What changed
The Rupee value of the special currency basket, previously set at Rs.62.788607 from July 7, 2010, was revised to Rs.64.7004 effective January 31, 2011. This revision was made on January 26, 2011, and communicated via this circular.
What it means for you
Banks handling deferred payment transactions under the 1981 and 1985 protocols with the erstwhile USSR must use the new basket value for settlements from January 31, 2011. This impacts the Rupee equivalent of payments under these agreements, affecting cash flows and accounting for lenders involved in such trade.
What you must do
- Update internal systems to reflect the new special currency basket value of Rs.64.7004 effective January 31, 2011.
- Notify all concerned constituents, including importers and exporters, about the revised rate.
- Ensure all transactions under the Deferred Payment Protocols from January 31, 2011, use the updated basket value.
- Review and adjust any pending settlements or contracts referencing the old rate.
Who it affects
AD Category-I banks, Constituents involved in trade with the erstwhile USSR under the Deferred Payment Protocols, Importers and exporters using these protocols
What is the special currency basket and why was its value revised?
The special currency basket is used to determine the Rupee value for deferred payment transactions under the 1981 and 1985 protocols with the erstwhile USSR. The revision reflects changes in the basket's composition or exchange rates, as determined by RBI.
From which date is the new basket value effective?
The new Rupee value of Rs.64.7004 is effective from January 31, 2011, as per the revision made on January 26, 2011.
Do I need to take any action if I am not an AD Category-I bank?
This circular is directed at AD Category-I banks. If you are a constituent, your bank should inform you of the change. No direct action is required from you.