RBI/2008-09/304
A. P. (DIR Series) Circular No. 37
A. P. (FL/RL Series) Circular No. 02
December 02, 2008
To,
All Authorized Dealer Category - I Banks
Madam / Sir,
Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign
Currency Vostro Accounts of Non-resident Exchange Houses
Attention of Authorized Dealer Category - I (AD Category-I) banks is invited to
the Memorandum of Instructions for Opening and Maintenance of Rupee / foreign
currency Vostro accounts of Non-resident Exchange Houses, issued vide
A. P. (DIR
Series) Circular No. 28 [A. P. (FL/RL Series) Circular No. 02] dated February 6,
2008.
- The existing instructions have been reviewed and modified as under :
(a) In terms of para C 1 (v) of Annex - I to the abovementioned circular, the
Exchange House has the responsibility of arranging for the transfer of the sum
collected on any particular day to the DDA account. Further, the float period
for the funds with DDA account will be decided by the drawee bank in
consultation with the Exchange House subject to a maximum of three days.
With a view to give more flexibility to Exchange Houses, the maximum float
period has been enhanced from three days to five days.
(b) In terms of para C 2 of Annex - I to the abovementioned circular, under
Non-DDA procedure, the Exchange House shall keep a cash deposit of USD
equivalent to 15 days drawings on moving average basis in India or abroad. The
Exchange House shall also furnish bank guarantee from an international bank of
repute for an equivalent amount.
In view of the reduction in time lag between issuance of drafts and payment to
the beneficiaries, the period for the collateral requirement has been reduced
from 30 days (viz. cash deposit and bank guarantee each for an amount equivalent
to 15 days drawings on moving average basis in India or abroad) to 10 days,
which can be kept either in the form of cash deposit or a bank guarantee from an
international bank of repute.
- The other instructions issued vide the abovementioned circular shall remain
unchanged.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents concerned.
- The directions contained in this circular have been issued under Section 10(4)
and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
is without prejudice to permissions/ approvals, if any, required under any other
law.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in-Charge