What changed
The Memorandum ACM, which outlines procedures for channeling transactions through the Asian Clearing Union, has been revised to reflect changes in the settlement system decided at the 37th ACU Board Meeting in June 2008. The updated memorandum is annexed to this circular.
What it means for you
Banks handling ACU transactions must align their internal processes with the revised settlement procedures. This ensures compliance with the updated ACU mechanism and avoids disruptions in cross-border clearing. Non-compliance could lead to regulatory action under FEMA.
What you must do
- Review the revised Memorandum ACM annexed to the circular and update internal procedures accordingly.
- Communicate the updated ACU transaction procedures to all relevant constituents.
- Ensure your settlement systems reflect the changes from the 37th ACU Board Meeting.
- Train staff handling ACU transactions on the new settlement mechanism.
Who it affects
Authorised Dealer Category-I banks, Constituents of AD Category-I banks involved in ACU transactions
What is the Asian Clearing Union (ACU)?
The ACU is a payment arrangement among central banks of certain Asian countries to settle payments for intra-regional transactions, reducing reliance on external currencies.
When was the 37th ACU Board Meeting held?
The 37th ACU Board Meeting was held in June 2008, where changes to the settlement system were decided.
What legal authority does this circular have?
This circular is issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, and is without prejudice to other permissions required under any law.