| Date: |
28-04-2016
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| Notification No: |
RBI/2015-16/386 A.P. (DIR Series) Circular No. 66
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
RBI/2015-16/386 |
| Subject: |
Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-Resident Exchange Houses: Rupee Drawing Arrangement
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RBI/2015-16/386
A.P. (DIR Series) Circular No. 66
April 28, 2016
To,
All Authorised Dealer Category-I Banks
Madam / Sir,
Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts
of Non-Resident Exchange Houses: Rupee Drawing Arrangement
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to
paragraph (C) 3 vii of the
A. P. (DIR Series) Circular No. 28 [A. P. (FL/RL
Series) Circular No. 02] dated February 06, 2008 and paragraph No. 3(h) and 5C
of Master Direction No.2 dated January 1, 2016 on Opening and Maintenance of
Rupee / Foreign Currency Vostro Accounts of Non-Resident Exchange Houses: Rupee
Drawing Arrangement regarding collateral cover under Speed Remittance Procedure
which inter-alia stipulated that the Exchange Houses shall keep with the AD
Category - I bank a cash deposit in any convertible foreign currency equivalent
to three days’ estimated drawings on which market related interest rate may be
paid. The Exchange House can also keep the said collateral in the form of
guarantees from a bank of international repute. The adequacy of collateral
should be reviewed by the AD Category - I bank at regular intervals. These
requirements were relaxed vide
A. P. (DIR Series) Circular No. 16 [A. P. (FL/RL
Series) Circular No. 3] dated November 27, 2009 and the collateral requirement
was brought down to one day’s estimated drawings.
- To further streamline the remittance arrangement under the Speed
Remittance Procedure and make remittances cost-effective, it has now been
decided to do away with the mandated requirement of maintenance of
collateral or cash deposits by the Exchange Houses with whom the banks have
entered into the Rupee Drawing Arrangement. The AD banks are free to
determine the collateral requirement, if any, based on factors, such as,
whether the remittances are pre-funded, the track record of the Exchange
House, whether the remittances are effected on gross (real-time) or net
(file transfer) basis, etc., and may frame their own policy in this regard.
- Master Direction No.2 dated January 1, 2016 is being updated, to reflect
the changes. The other instructions issued vide the above mentioned
circulars 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), as amended from time to time and are without prejudice to permission
/approvals, if any, required under any other law.
Yours faithfully,
(Shekhar Bhatnagar)
Chief General Manager-in-Charge
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