RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400001

May 15, 1999

A.D.(M.A. Series) Circular No. 16

To,

All Authorised Dealers in Foreign Exchange

Dear Sirs,

Amendments to the Exchange Control Manual (ECM)

It has been decided to amend/modify the existing exchange control regulations as stated in the following paragraphs:

Statements in form MAP and SIR

1. In terms of paragraph 5B.1(iii) and 5B.9(iii) of ECM, the Head/Principal Office of each authorised dealer is required to submit a monthly statement of maturities (in form MAP) by the 10th of the following month and a quarterly statement regarding interest rate sensitivity in form SIR by 10th of the month following the quarter to which it relates, in the proformae enclosed to A.D. (M.A. Series) Circular No.52 dated 27th December 1997. On a review, it has been decided to modify the formats of these statements to enable authorised dealers to correctly arrive at the Residual Gap. The modified formats of statements MAP & SIR are enclosed. The statement in form MAP for the month of June 1999 and statement in form SIR for the quarter ended June 1999 as also subsequent monthly/quarterly statements may be submitted in the revised formats.

2. It has further been decided that while authorised dealers should invariably submit MAP and SIR statements in respect of four major currencies, namely, US Dollar, Pound Sterling, Euro and Japanese Yen, statements in respect of other foreign currencies may be submitted provided the transactions in the currency concerned exceed 5 per cent of their total foreign exchange turnover.

3. While forwarding the monthly statements in form MAP, authorised dealers may note to furnish the following particulars

Aggregate Gap Limit (AGL) approved by the Management (in USD million)

Maximum AGL during the month (in USD million)

Value at Risk (VaR) limit approved by the Management (in USD million)

Maximum VaR figure during the month (in USD million)

4.The following consequential amendments may be carried out in the ECM.

Volume I

The existing sub-paragraph 5B.1(iii) may be replaced by Slip 1.

The existing sub-paragraph 5B.9(iii) may be replaced by Slip 2.

Volume II

Existing form MAP may be replaced by revised form as per Slip 3.

Existing form SIR may be replaced by revised form as per Slip 4.

5. The directions contained in this circular have been issued under Section 73(3) of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.

Yours faithfully,
B. MAHESHWARAN
Chief General Manager

Slip 1
[AD/MA 16/1999]
5B.1
(iii) Authorised dealers should monitor maturity mismatches by fixing suitable gap limits for each currency. The aggregate of such limits fixed by the banks is required to be approved by Reserve Bank. The Head/Principal office of each authorised dealer should invariably forward to the Chief General Manager, Exchange Control Department (Forex Markets Division), Reserve Bank of India, Central Office, Mumbai - 400 001 a monthly statement of maturities in form MAP in respect of four major currencies namely US Dollar, Pound Sterling, Euro and Japanese Yen, by the 10th of the following month. In respect of other foreign currencies the statement should be submitted where the transactions in the currency concerned exceed 5 per cent of the total foreign exchange turnover. While forwarding these statements authorised dealers should also furnish the following particulars:

Aggregate Gap Limit (AGL) approved by the Management (in USD million)

Maximum AGL during the month (in USD million).

Value at Risk (VaR) limit approved by the Management (in USD million).

Maximum VaR figure during the month (in USD million).