New Guidelines on EEFC account balances - July 31 Circular

*Further Relaxations to Exchange Earners, *****

*Exporters and AD Category-I Banks *****

Reserve Bank of India has reviewed the extant guidelines governing Exchange
Earner's Foreign Currency (EEFC) Accounts, cancellation and rebooking of
forward contracts booked by the exporters and the Net Overnight Open
Position Limit (NOOPL) of the Authorised Dealer Category-I Banks. In order
to provide operational flexibility to exchange earners/ exporters and AD
Category-I banks, it has been decided: ****

• To restore the erstwhile stipulation of allowing credit of 100 percent
foreign exchange earnings to the EEFC accounts subject to the condition
that the sum total of the accruals in the account during a calendar month
should be converted into Rupees on or before the last day of the succeeding
calendar month after adjusting for utilization of the balances for approved
purposes or forward commitments; ****

• To allow exporters to cancel and rebook forward contracts to the extent
of 25 percent of the total contracts booked for hedging their exposure; and
****

• For computation of Net Overnight Open Position involving Rupee as one of
the currencies, AD Category-I banks need not include the positions taken by
their overseas branches and also the delta of the Options Position. It is,
however, clarified that these positions will continue to be part of the
total NOOPL along with cross-currency positions and positions arising out
of exchange traded currency futures/options transactions for calculation of
the total foreign currency exposure of banks. ****

*R. R. Sinha *****

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*Press Release : 2012-2013/165 *Deputy General Manager****