RBI/2011-12/373
A. P. (DIR Series) Circular No.72
January 30, 2012
To
All Category-I Authorised Dealer Banks
Madam / Sir,
Memorandum of Instructions for Opening and Maintenance of Rupee /Foreign Currency Vostro Accounts of Non-resident Exchange Houses
Attention of Authorised Dealer Category – I (AD Category – I) banks is invited
to the Paragraph nos. (A) (1) and (A) (3) (ix) of Annex-I to the
A.P.(DIR
Series) Circular No. 28 [A.P. (FL/RL Series) Circular No. 02] dated February 6,
2008 on Memorandum of Instructions for Opening and Maintenance of Rupee /
Foreign Currency Vostro Accounts of Non-resident Exchange Houses and subsequent
amendments thereto in terms of which prior approval of the Reserve Bank is
required for opening and maintaining rupee vostro accounts of non-resident
Exchange Houses.
- With a view to give more operational leeway to the AD Category-I banks, it
has been decided to dispense with the requirement of prior approval of the
Reserve Bank for opening and maintaining each Rupee Vostro account in India of
non-resident Exchange Houses in connection with the Rupee Drawing Arrangements
(RDAs) that banks enter into with them. Accordingly, AD Category-I banks may
take approval of the Reserve Bank the first time they enter into the above
arrangement with non-resident Exchange Houses from Gulf countries, Hong Kong,
Singapore and Malaysia. Subsequently, they may enter into RDAs, subject to the
prescribed guidelines and inform the Reserve Bank immediately.
- Once the total number of Rupee Drawing Arrangements (RDAs) reaches twenty,
the AD Category-I bank may cause a detailed external Audit of their internal
system to ensure that it is working satisfactorily. Based on the satisfactory
report, the Board of AD Category-I banks may authorise more such arrangements. A
copy of the Board Note together with Board Resolution in the matter may be filed
with the Reserve Bank and new arrangements informed to the Reserve Bank as
indicated in Para 2.
- All other instructions contained in the A.P.(DIR Series) Circular No. 28
[A.P. (FL/RL Series) Circular No. 02] dated February 6, 2008, as amended from
time to time, 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 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