What changed
The Rupee value of the special currency basket was revised from Rs.63.0402 (effective May 31, 2010) to Rs.60.8816, effective June 24, 2010. This update follows the previous circular (No.55 dated June 15, 2010) and applies to the Deferred Payment Protocols of April 30, 1981 and December 23, 1985 between India and the erstwhile USSR.
What it means for you
Banks handling deferred payment transactions under these protocols must use the new basket value for settlements from June 24, 2010. This impacts the Rupee equivalent of payments linked to the special currency basket, affecting trade-related forex operations. AD Category-I banks need to ensure accurate application to avoid discrepancies in cross-border payments.
What you must do
- Update internal systems to reflect the revised Rupee value of Rs.60.8816 for the special currency basket effective June 24, 2010.
- Notify all concerned constituents, including corporate clients involved in trade with Russia, about the new rate.
- Ensure compliance with FEMA sections 10(4) and 11(1) while processing transactions under the Deferred Payment Protocols.
- Cross-verify that no other permissions or approvals are needed under other laws for affected transactions.
Who it affects
AD Category-I banks, Corporate clients engaged in trade with the erstwhile USSR under the Deferred Payment Protocols, Treasury and forex operations teams
What is the special currency basket and why is its Rupee value revised?
The special currency basket is used under the Deferred Payment Protocols between India and the erstwhile USSR to settle trade payments. Its Rupee value is revised periodically by RBI based on exchange rate movements, as seen in this update from Rs.63.0402 to Rs.60.8816.
Which transactions are affected by this circular?
Transactions under the Deferred Payment Protocols dated April 30, 1981 and December 23, 1985, which involve payments between India and the erstwhile USSR, are affected. Banks must use the new rate for settlements from June 24, 2010.
What should AD Category-I banks do if they have already processed transactions at the old rate after June 24?
Banks should immediately adjust any transactions processed after the effective date using the old rate, and ensure all future settlements use the revised value of Rs.60.8816. They must also inform constituents and maintain compliance with FEMA provisions.