Three state-run oil firms will receive dollars through designated banks from October 12, while rupee-linked face tighter documentation and dealer cash requirements.
A dedicated channel for oil-company dollars
The Reserve Bank of India will meet the entire daily US-dollar requirements of three public-sector oil marketing companies from October 12, while imposing tighter checks and cash-reserve requirements on rupee-linked .
The central bank announced the measures on October 10. The dollar window covers Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited. Dollars will be sold through designated banks, with the facility remaining in place until further notice.
Moneycontrol reported the window and the simultaneous restrictions; the RBI’s original releases set out the separate arrangements. The central bank said the dollar facility followed its assessment of current market conditions. It did not specify a total supply volume, transaction-pricing formula or the participating banks in the short announcement.
For the wider foreign-exchange market, the RBI said its new measures aim to strengthen market discipline and risk management while maintaining orderly trading. The changes concern how rupee-involving contracts are renewed, documented and supported by dealer cash.
Lower thresholds and restrictions on rebooking
link a financial contract’s value to a or . uses such a contract to reduce exposure to a price movement, for example on a future foreign- payment. The RBI’s documentation changes focus on whether a contracted exists and whether the same exposure is already covered elsewhere.
Under Circular No. 25, cannot permit rebooking of a rupee-involving cancelled with any after issuance of the directions. The ban covers deliverable and . Renewals when contracts reach remain permitted, subject to existing rules.
The threshold for without establishing the drops from US$100 million equivalent to US$5 million equivalent of outstanding across all . A corresponding threshold for rupee-involving exchange-traded falls by the same amounts, combining all rupee pairs and recognised stock exchanges.
is the contract’s reference amount. The thresholds concern outstanding positions and how they are aggregated, rather than providing a separate allowance at every dealer or exchange.
Dealers must obtain and retain an undertaking that the same exposure has not been with another dealer. Where a business separate parts through different dealers, it must disclose the amounts already booked elsewhere. The undertaking may be part of the deal confirmation. Dealers must verify compliance, including , and retain necessary documents for at least two years. Circular No. 25 took immediate effect.
A cash reserve for specified
Circular No. 26 introduces a , or , for rupee-involving exceeding US$2 million equivalent in . It applies where the contract a and the user buys foreign against rupees. include payments connected with trade and services; the reserve does not automatically cover every contract.
For each covered contract, an must deposit cash at the RBI equal to 20% of the rupee-equivalent . The reserve is maintained daily until the contract terminates and applies to contracts undertaken after issuance of the directions.
The obligation belongs to the dealer. The circular does not describe it as a 20% fee charged to the customer. It requires cash to be held at the central bank during the contract, distinct from the amount a customer pays for foreign .
Attempts to avoid through multiple transactions with one or several dealers violate the directions. Dealers must submit daily reserve details through the RBI’s , . These requirements precede the oil-company dollar window’s scheduled October 12 start.
