Date: 2020-01-06Category: Not ApplicableState: Union GovernmentCountry: India
Risk Management and Inter-bank Dealings- Permitting AD Cat-I banks to voluntarily undertake user and Inter-Bank transactions beyond onshore market hours
**Summary:**
This circular, A.P. DIR Series Circular No. 15, issued by the Reserve Bank of India (RBI) on January 6, 2020, amends the Master Direction on Risk Management and Interbank Dealing dated July 05, 2016. The circular permits Authorised Dealer (AD) Category-I banks to voluntarily undertake user (persons resident in India and persons resident outside India) and interbank foreign exchange transactions beyond onshore market hours. This includes transactions with persons resident outside India through their foreign branches and subsidiaries. This decision follows the announcement made in the Statement of Developmental and Regulatory Policies dated October 04, 2019, accepting the recommendation of the Task Force on Offshore Rupee Market. The permission allows AD Cat-I banks to offer foreign exchange prices to users at all times, either through a domestic sales team or their overseas branches, using their Indian books. The directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
For further information, contact the Financial Markets Regulation Department, Central Office Building, 9th Floor, Shahid Bhagat Singh Road, Fort, Mumbai – 400001. Tel: 9122 22601000, Fax: 9122 22702290, email: cgmfmrdrbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the Indian banking system and monetary policy.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Authorised Dealer Category-I banks: Banks authorized by the Reserve Bank of India to deal in foreign exchange.
Foreign Exchange Management Foreign Exchange Derivative Contracts Regulations, 2000: Regulations pertaining to foreign exchange derivative contracts, issued under the Foreign Exchange Management Act.
Master Direction Risk Management and Interbank Dealing: A comprehensive set of guidelines issued by the Reserve Bank of India regarding risk management and interbank dealings in the foreign exchange market.
Task Force on Offshore Rupee Market: A task force constituted to examine and make recommendations regarding the offshore Rupee market.
Persons Resident in India: Individuals or entities legally residing within the territory of India as defined by the Foreign Exchange Management Act (FEMA).
Persons Resident Outside India: Individuals or entities residing outside India, as defined by the Foreign Exchange Management Act (FEMA).
भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2019-20/136
A.P. (DIR Series) Circular No. 15 January 6, 2020
All Authorised Dealers Category-I
Madam/Sir,
Risk Management and Inter-bank Dealings- Permitting AD Cat-I banks to
voluntarily undertake user and Inter-Bank transactions beyond onshore market
hours
Attention of Authorised Dealers (ADs) is invited to the Foreign Exchange Management
(Foreign Exchange Derivative Contracts) Regulations, 2000 notified vide Notification No.
FEMA.25/RB-2000 dated May 3, 2000) issued under clause (h) of sub-section (2) of
Section 47 of FEMA, 1999 (Act 42 of 1999), as amended from time to time and the Master
Direction- Risk Management and Inter-bank Dealing dated July 05, 2016, as amended
from time to time.
2. As announced in the Statement of Developmental and Regulatory Policies dated
October 04, 2019 it has been decided to accept the recommendation of the Task Force
on Offshore Rupee Market to permit AD Cat-I banks to offer foreign exchange prices to
users at all times, out of their Indian books, either by a domestic sales team or through
their overseas branches.
3. Accordingly, the following section is being added in Part C (Inter-Bank Foreign
Exchange Dealings) of the Master Direction- Risk Management and Inter-Bank Dealings:
“6. Customer and inter-bank transactions beyond onshore market hours
Authorised dealers may undertake customer (persons resident in India and persons
resident outside India) and inter-bank transactions beyond onshore market hours.
�वत्तीय बाज़ार �व�नयमन �वभाग, क�द्र�य कायार्लय भवन, 9 वीं मंिज़ल, शह�द भगत �सहं माग,र् फोटर्, मुंबई – 400001.
फोन: (91-22) 22601000, फैक्स: (91-22) 22702290 ई-मेल: cgmfmrd@rbi.org.in
Financial Markets Regulation Department, Central Office Building, 9th Floor, Shahid Bhagat Singh Road, Fort, Mumbai – 400001.
Tel: (91-22) 22601000, Fax: (91-22) 22702290, e-mail- cgmfmrd@rbi.org.in
िहन्दी आसान ह,ै इसका प्रयोग बढ़ाइएTransactions with persons resident outside India, through their foreign branches and
subsidiaries may also be undertaken beyond onshore market hours.”
4. 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,
(Saswat Mahapatra)
Deputy General Manager (O-i-C)