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RBI eases forward contract cancellation and rebooking limits for exporters and importers

Current · Source: Reserve Bank of India · RBI/2013-14/227 · issued 04 Sep 2013 · ~2 min read

Quick answerRBI has increased the forward contract cancellation and rebooking limit for exporters from 25% to 50% of contracts booked in a financial year, and introduced a 25% limit for importers, effective September 4, 2013.

The rule, in the simplest words

Exporters (people who sell goods to other countries) can now cancel and rebook (change their mind and redo) up to 50% of their forward contracts (agreements to exchange currency at a future date) in a year, up from 25%.
Importers (people who buy goods from other countries) are now allowed to cancel and rebook up to 25% of their forward contracts in a year, which was not allowed before.
This rule started on September 4, 2013, and gives both exporters and importers more flexibility to manage their foreign exchange risk (risk of currency value changes).
Banks must tell their customers about this change and update their systems and advice to match the new limits.

How it plays out — a real example

A forex & trade-finance officer in Indore helps an exporter client who had booked forward contracts worth ₹10 crore. Before the rule, the client could only cancel and rebook up to ₹2.5 crore (25%). Now, the officer can inform the client that they can cancel and rebook up to ₹5 crore (50%), giving them more room to adjust if the rupee moves unexpectedly.

What changed

Previously, only exporters could cancel and rebook forward contracts up to 25% of their booked contracts in a financial year. Now, exporters can cancel and rebook up to 50% of such contracts, and importers are allowed to cancel and rebook up to 25% of their booked forward contracts for hedging import exposures.

What it means for you

This provides greater operational flexibility for both exporters and importers to manage foreign exchange risk. Banks need to update their hedging product offerings and advisory services to reflect the higher limits, which may increase customer engagement and hedging activity.

What you must do

Update internal systems and customer advisories to reflect the new 50% cancellation and rebooking limit for exporters.
Implement the new 25% cancellation and rebooking limit for importers in your hedging processes.
Train relationship managers and treasury staff on the revised limits to ensure accurate customer guidance.
Communicate the changes to all relevant constituents and customers as directed by RBI.

Who it affects

Category-I Authorised Dealer Banks, Exporters with forward contract hedging, Importers with forward contract hedging

❓ Common questions

Regulatory timeline

Stated effective date effective September 4, 2013
Decoded by BankPulse 2026-06-18 13:06 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new cancellation and rebooking limit for exporters?

Exporters can now cancel and rebook forward contracts up to 50% of the contracts booked in a financial year, increased from the earlier 25%.

Are importers now allowed to cancel and rebook forward contracts?

Yes, for the first time, importers are permitted to cancel and rebook forward contracts up to 25% of the contracts booked in a financial year for hedging their import exposures.

Does this circular apply to all forward contracts involving rupees?

Yes, the circular applies to forward contracts involving the rupee as one of the currencies, booked by residents to hedge current and capital account transactions, but only for contracted export or import exposures.

📜 Read the original circular — full text as issued by RBI

RBI/2013-14/227

 A.P. (DIR Series) Circular No. 36

 September 4, 2013

 To

 All Category - I Authorised Dealer Banks

 Madam/ Sir,

 Risk Management and Inter Bank Dealings

 Attention of Authorised Dealers Category-I (AD Category-I) banks is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 ( Notification No. FEMA/25/RB-2000 dated May 3, 2000 ) as amended from time to time and A.P. (DIR Series) Circular no. 58 dated December 15, 2011 and A.P. (DIR Series) Circular no. 13 dated July 31, 2012 .

 2. Under the extant regulations, the facility of cancellation and rebooking is not permitted for forward contracts, involving Rupee as one of the currencies, booked by residents to hedge current and capital account transactions.  However, exporters are allowed to cancel and rebook forward contracts to the extent of 25 percent of the contracts booked in a financial year for hedging their contracted export exposures.

 3. On a review of the evolving market conditions and with a view to providing operational flexibility to exporters and importers to hedge their foreign exchange risk, it has now been decided to:

 (a) allow exporters to cancel and rebook forward contracts to the extent of 50 percent of the contracts booked in a financial year for hedging their contracted export exposures, and

 (b) allow importers to cancel and rebook forward contracts to the extent of 25 percent of the contracts booked in a financial year for hedging their contracted import exposures.

 4. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.

 5. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.

 Yours faithfully,

 (Rudra Narayan Kar)

 Chief General Manager-in-Charge

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/227 · issued 04 Sep 2013. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

💻 IT / Systems

Update internal systems and customer advisories to reflect the new 50% cancellation and rebooking limit for exporters.

📜 Compliance

Implement the new 25% cancellation and rebooking limit for importers in your hedging processes.
Train relationship managers and treasury staff on the revised limits to ensure accurate customer guidance.
Communicate the changes to all relevant constituents and customers as directed by RBI.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (Category-I Authorised Dealer Banks, Exporters with forward contract hedging, Importers with forward contract hedging), your first concrete step on “RBI eases forward contract cancellation and rebooking limits for exporters and importers” is: “Update internal systems and customer advisories to reflect the new 50% cancellation and rebooking limit for exporters.” (RBI issued this 04 Sep 2013).

Circular: RBI/2013-14/227 -- RBI eases forward contract cancellation and rebooking limits for exporters and importers
Issued: 04 Sep 2013
Action required: Update internal systems and customer advisories to reflect the new 50% cancellation and rebooking limit for exporters.
Action required: Implement the new 25% cancellation and rebooking limit for importers in your hedging processes.
Action required: Train relationship managers and treasury staff on the revised limits to ensure accurate customer guidance.
Action required: Communicate the changes to all relevant constituents and customers as directed by RBI.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8376&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.