What changed
The rupee value of the special currency basket, used for deferred payment protocols between India and the erstwhile USSR, was revised from Rs. 54.9580 (effective May 3, 2007) to Rs. 56.6777, effective November 29, 2007. This revision was communicated via A. P. (DIR Series) Circular No. 25 dated January 25, 2008.
What it means for you
Banks handling transactions under these protocols must apply the new basket value for settlements from the effective date. The change reflects adjustments in the underlying currency composition, impacting the rupee equivalent of outstanding payments. Lenders should ensure accurate conversion and reporting to avoid discrepancies.
What you must do
- Update internal systems to reflect the revised basket value of Rs. 56.6777 from November 29, 2007.
- Notify all concerned constituents, including corporate clients, about the new rate for transactions under the deferred payment protocols.
- Ensure compliance with FEMA Sections 10(4) and 11(1) while implementing this revision.
- Review past transactions since November 29, 2007, to confirm correct application of the updated value.
Who it affects
AD Category-I banks handling deferred payment protocol transactions, Corporate clients with outstanding payments under India-USSR protocols, RBI's foreign exchange monitoring divisions
What is the special currency basket mentioned in this circular?
It is a basket of currencies used to determine the rupee value for deferred payment transactions between India and the erstwhile USSR, as per protocols dated April 30, 1981 and December 23, 1985.
When does the revised rupee value take effect?
The new value of Rs. 56.6777 is effective from November 29, 2007, as per the revision that took place on November 26, 2007.
What should banks do if they have already processed transactions at the old rate after November 29, 2007?
Banks should review such transactions and adjust them to reflect the correct basket value, ensuring compliance with the circular's effective date.