What changed
The eligible limit for booking forward contracts under the past performance route for resident importers has been increased from 25% to 50% of the eligible limit. The eligible limit remains the higher of the average of the previous three financial years' import turnover or the previous year's actual import turnover. Importers who already booked contracts up to the old 25% limit in the current financial year can now book the additional difference up to the new 50% limit.
What it means for you
AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers. This change provides importers with greater flexibility in hedging facility.
What you must do
- Bring the contents of this circular to the notice of your constituents and customers.
- Ensure compliance with all other existing operational guidelines, terms and conditions which apply mutatis mutandis.
Who it affects
AD Category-I banks, Resident importers using past performance hedging
How is the eligible limit calculated for past performance hedging?
The eligible limit is the higher of the average of the previous three financial years' import turnover or the previous year's actual import turnover.
Can importers who already booked contracts at 25% now book more?
Yes, they are eligible to book the difference between the new 50% limit and the amount already booked in the current financial year.
Does this circular change any other operational guidelines?
No, all other operational guidelines, terms, and conditions remain unchanged and apply mutatis mutandis.