manager-in-Charge