Foreign Exchange Dealers’ Association of India

173, Maker Tower ‘F’, Tel.: 2218 2549 / E-mail:[email protected]

. Cuffe Parade 2218 4432 Website: www.fedai.org.in
Mumbai - 400 005. CIN :U67190MH1988NPL047993

FEDAI RULES (10th EDITION)

EFFECTIVE FROM 01 APRIL 2019
Updated up to 05 April 2024

Note: The inserted text is indicated by amendment in coloured font and deletion is indicated in red font.

General Guidelines/Instructions
1. The member banks are free to determine their own charges for various types of forex
transactions, keeping in view the advice of RBI that such charges are not to be out of line
with the average cost of providing services. Banks should take care to ensure that
customers with low volume of activities are not penalised.
2. Banks should prominently display their card rates for foreign currencies on their website
and / or their B Category branches. Banks should also declare
i. Threshold amounts up to which they are committed to apply card rates.
ii. Frequency and time of publishing the card rate
3. Information regarding various forex related programmes, rates advised for various
purposes from time to time, important circulars issued by FEDAI, FEDAI Rules, Public
Register on commitment to Fx Global Code etc. are available at our website
www.fedai.org.in. E-mail address of FEDAI is [email protected].
4. Our reference to Authorised Dealer is the reference to all Authorised Dealers (Category-I)
banks and other person authorised by RBI under section 10 of Foreign Exchange
Management Act 1999 who are members of FEDAI.
5. All members shall abide by FEDAI Code of Conduct 2017 (As updated from time to time)
and shall submit their „Statement of Commitment‟ in prescribed format. Members shall
confirm in April each year that they have obtained the Statement in Annexure-I to FEDAI
Circular SPL-11.BC /2017 dated 08th November 2017SPL-04/COC/2021 dated 07th
September 2021 from all the concerned employees.
General Rule 5 amended vide AR Circular No. 04/2020 date 2ndNovember 2020
General Rule 5 further amended vide AR Circular No. 01/2022 date 08th February 2022

***
 RULE 1
HOURS OF BUSINESS FOR QUOTING FX RATES

1.1 The normal market hours for on shore deliverable FCY/INR transactions in Inter-
bank forex market as well as client transactions in India would be from 9.00 a.m. to
5.00 p.m. IST on all working days as prescribed by the Reserve Bank of India from
time to time for inter-bank transactions.
Rule 1.1 amended vide AR Circular No. 01.BC/2020 date 23rd January 2020
Rule 1.1 further amended vide AR Circular No. 02/2024 date 05th April 2024

1.2 (A) Authorised dealers may undertake customer (persons resident in India and
persons resident outside India) and inter-bank transactions on all working business
days beyond normal market hours.
(B) Transactions with persons resident outside India, through their foreign branches
and subsidiaries may also be undertaken on all working business days beyond
normal market hours.
I However, value Cash transactions may be undertaken only upto 5.00 pm IST, except in case of
individual person (including joint account or proprietary firm).*deleted w.e.f. 14 February 2022
(DC) Transactions, including value cash transactions, for individual persons
(including joint account or proprietary firm) can be undertaken even on Saturdays,
Sundays and holidays as per banks internal policy.
(ED) Any transaction undertaken beyond the market hours prescribed under Rule
1.1, bank must ensure that:
NOOP Limit is maintained all the times [including transactions executed from EOD
to 9.00 am IST (market opening time) next working business day].

Spot date Roll over for FCY/INR transactions will take place at 12.00 midnight IST.
Rule 1.2 amended vide AR Circular No. 01.BC/2020 date 23rdJanuary 2020
Rule 1.(C)2 amended vide AR Circular No. 01/2022 date 08th February 2022
Rule 1.2 amended vide AR Circular No. 02/2024 date 05th April 2024

1.3 For the purpose of Foreign Exchange business, Saturday will not be treated as a
working business day except for transactions as stated in 1.2 (DC) above.
Rule 1.3 amended vide AR Circular No. 04/2020 date 2nd November 2020

1.4 “Known holiday” is one which is known at least 3 working business days before the
date.
A holiday that is not a “known holiday” is defined as a “suddenly declared
holiday”.
Note: Suppose days 1, 2, 3 and 4 are all working business days.
If day 4 is declared as a holiday on or after day 1, it will be a suddenly declared
holiday.
If day 4 is declared as a holiday prior to day 1, it would be a known holiday.
***
 RULE 2
EXPORT TRANSACTIONS

2.1 Post shipment Credit in Rupees*

a) Application of exchange rate
Foreign Currency bills will be purchased/discounted/negotiated at the Authorised
Dealer‟s current bill buying rate or contracted rate. Interest for the normal transit
period and/or usance period shall be recovered upfront simultaneously.
*Rule 2.1 ‘Heading’ is amended vide AR Circular No. 02/2024 date 05th April 2024

b) Crystallisation and Recovery

i) Authorised Dealers should formulate own policy for crystallisation of foreign
currency liability into rupee liability, in case of non-payment of bills on the
due date.
ii) The policy in this regard should be transparently available to the customers.
iii) For crystallisation into Rupee liability, the Authorised Dealer shall apply its TT
selling rate of exchange. The amount recoverable, thereafter, shall be the
crystallised Rupee amount along with interest and charges, if any.
iv) Interest shall be recovered on the date of crystallisation for the overdue period
at the appropriate rate; and thereafter till the date of recovery of the
crystallised amount.
v) Export bills payable in countries with externalisation issues shall also be
crystallised as per the policy of the authorised dealer, notwithstanding receipt
of advice of payment in local currency.

c) Realisation of Bill after crystallisation

After receipt of advice of realisation, the authorised dealer will apply TT buying
rate or contracted rate (if any) to convert foreign currency proceeds.

d) Dishonour of bills
In case of dishonour of a bill before crystallisation the bank shall recover;
i) Rupee equivalent amount of the bill and foreign currency charges at TT selling
rate.
ii) Appropriate interest and rupee denominated charges.

2.2 Application of Interest

a) Rate of interest applicable to all export transactions shall be as per the guidelines of
 Reserve Bank of India from time to time.
b) Overdue interest shall be recovered from the customer, if payment is not received
within normal transit period in case of demand bills and on/or before notional due
date/actual due date in case of usance bills, as per RBI directive.
c) Early Realisation
In case of early realisation, interest for the unexpired period shall be refunded to the
customer. The bank shall also pay or recover notional swap cost as in the case of
early delivery under a forward contract. Interest on outlay/ inflow of funds for such
SWAPS shall also be recovered/ paid as per Rule 6 para 6.6.

2.3 Normal Transit Period

Concepts of normal transit period and notional due date are linked to interest rate on
export bills and to arrive at due date of the bill/export credit.
Normal transit period comprises of the average period normally involved from the date
of negotiation/purchase/discount till the receipt of bill proceeds.
It is not to be confused with the time taken for the arrival of the goods at the destination.
Normal transit period for different categories of export business are laid down as below.

a) Fixed Due Date

In the case of export usance bills, where due dates are fixed or are reckoned from
date of shipment or date of bill of exchange etc., the actual due date is known.
Therefore, in such cases, normal transit period is not applicable.

b) Bill drawn on DP/At Sight Basis and not under Letter of Credit (LC)
(i) Bill in Foreign Currencies – 25 days
(ii) Bills in Rupees not under Letter of Credit– 20 days

AD Bank may apply transit period that varies (Higher or lower) from above prescribed
NTP for exceptional situations based on historic data for specific exporter/overseas
buyer/supply destination and mode of transportation etc. Any deviation from above
prescribed NTP should be documented with rationale for such deviation.
In case of extending finance beyond above prescribed NTP, maximum period is
restricted up to 90 days from the date of shipment.
AD Bank should be responsible to demonstrate the document relying upon which the
facility of post-shipment export finance provided for extended/reduced NTP period. No
changes in due date shall be permitted subsequent to the purchase, discounting or
negotiation of export bill.
c) Exports to county under United Nations Guidelines – Max. 120 days

d) Bills drawn in Rupees under Letters of Credit(L/C)

i) Reimbursement provided at centre of negotiation - 3 days

ii) Reimbursement provided in India at centre - 7 days
different from centre of negotiation
iii) Reimbursement provided by banks outside - 20 days
India
iv) Exports to Russia where reimbursement - 20 days
is provided by RBI under state credit*
*Rule 2.3(d)(iv) amended vide AR Circular No. 02/2024 date 05t April 2024

e) TT reimbursement under Letters of Credit (L/C)

i) Where L/C provides for reimbursement by - 5 days
electronic means
ii) Where L/C provides reimbursement claim after – 5 days + this additional
certain number of days from the date of negotiation period

2.4 Substitution/Change in Tenor

a) In case of change in the usance of a bill, interest on post shipment credit shall be
charged to the customer, as per internal guidelines of respective bank. In addition,
the bank shall charge or pay notional swap difference. Interest on outlay/inflow of
funds for such swaps shall also be recovered / paid as per Rule 6 para 6.6.
b) It is optional for banks to accept delivery of bills under a contract made for
purchase of a clean TT. In such cases, the bank shall recover/pay notional swap
difference for the relative cover. Interest on outlay/inflow of funds for such swaps
shall also be recovered/paid as per Rule 6 para 6.6.

2.5 Export Bills sent for collection:

a) Application of exchange rates
The conversion of foreign currency proceeds of export bills sent for collection or of
goods sent on consignment basis shall be done at prevailing TT buying rate or the
Fx contract rate, as the case may be. The conversion to Rupee equivalent shall be
made only after the foreign currency amount is credited to the Nostro account of
the bank.
b) On receipt of credit advice/statement of Nostro account and compliances of
guidelines, requirements of the Bank and FEMA, the Bank shall transfer funds for
the credit of exporter‟s account within two working business days.
c) If the above stipulated time limit is not observed, the Bank shall pay compensation
for the delayed period at the minimum interest rate charged on export credit.
Compensation for adverse movement of exchange rate, if any, shall also be paid as
per the compensation policy of the bank.

***
 RULE 3
IMPORT TRANSACTIONS
3.1 Application of exchange rate
a) Retirement of import bills Exchange rate as per hedge contract, if hedge
contract is in place.
Prevailing Bill Selling rate, in case there is no
hedge contract.
b) Crystallisation of Import bill same as above
(vide para 3.3 below)
c) For determination of stamp As per exchange rate provided by the
duty on import bills authority concerned.

3.2 Application of Interest

a) Bills negotiated under import letters of credit shall carry commercial rate of interest
as applicable to banks‟ domestic advances from time to time.
b) Interest remittable on interest bearing bills shall be subject to the directive of
Reserve Bank of India in this regard.

3.3 Crystallisation of Import Bill under Letters of Credit

Unpaid foreign currency import bills drawn under letters of credit shall be
crystallised as per the stated policy of the bank in this respect.

***
 RULE 4
CLEAN INSTRUMENTS

4.1 Outward Remittance

Outward remittance shall be effected at TT selling rate of the bank ruling on that
date or at the Fx contract rate.

4.2 Encashment or Sale of foreign currency notes and instruments

Foreign currency travelers‟ cheques, currency notes, foreign currency in prepaid
card, debit/credit card will be encashed or sold at Authorised Dealer‟s option at
the appropriate buying or selling rate respectively ruling on the date and time of
encashment or sale.
Rule 4.2 amended vide AR Circular No. 04/2020 date 2nd November 2020

4.3 Payment of foreign inward remittance

Foreign currency remittance up to certain amount, as per uniform policy of
respective bank, may be converted immediately, for their own customer in to
Indian Rupee if all information required for crediting the remittance to beneficiary
account is available and there is no instruction to the contrary. Remittance in
excess to such certain amount shall be executed in foreign currency or can be
converted to other currency/(ies) with due intimation to or consent from, the
beneficiary.

4.4 The applicable exchange rate for conversion of the foreign currency inward
remittance shall be TT buying rate or the contracted rate as the case may be.

4.5 Compensation for delayed payment

Authorised Dealers shall pay or send intimation, as the case may be, to the
beneficiary in two working business days from the date of receipt of credit advice
/Nostro statement. On receipt of disposal instruction complying with guidelines,
required documents from the beneficiary the Bank shall transfer funds for the
credit of beneficiary‟s account immediately but not exceeding two working
business days from date of such receipt.

In case of delay, the bank shall pay the beneficiary interest @ 2% over its savings
bank interest rate. The bank shall also pay compensation for adverse movement of
exchange rate, if any, as per its compensation policy specifying the reference rate
and date applicable for calculating such exchange loss.
 In case, the beneficiary does not respond within five working business days from
receipt of credit intimation as above and the bank does not return the remittance
to the remitting bank, the bank shall initiate action to crystallise the remittance;
a. Bank notify due action to the remitting bank and the beneficiary
b. Bank shall crystallise the remittance within certain period as per their policy,
not exceeding the time allowed for surrendering of foreign currency under any
Stature or Regulation or RBI Directions.
Rule 4.5 amended vide AR Circular No. 04/2020 date 2nd November 2020
Rule 2.3(d)(iv) amended vide AR Circular No. 02/2024 date 05th April 2024

4.6 Transfer of funds between Vostro Accounts with two banks (w.e.f. 1st April 2013)
i. The bank carrying out interbank Vostro transfer by RTGS domestic wire transfer
should mention in the “Remark” column of the RTGS domestic wire transfer
message, a statement to the following effect – “We undertake to send form A3
separately”.
Rule 4.6(i) amended vide AR Circular No. 02/2024 date 05th April 2024
ii. It is decided to fix time limit of 5 working business days for receipt of form A3 at
beneficiary bank‟s end. Delay beyond 5 days would attract penalty on the
remitting bank.
iii. In case, beneficiary bank does not get form A3 within 5 working business days,
they must lodge a claim with the remitting bank within 15 days, from the date of
transfer of funds. Remitting bank should ensure that Form A3 reaches the
beneficiary bank promptly thereafter.
iv. Remitting bank would be required to pay beneficiary bank penalty at the rate of
Rs. 1000/- per day for the period in excess of 5 days from the date of transfer of
funds, till the form A3 reaches the beneficiary bank.
v. If beneficiary bank lodges the claim after 15 days from the date of transfer of
funds, the claim amount will be capped at Rs. 10,000/-
vi. In case of any dispute between the banks, the matter may be referred to FEDAI.
FEDAI will appoint a sub-committee of 3 members from the Managing Committee
and give directions to the parties concerned.

***
 RULE 5
FOREIGN EXCHANGE CONTRACTS

5.1 Contract amounts

Exchange contracts shall be for definite amounts and periods. When a bill contract
mentions more than one rate for bills of different deliveries, the contract must state
the amount and delivery against each such rate.

5.2 Option period of delivery

Unless the date of delivery is fixed and indicated in the contract, option period may
be specified at the discretion of the customer subject to the condition that such
option period of delivery shall not extend beyond one month.
If the fixed date of delivery or the last date of delivery option is a known holiday; the
last date for delivery shall be the preceding working business day.
In case of suddenly declared holidays, the contract shall be deliverable on the next
working business day. Contracts permitting option of delivery must state the first &
last dates of delivery.

For Example: 18th Jan to 17th Feb, 31st Jan to 29th Feb 2016.
“Ready” or “Cash” merchant contract is deliverable on the same day.
“Value next day” contract shall be deliverable on the working business day
immediately succeeding the contract date.
A spot contract shall be deliverable on second succeeding working business day
following the contract date.
A forward contract is a contract deliverable at a future date, beyond Spot Date.
Duration of the contract being computed from spot value date at the time of
transaction.

5.3 Place of delivery

All contracts shall be understood to read “to be delivered or paid for at the Bank”
and “at the named place”.

5.4 Date of delivery

Date of delivery under forward contracts shall be;
i. In case of bills/documents negotiated, purchased or discounted – the date of
negotiation/purchase/ discount and payment of Rupees to the customer.
 However, in case the documents are submitted earlier to, or later than the
original delivery date, or for a different usance, the bank may treat it as proper
delivery, provided there is no change in the expected date of realisation of
foreign currency calculated at the time of booking of the contract. No early
realisation or late delivery charges shall be recovered in such cases.
ii. In case of export bills/documents sent for collection date of payment of Rupees
to the customer on realisation of the bills.
iii. In case of retirement/crystallisation of import bills/documents – the date of
retirement/crystallisation of liability, whichever is earlier.

5.5 Option of delivery

In all forward merchant contracts, except NDDC, the merchant, whether a buyer
or a seller, will have the option of delivery.
Rule 5.5 amended vide AR Circular No. 04/2020 date 2nd November 2020

5.6 Option of usance

The merchant purchase contract should state the tenor of the bills/documents.
Acceptance of delivery of bills/documents drawn for a different tenor will be at
the discretion of the bank.

5.7 Merchant quotations

The exchange rate shall be quoted in direct terms i.e. so many Rupees and Paise
for 1 unit or 100 units of foreign currency.

5.8 Rounding off Rupee equivalent of the foreign currency

Settlement of all merchant transactions may be effected by rounding off rupee
amount or in actual paise, as per the banks own policy.

***
 RULE 6
EARLY DELIVERY, EXTENSION AND CANCELLATION OF FOREIGN EXCHANGE CONTRACTS

6.1 General
i. At the request of a customer, unless stated to the contrary in the provisions of
FEMA, 1999, it is optional for a bank to:
a) Accept or give early delivery, or
b) Extend the contract.
ii. It is the responsibility of a customer to effect delivery or request the bank for
extension/cancellation as the case may be, on or before the maturity date of
the contract.

6.2 Early delivery

If a bank accepts or gives early delivery, the bank shall recover/pay swap
difference, if any. Interest on outlay/inflow of funds for such swaps shall also be
recovered / paid as per Rule 6 para 6.6.

6.3 Extension
Foreign exchange contracts where extension is sought by the customers shall be
cancelled (at an appropriate selling or buying rate as on the date of cancellation)
and rebooked simultaneously only at the current rate of exchange. The difference
between the contracted rate, and the rate at which the contract is cancelled, shall
be recovered from/paid to the customer as per Rule No. 6.4. Such request for
extension shall be made on or before the maturity date of the contract.

6.4 Cancellation
i. Recovery/ Payment of Loss /Gain
a) In case of cancellation of a contract at the request of a customer (if the request is
made on or before the maturity date) the Authorised Dealer shall recover/ pay,
as the case may be, the difference between the contracted rate and the rate at
which the cancellation is effected.
b) The process of recovery of exchange difference on cancellation of forward
contracts on or before the maturity date will be as follows:
 The recovery can be either in lump sum or in installments.
 Repayment period should not extend beyond the maturity date of the
contract.
 The repayment installments should be uniformly received over the
remaining maturity of the contract and its periodicity should be at least
once in a quarter
 c) The banks should have Board approved policy to deal with recovery and
payment of exchange difference and other charges on above lines. The details
should be made available to the customers transparently on upfront basis.

ii. Rate at which cancellation is to be effected

a) Purchase contracts shall be cancelled at TT selling rate of the contracting
Authorised Dealer
b) Sale contracts shall be cancelled at TT buying rate of the contracting Authorised
Dealer
c) Where the contract is cancelled before maturity, the appropriate forward TT rate
shall be applied.

iii. Notwithstanding the fact that the exchange contract between the customer and the
bank becomes impossible for performance, for whatever reason, including
Government prohibitory orders, the exchange contract shall not be deemed to have
become void and the customer shall forthwith apply to the Authorised Dealer for
cancellation, as per the provisions of paragraph 6.4(i) and (ii) above.

iv. a. In the absence of any instructions from the customer, vide para 6.1(ii), a contract
which has matured shall be cancelled by the bank within the period of not
exceeding three working business day after the maturity date, as per the policy of
the respective bank.

b. Swap cost, if any, shall be recovered from the customer under advice to him.

c. When a For contract is cancelled after the maturity date[refer Para (a) above], the
customer shall not be entitled to the exchange difference, if any, in his favour of the
customer, since the contract is cancelled on account of his default on the part of
customer. He Customer shall, however, be liable to pay the exchange difference,
against him. Banks may pass the exchange gain provided it is satisfied that the
contract became overdue as client could not give cancellation instructions on
account of factors which were beyond the control of the client. Such instances along
with specific justification, shall be kept on record by the Bank.
Rule 6.4(iv) amended vide AR Circular No. 04/2020 date 2nd November 2020

6.5 Swap cost/ gain

i. In all cases of early delivery of a contract, swap cost shall be recovered from the
customer, irrespective of whether an actual swap is made or not. Such
recoveries should be made either back-ended or upfront at discretion of the
 bank.
ii. Payment of swap gain to a customer may be made at the beginning or at the
end of swap period as per the bank‟s own policy in this regard.

6.6 Outlay and Inflow of funds

Authorised Dealer shall recover interest on outlay of funds for the purpose of
arranging the swap, in addition to the swap cost in case of early delivery of a contract.

If such a swap leads to inflow of funds, interest shall be paid to the customer. Funds
outlay/ inflow shall be arrived at by taking the difference between the original contract
rate and the rate at which the swap could be arranged.
The rate of interest to be recovered/ paid and the threshold limit for the same may be
determined by banks as per their policy in this regard.

In case of early delivery of „Optional Delivery Date Forward Contract‟ interest on

inlay/outlay of funds should be calculated up to the date for which the Swap is done,
on account of early delivery.

***
 RULE – 7
BUSINESS THROUGH INTERMEDIARIES
7.1 Intermediaries
Exchange brokers, Multi Bank Portals (MBP), Electronic Order Matching Systems
(EOMS) are some of the commonly used intermediaries in foreign exchange
markets. While such intermediaries were earlier accredited by FEDAI, from 05
October 2018, FEDAI will continue to be the accrediting agency for Exchange
Brokers (Voice) only. Electronic Trading Platforms viz. MBPs and EOMs will
require to obtain authorisation from RBI. ETPs existing and operating on or before
the commencement of these directions shall make an application for authorisation
within a period of six months from the date of issue of these directions. An
existing ETP Operator may continue to carry on the operations till disposal of its
application by the Reserve Bank granting or rejecting the letter of authorization.
Authorised Dealers shall use the services of intermediaries accredited by
FEDAI/RBI. No brokerage, fees, charges or any other form of remuneration shall
be paid by the Authorised Dealers to other bank employees on any foreign
exchange contracts.
Rule 7.1 amended vide AR Circular No. 04/2020 date 2nd November 2020

7.2 Accredited intermediaries will conform to the rules, conditions and the code of
conduct laid down by FEDAI from time to time. FEDAI may review the working
and standing of accredited intermediaries from time to time. Any accredited
intermediary who conducts any business contrary to the rules of FEDAI may have
his accreditation withdrawn and no Authorised Dealer shall transact any business
with him thereafter.

7.3 It shall be the duty of each Authorised Dealer and the associations of Exchange
Brokers (Voice) to report to FEDAI, the name of an intermediary who suggests,
proposes or transacts any business which is contrary to the rules of FEDAI.

7.4 Reporting Changes

Any changes in regard to the constitution or address or any other material change
in respect of an Exchange Brokers (Voice) shall be advised to FEDAI promptly for
necessary approval. Exchange Brokers (Voice) shall also report changes in the
calling assistants, key employees, Managers to FEDAI.

7.5 Contracts Notes/Confirmations

All contracts/confirmations/advices in relation to foreign exchange business must
bear the clause “Subject to the Rules & Regulations of the Foreign Exchange
Dealers‟ Association of India.”

No foreign exchange contract shall be made with an intermediary as a principal. A bank

must refuse to give delivery to or take delivery from any party other than the declared
principal – an authorised dealer.
***
 RULE – 8
INTERBANK SETTLEMENT

8.1 Issues of delays in payments of funds in any currency (including Indian

Rupee) in settlement of foreign exchange contracts are dealt in this rule.
Considering the technological advances in processes of payments and
reconciliation of accounts, it has become far more speedier to detect non-
delivery of funds. Banks are expected to track delivery of funds, note
discrepancies if any, and take corrective actions expeditiously and efficiently.

8.2 Interest for delayed delivery

In the event of late delivery of any currency (including Indian Rupee) in
foreign exchange contract, interest for the number of days of delay (regardless
of the causes for delay) shall be payable by the seller-bank. The interest for the
overdue period shall be payable at the rate of 2% over the benchmark rate of
the currency concerned. The benchmark rates will be Alternative Reference
Overnight Rate for respective currency for the currencies are listed below:-
1. INR - FBIL MIBOR overnight rate
2. STG - SORA (SGD) announced by Singapore Monitory
Authority Base rate of Barclays Bank
- SOFR (USD) announced by Federal Reserve Bank of
3. USD
New YorkPrime Base# rate of Citibank NA
- ESTR (EUR) announced by European Central Bank
4. EUR Marginal Lending Facility rate of European Central
Bank
5. JPY - TONA (JPY) announced by Bank of Japan Prime rate
of Bank of Tokyo-Mitsubishi UFJ Ltd.
6. CHF - SARON (CHF) announced by SIX Swiss Exchange 3
month rate of Swiss National Bank
7. CAD - CORRA (CAD) announced by Bank of Canada Prime
rate of Bank of Nova Scotia
#Rule 8.2(3) amended vide AR Circular No. 04/2020 date 2nd November 2020 and was further amended/deleted on 05th April 2024
In case of transactions in currencies not mentioned above, the seller bank shall
pay interest at 2% over notional overdraft rate payable by the buyer bank.
The rate of interest applied would be the average rate based on rates on each
day of delay.
Rule 8.2 amended vide AR Circular No. 02/2024 date 05th April 2024
8.3 Acceptance of back valued credit.
In case, the seller bank is willing to rectify the situation of late payment, by
offering to deliver funds on value dated basis, the buyer bank shall accept
such funds, provided the funds are delivered within two working business
days from the due date of the contract. In case, funds are delivered beyond
two working business days from the due date, it will be the choice of the
 buyer bank to accept-
(a) Value dated funds
or
(b) Claim interest as per para 8.2 above.

8.4 Time Limit for claim for delay

The claim for the delay in receipt of funds by the buyer bank should be made
within 15 working business days from the due date of the contract. The seller
bank in such a case shall be liable to pay interest for the full period of delay.
If the claim is not made within 15 working business days, the interest will be
payable by the selling bank for the maximum period of 60 days only.

8.5 Time Limit for settlement of claim

The selling bank has to settle the claim (with interest for overdue period, as
above) within 15 working business days from the date of receipt of claim.

If a claim is not settled within 15 working business days, the seller bank will
be required to pay interest at the rate mentioned in 8.2 above for the entire
overdue period. The cap of 60 days for interest payment as mentioned in 8.4
above will not apply in such cases.

8.6 Deliberate default

In case the claim is not settled within 60 days from the date of lodgment of
claim, the matter may be referred to FEDAI for final decision, which shall be
binding on both the banks concerned.
The matter would be examined by the Managing Committee of FEDAI or any
other Sub- Committee appointed for this purpose by the Managing
Committee. The said committee of FEDAI will decide about penalty on the
defaulting bank.

8.7 Wrong delivery of funds

In case, a seller bank delivers funds to the account other than the notified
account of the buyer bank, it shall compensate the buyer in terms of the above
rules.

8.8 Use of incorrectly paid funds (undue enrichment)

A bank which has received funds, not intended for its accounts, shall be liable
to compensate the bank which has been out of funds by either:
1. returning the funds with proper value, provided charges for back valuation
are borne by the original remitting bank, or
2. returning the funds with interest that is earned, less charges, if any.
8.09 Settlement Date Change
a) When Maturity Date of a Fx contract falls on a month end and the said day
is declared as a holiday subsequently, the settlement should be preponed to
preceding working business day, if the said day is “known holiday”.
b) In all other cases, if the maturity date is declared as a holiday subsequently,
the settlement date should be postponed to the next working business day.

8.10 Notice for Option Delivery

In case of interbank forward contract, that allows option of delivery, the buyer
bank shall take up such forward contract after giving a notice of 2 working
business days to the seller bank.

8.11 All the member banks who deal in Forex Forward should become & retain
membership of CCIL‟s Forex Forward Guaranteed Settlement segment. All
interbank Forex Forward contracts should be subjected to the CCIL‟s Forex
Forward Settlement segment.
Rule 8.11 amended vide AR Circular No. 04/2020 date 2nd November 2020

8.12 Change in expiry date of Option contracts

a) When expiry date of an option contract falls on a “known holiday”, expiry
date is pre-poned to the previous working business day.
b) If an option expiry date falls on a “suddenly declared holiday”, the expiry
date should be post-poned to the next working business day.

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List of AR Circulars issued subsequent to Adoption of FEDAI Rules w.e.f. 01 April 2019:
1.
rd
Rule 1.1 amended vide AR Circular No. 01.BC/2020 date 23 January 2020
2.
nd
AR Circular No. 04/2020 date 2 November 2020
3.
th
General Rule 5 further amended vide AR Circular No. 01/2022 date 08 February 2022
4.
th
AR Circular No. 02/2024 date 05 April 2024