Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: TDS :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: empanelment :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: Central Excise rule to resale the machines to a new company :: VAT Audit :: list of goods taxed at 4% :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD
Latest Circulars »
 RBI-Framework for imposing monetary penalty on Authorised Payment Systems Operators / banks under Payment and Settlement Systems Act, 2007
 RBI-Sovereign Gold Bonds 2016-17 Series III – Operational Guidelines
  Registrations open for NCFE’s NFLAT (National Financial Literacy Assessment Test)
 Sovereign Gold Bond Scheme 2016 -17 – Series III
 Minutes of the Monetary Policy Committee Meeting October 3-4, 2016
 Registrations open for NCFE’s NFLAT (National Financial Literacy Assessment Test)
 Auction for Sale (Re-issue) of 7.35 per cent Government Stock 2024
 Auction of Government of India Dated Securities October 17, 2016
  Setting The Priorities Right (Shri S. S. Mundra, Deputy Governor – September 28, 2016 – at the 3rd SBI Banking and Economics Conclave in Mumbai)
  Financial Stability in a Weak Global Environment (Shri S. S. Mundra, Deputy Governor - September 22, 2016 - at the 7th SEACEN High Level Seminar for Deputy Governors in–charge of Financial Stability and Supervision, Mumbai)
 RBI issues Directions to United India Co-operative Bank Ltd., Nagina, Bijnor, Uttar Pradesh – Withdrawal of Directions

Prudential Norms for Off-balance Sheet Exposures of Banks Deferment of Option Premium
June, 19th 2013


June 18, 2013

The Chairman and Managing Directors/ Chief Executive Officers of
All Scheduled Commercial Banks (excluding RRBs and LABs) &
All India Term-Lending & Refinancing Institutions

Madam / Sir,

Prudential Norms for Off-balance Sheet Exposures of Banks – Deferment of Option Premium

Banks are permitted to defer, at their discretion, the premium on plain vanilla options sold by them to users subject to certain conditions with effect from January 25, 20121. It has now been decided to extend this facility to cost reduction forex option structures in which the liability of the users never exceeds the net premium payable to the bank under any scenario. This facility would be subject to the following conditions:

  1. Banks should carry out necessary due diligence with regard to the ability of users to adhere to the premium payment schedule, in accordance with their Board approved policy in this regard, before extending this facility to the users.

  2. Payment of premium for option structure with maturity of more than 1-year may be deferred, provided the premium payment period does not extend beyond the maturity date of the contract.

  3. The premium should be received uniformly over the maturity of the contract and the periodicity of such payment should be at least once in a quarter.

  4. This facility should not be allowed for the contracts which are on past performance basis.

2. Such option structures would continue to be governed by instructions (as amended from time to time) on

  • Suitability and appropriateness as regards structured derivative products laid down in ‘Comprehensive Guidelines on Derivatives: Modifications’ dated November 2, 2011 issued by Department of Banking Operations and Development, RBI; and

  • Cost Reduction Structures as laid down in Master Circular on ‘Risk Management and Inter-Bank Dealings’ dated July 2, 2012 issued by Foreign Exchange Department, RBI.

Yours faithfully,

(Chandan Sinha)
Principal Chief General Manager

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions