Reserve Bank today relaxed the norms for forex hedging for exporters and importers by allowing them to book forward foreign exchange contracts in excess of 50 per cent of the eligible limit.
“It has now been decided that, henceforth, banks may permit aggregate outstanding contracts in excess of 50 per cent of the eligible limit on being satisfied about the genuine requirements of their customers after examination of a document…signed by the CFO and CS,” RBI said in a statement.
However, approval is subject to some conditions including a declaration that all guidelines have been adhered to while utilising the facility.
Besides, a certificate of import or export turnover of the customer during the past three years have to be attached, it said.
It further said that in the absence of a Company Secretary (CS), the CEO or the COO shall co-sign the undertaking along with the CFO.
RBI had eased norms related with the hedging last year by allowing them to book contract up to 50 per cent of the eligible limit.