What changed
The rupee value of the special currency basket under the Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between India and the erstwhile USSR was revised from Rs.60.4392 (effective August 12, 2008) to Rs.63.0186, effective September 17, 2008. This revision was communicated via A.P. (DIR Series) Circular No. 18 dated September 26, 2008.
What it means for you
For banks handling deferred payment transactions under these protocols, the new basket value impacts the rupee equivalent of payments due. Lenders must ensure accurate conversion and settlement for trade-related obligations with entities linked to the erstwhile USSR. This change reflects currency fluctuations in the basket and requires immediate operational adjustment.
What you must do
- Update internal systems and records with the new special currency basket value of Rs.63.0186 effective September 17, 2008.
- Notify all concerned constituents, including corporate clients and trade finance desks, about the revised rate.
- Ensure all deferred payment transactions under the 1981 and 1985 protocols are processed using the updated value from the effective date.
- Review and reconcile any transactions between August 12 and September 17, 2008 to apply the correct rate.
Who it affects
AD Category-I banks, Trade finance departments, Corporate clients with deferred payment obligations to the erstwhile USSR, Constituents involved in India-USSR protocol trade
What is the special currency basket referenced in this circular?
It is a basket of currencies used to determine the rupee value for deferred payments under the 1981 and 1985 protocols between India and the erstwhile USSR. RBI periodically revises this value based on exchange rate movements.
When does the new value of Rs.63.0186 take effect?
The revised value is effective from September 17, 2008, as per the circular dated September 26, 2008. Transactions on or after this date must use the new rate.
Do we need to adjust past transactions?
The circular does not specify retroactive adjustments. However, banks should ensure that any transactions between August 12 and September 17, 2008 are correctly recorded using the applicable rate for that period.