What changed
The rupee value of the special currency basket, previously set at Rs. 63.0186 effective September 17, 2008, has been revised to Rs. 65.4398 effective September 23, 2008. This revision took place on September 18, 2008, and was communicated via this circular dated October 16, 2008.
What it means for you
Banks handling deferred payment transactions under the 1981 and 1985 protocols with the erstwhile USSR must use the new basket value for settlements from September 23, 2008. This change impacts the conversion rates for related trade and debt payments, potentially affecting cash flows and reporting.
What you must do
- Update internal systems and exchange rate feeds with the new basket value of Rs. 65.4398 effective September 23, 2008.
- Notify all concerned constituents, including corporate clients involved in deferred payment transactions with the erstwhile USSR.
- Ensure compliance with FEMA Sections 10(4) and 11(1) while implementing this revision.
Who it affects
AD Category-I banks handling deferred payment protocols, Corporate clients with trade or debt obligations under the 1981/1985 protocols with the erstwhile USSR
What is the special currency basket and why was its value revised?
The special currency basket is used to determine the rupee value for deferred payment transactions under protocols between India and the erstwhile USSR. The revision reflects changes in underlying currency exchange rates, as determined by RBI.
From which date is the new basket value effective?
The new rupee value of Rs. 65.4398 is effective from September 23, 2008, as per the revision made on September 18, 2008.
Do we need to adjust past transactions settled before September 23, 2008?
No, the circular applies prospectively from the effective date. Transactions settled before September 23, 2008, should use the earlier value of Rs. 63.0186.