What changed
The rupee value of the special currency basket, used for deferred payment arrangements between India and the erstwhile USSR, was revised downward from Rs 60.5718 to Rs 58.6670. This change took effect from April 7, 2008, following a revision on April 2, 2008.
What it means for you
For banks handling transactions under the Deferred Payment Protocols, this revision directly impacts the conversion rates for related payments and settlements. The lower rupee value means a stronger rupee against the basket, potentially reducing the rupee outlay for importers or borrowers under these protocols.
What you must do
- Update internal systems and records with the new basket value of Rs 58.6670 effective April 7, 2008.
- Inform all concerned constituents, including corporate clients dealing with deferred payment transactions under the India-USSR protocols.
- Ensure compliance with FEMA provisions (Sections 10(4) and 11(1)) while applying the revised rate.
Who it affects
Authorised Dealer Category-I banks, Corporate clients with deferred payment obligations under India-USSR protocols, Constituents involved in trade settlements linked to the special currency basket
What is the special currency basket referenced 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 under protocols signed in 1981 and 1985.
When does the new rupee value of Rs 58.6670 become effective?
The revised value is effective from April 7, 2008, as per the revision that took place on April 2, 2008.
Do I need to take any action if my bank does not handle these protocols?
If your bank is an AD Category-I bank, you must still bring the circular to the notice of any constituents who may be affected, even if your bank has no direct exposure.