Musing of FEDAI, Forex Market and Indian Rupee

Source :www.rbi.org.in                                   Uploaded on RBI website : April 11, 2012

Friends,

Shri Harun R Khan, Deputy Governor, RBI has delievered a keynote address at the 7th Annual Conference of FEDAI at Zurich April 5, 2012. It includes the following key points -

1. FEDAI to gradually assume the role of a full-fledged  Self Regulatory Organisation (Para 9). [for information, SRO - a non government organisation, which has power to create and enforce industry         regulations and standards]
2. A group is formed by member banks of FEDAI and RBI to develop an e-learning module, which will help to improve the forex related customer service, reduce incidents of complaints and bring down the level of correspondence seeking clarifications (Para 10)
3. FEDAI to frame a Citizen Charter in the area of forex business (Para 10)
4. Offer derivative products to corporates, who understand the nature of inherent risk and have a well laid down Risk Management Policy. Also mandatory to offer a tool or a calculator so these corporates can mark to market derivative products on a continuous basis (Para 14)
5. Banks to have a Board approved policy covering un-hedged forex exposure of all the clients including SMEs. Evaluate the risks arising out of un-hedged foreign currency exposure of the Corporates and price them in the credit risk premium (Para 15)
6. RBI would consider relaxations relating to intra-day position limits in a calibrated manner so the bank can facilitate genuine hedging needs of customers (Para 16)
7. Focus of regulator on capital account convertibility and facilitate greater use of Indian Rupee in the trade account (Para 25)

Link to view Speech Document : http://www.rbi.org.in/scripts/bs_viewspeeches.aspx

Niraj Bisht