(i) Authorised dealers may enter into contracts for forward purchase and sale of foreign currency with residents who have a crystallised exposure to exchange risk in respect of genuine transactions permitted under Exchange Control Regulations.

(ii) The choice of the currency and tenor are left to the customer. Where the exact amount is not ascertainable owing to the rates/costs being linked to variable factors, contracts may be booked on the basis of a reasonable estimate. However, the maturity of the cover should not exceed the maturity of the underlying transaction.

(iii) Foreign currency loans/bonds become eligible for cover only after final approval is accorded by the Reserve Bank for the arrangement. In respect of Global Depository Receipts (GDRs) the issue price should have been finalised to be eligible for cover.

(iv) Balances in the EEFC accounts may be allowed to be sold forward by the account holders provided they remain earmarked for delivery. Such contracts should not, however, be cancelled.

(v) While booking contracts, suitable documentary evidence should be verified to ensure that an exposure exists, to the extent of the amount of cover sought. Full particulars of contract should be marked on such documents under proper authentication and copies thereof retained on record for verification.

(vi) Contracts involving rupee as one of the currencies, once cancelled cannot be re-booked. They may, however, be rolled over at ongoing rates on or before maturity.

(vii) As an exception to (vi) above, contracts covering export transactions may be cancelled, re-booked and rolled over at ongoing rates.

(viii) Substitution of contracts covering trade transactions may be permitted, if the authorised dealer is satisfied after verification of suitable documentary evidence, with the circumstances under which such substitution has become necessary.