A US Dollar-Rupee Forex Swap Facility has been introduced for fresh FCNR
(B) deposits, mobilised for a minimum tenor of three years and maximum tenor of five years. The salient features of the swap facility are as under:
o The swap facility will be available to the AD Category I banks for fresh FCNR(B) deposits mobilized in any freely convertible currency, including deposits that are renewed upon maturity, for a minimum tenor of three years and maximum tenor of five years. However, the swap facility with RBI will be available in US Dollars only.
o The tenor of the swap will be in alignment with the tenor of the underlying deposits.
o Banks are advised to maintain separate records for FCNR (B) deposits that are covered under this scheme along with proper audit trail of transactions. o Banks would be free to price these deposits as per their internal policy, but within the overall ceiling as per the extant guidelines issued by RBI.
o For FCNR (B) deposits mobilized in permissible foreign currencies other than US Dollar, banks may arrive at the equivalent US Dollar amount eligible to be swapped by converting the same at the prevailing market rates on the day of the swap deal. Banks may follow a consistent policy as far as conversion is concerned and should maintain a proper documentation (audit trails) of the procedure followed for such conversions.
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