What changed
The rupee value of the special currency basket, used for deferred payment arrangements with the former USSR, was revised from Rs 65.4398 (effective September 23, 2008) to Rs 62.5050, effective November 10, 2008. This revision was made on November 5, 2008, and communicated via this circular.
What it means for you
Banks handling transactions under the Deferred Payment Protocols must use the new basket value for all settlements from November 10, 2008. This change impacts the conversion rates for payments related to these bilateral agreements, potentially affecting cash flows and reporting for lenders dealing with such legacy arrangements.
What you must do
- Update internal systems and reference rates to reflect the new basket value of Rs 62.5050 from November 10, 2008.
- Notify all concerned constituents, including corporate clients, about the revised rate for transactions under the Deferred Payment Protocols.
- Ensure compliance with FEMA provisions under Sections 10(4) and 11(1) while implementing this change.
Who it affects
AD Category-I banks handling deferred payment transactions with the erstwhile USSR, Corporate clients with outstanding obligations under the Deferred Payment Protocols
What is the special currency basket mentioned in this circular?
It is a basket of currencies used to determine the rupee value for payments under the Deferred Payment Protocols signed between India and the erstwhile USSR in 1981 and 1985.
When does the new rupee value of Rs 62.5050 become effective?
The revised value is effective from November 10, 2008, as per the revision that took place on November 5, 2008.