What changed
The Rupee value of the special currency basket, previously set at ₹65.29 effective January 11, 2010, has been revised downward to ₹63.0381 effective March 11, 2010. This revision reflects a change in the exchange rate used for deferred payment transactions under the 1981 and 1985 protocols with the former USSR.
What it means for you
For banks handling deferred payment transactions under these protocols, the lower Rupee value reduces the Rupee equivalent of foreign currency obligations, potentially lowering settlement costs for Indian importers. AD Category-I banks must ensure accurate application of the new rate for all transactions from March 11, 2010, to avoid discrepancies in reporting and settlements.
What you must do
- Update internal systems and records to reflect the new Rupee value of ₹63.0381 for the special currency basket effective March 11, 2010.
- Inform all concerned constituents, including importers and exporters dealing with deferred payments under the protocols, about the revised rate.
- Ensure compliance with FEMA sections 10(4) and 11(1) while applying the new rate to transactions.
- Review past transactions from January 11, 2010, to ensure the previous rate was correctly applied and adjust if needed.
Who it affects
AD Category-I banks handling deferred payment transactions under the 1981 and 1985 protocols, Importers and exporters with obligations under the India-USSR deferred payment agreements, RBI's foreign exchange monitoring and reporting divisions
What is the special currency basket and why is its Rupee value revised?
The special currency basket is used to value deferred payment transactions under protocols between India and the erstwhile USSR. Its Rupee value is revised periodically by RBI based on exchange rate movements, as seen in this circular.
When does the new Rupee value of ₹63.0381 take effect?
The revised value is effective from March 11, 2010, as per the circular dated April 8, 2010. Banks must apply it to all relevant transactions from that date.
What should AD Category-I banks do if they have already processed transactions at the old rate after March 11?
Banks should identify any such transactions and adjust them to reflect the correct rate of ₹63.0381, ensuring compliance with FEMA directions and informing constituents as needed.