The Reserve Bank of India (RBI) said on Thursday that it has decided to fix the intra-day open position / daylight limit of the Authorised Dealers (AD) at five times the Net Overnight Open Position Limit available to them or the existing Intra-day open position limit as approved by the central bank, whichever is higher, for positions involving Rupee as one of the currencies.
It may be recalled that in a circular dated Dec. 15, 2011, the RBI had stated that intra-day open position / daylight limit should not exceed the erstwhile Net Overnight Open Position Limit available.
It was further clarified on Dec. 21, 2011 that restrictions placed on Intraday positions limits is only applicable for positions involving Rupee as one of the currencies.
In a separate move on Thursday, the RBI said that 50% of the balances in the EEFC accounts should be converted forthwith into rupee balances and credited to the rupee accounts as per the directions of the account holder. This process may be completed within a fortnight from the date of the circular, the RBI said in a circular.
Also, in respect of all future forex earnings, an exchange earner is eligible to retain 50% (as against the previous limit of 100%) in non-interest bearing EEFC accounts, the RBI said today. The balance 50% shall be surrendered for conversion to rupee balances, it said.
The facility of EEFC scheme is intended to enable exchange earners to save on conversion/transaction costs while undertaking forex transactions in future, the RBI said. This facility is not intended to enable exchange earners to maintain assets in foreign currency, as India is still not fully convertible on Capital Account, the central bank added.
Accordingly, EEFC account holders henceforth will be permitted to access the forex market for purchasing foreign exchange only after utilising fully the available balances in the EEFC accounts, the RBI said.
Authorised Dealers (AD) may, accordingly, obtain a declaration while selling foreign exchange to their constituents, the RBI said today.