What changed
Earlier, banks used FEDAI indicative rates at 12 noon for four major currencies to compute rupee liability under FCNR(B) for CRR. Now, banks must use the RBI Reference Rate published on its website around 12:30 pm for converting foreign assets/deposits in Form A Return.
What it means for you
This aligns CRR computation with RBI's official exchange rate, reducing arbitrage between FEDAI and RBI rates. Banks need to update their systems to fetch the RBI Reference Rate instead of FEDAI rates for reporting. The change ensures uniformity in regulatory reporting across all scheduled commercial banks.
What you must do
- Update your CRR calculation system to use RBI Reference Rate (published at ~12:30 pm) instead of FEDAI indicative rates for FCNR(B) deposits.
- Ensure Form A Return for the fortnight ending July 13, 2012, reflects the new conversion method.
- Train treasury and compliance teams on the revised rate source and timing.
- Verify that all four major currencies (USD, GBP, JPY, EUR) are converted using the correct RBI Reference Rate.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Treasury departments handling FCNR(B) deposits, Compliance teams managing CRR reporting, IT teams responsible for regulatory reporting systems
Which rate replaces the FEDAI indicative rate for CRR on FCNR(B)?
The RBI Reference Rate announced on the RBI website at around 12:30 pm replaces the FEDAI indicative rate (previously at 12 noon) for converting foreign assets/deposits in Form A Return.
From when is this change effective?
The change is effective from the reporting fortnight ending July 13, 2012.
Does this apply to all currencies under FCNR(B)?
Yes, it applies to all four major currencies (US dollar, GBP, Japanese Yen, and Euro) as specified in the earlier circulars.