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CHEMEXCIL
Basic Chemicals, Cosmetics & Dyes Export Promotion Council
(Set-up by Ministry of Commerce and Industry, Govt of India)
Jhansi Castle, 4th Floor, 7 Cooperage Road, Mumbai - 400 001.India.
Tel : +91 22 22021288 / * Fax : +91 22 22026684
* E-mail : info@chemexcil.gov.in Web : https://chemexcil.in
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EPC/LIC/RBI/HEDGING
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10th Nov 2017
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ALL MEMBERS OF THE COUNCIL
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RBI
Simplified Hedging Facility
(Risk Management and Inter-Bank Dealings)
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Dear Members,
Kindly note that Reserve Bank of India (RBI) has issued Circular no. RBI/2017-18/88 A.P. (DIR Series)Circular No. 11 dated 09/11/2017 regarding Simplified Hedging Facility for Residents and Non-Residents which permits hedging of exchange rate risk on transactions, contracted or anticipated, permissible under Foreign Exchange Management Act (FEMA), 1999 of up to USD 30 million or its equivalent, on a gross basis.
The scheme of simplified hedging facility was first announced by the RBI in August 2016 and the draft scheme was released on April 12, 2017.
The facility is being introduced with a view to simplify the process for hedging exchange rate risk by reducing documentation requirements, avoiding prescriptive stipulations regarding products, purpose and hedging flexibility, and to encourage a more dynamic and efficient hedging culture.
The guidelines of this facility are given in Annex I to this RBI circular and this facility will be effective from January 01, 2018.
Members are requested to take note of the above facility. For full details, members may refer to the circular available on below link-
https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11162&Mode=0
Thanking You,
Yours faithfully,
S.G. BHARADI
EXECUTIVE DIRECTOR
CHEMEXCIL
RBI Simplified Hedging Notification
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