What changed
RBI observed that some banks still fail to comply with earlier circulars (Nov 2000 and Mar 2003) on reporting revaluation data in Annexure A to Form A Return. The circular reiterates that 'revaluation value' in Column 3 must be the gain/loss due to exchange rate changes between the current and immediate preceding reporting Friday. Banks are now directed to ensure strict compliance.
What it means for you
Banks must correct any misreporting of foreign currency revaluation data to avoid regulatory scrutiny. Accurate weekly reporting of revaluation gains/losses is critical for RBI's monitoring of foreign currency exposure. Non-compliance could lead to penalties or further supervisory action. This reinforces the need for robust internal controls in treasury and reporting functions.
What you must do
- Review current reporting process for Annexure A to ensure revaluation value is computed as exchange rate change between current and previous reporting Friday.
- Train relevant staff in treasury and compliance on the correct methodology for revaluation gain/loss calculation.
- Conduct an internal audit of recent Form A submissions to identify and rectify any non-compliant data.
- Acknowledge receipt of this circular to RBI as instructed.
Who it affects
All Scheduled Commercial Banks (excluding Regional Rural Banks), Treasury departments handling foreign currency assets/liabilities, Compliance and reporting teams responsible for Form A Return
What exactly is the 'revaluation value' in Column 3 of Annexure A?
It is the gain or loss on foreign currency assets/liabilities due to exchange rate changes between the current reporting Friday and the immediate preceding reporting Friday.
Which earlier circulars are being referenced?
Circular DBOD.No.BC.50/12.01.001/2000-01 dated November 7, 2000 and DBOD.No.78/12.01.001/2002/03 dated March 7, 2003.
What happens if we don't comply?
RBI has noted persistent non-compliance and expects strict adherence. Continued non-compliance may lead to regulatory action, including penalties or enhanced scrutiny.