Page 60 - Banking Finance August 2024

RBI CIRCULAR

tifier to identify the fund transfer as a cash- working capital facilities exceeding Rs.250 crore, the
based remittance. CRA shall undertake rating surveillance only till the next
renewal of such facility by the banks.
2. The guidelines on Card-to-Card transfer are excluded
from the purview of the DMT framework and shall be 4. All other provisions regarding external credit ratings
governed under the guidelines / approvals granted for stipulated in the Master Circular ibid remain unchanged.
such instruments.
3. All other instructions in the above circular dated Octo- Release of foreign exchange for Miscella-
ber 5, 2011 including the limits in size of transactions neous Remittances
shall continue to be applicable.
July 03, 2024
4. This circular is issued under Section 18 read with Sec-
tion 10 (2) of the Payment and Settlement Systems Act,
1. In terms of the direction issued under the A.P.(DIR Se-
2007 (Act 51 of 2007), and shall come into effect from
November 01, 2024. ries) Circular No. 16 dated September 12, 2002,
A.P.(DIR Series) Circular No. 55 dated December 23,
2003 and A. P. (DIR Series) Circular No.118 dated May
Basel III Capital Regulations - Eligible
07, 2012, Authorised Dealers are permitted to release
Credit Rating Agencies (ECAI) foreign exchange for any current account transaction,
on the basis of a simple letter containing basic infor-
July 10, 2024
mation and subject to an upper limit of USD 25,000 or
1. Please refer to paragraph 6.1.2 of the Master Circular its equivalent. It was also advised that Authorised Deal-
DOR.CAP.REC.4/21.06.201/2024-25 dated April 1, 2024 ers need not obtain any other documents, including
on Basel III Capital Regulations, wherein the list of Form A2, and that the payment was to be made by
domestic credit rating agencies accredited for the pur- the applicant through Demand Draft or a cheque
pose of risk weighting banks' claims for capital ad- drawn on his / her bank account.
equacy purposes has been prescribed.
2. With a view on streamlining the regulatory compliances
2. A reference is also invited to the Press Release: 2022- and operational procedures, it is now decided that
2023/1033 dated October 12, 2022 in terms of which, Authorised Dealers shall obtain Form A2 in physical or
regulated entities/market participants were advised digital form for all cross-border remittances irrespec-
that in respect of ratings/credit evaluations required tive of the value of transaction. Consequently, the
in terms of any guidelines issued by the Reserve Bank, above-mentioned circulars stand withdrawn with im-
no such fresh ratings/evaluations shall be obtained from mediate effect. Authorised Dealers shall continue to
Brickwork Ratings India Private Limited (the CRA). take necessary steps, in terms of Section 10(5) of For-
3. On a review, banks are hereby permitted to use the eign Exchange Management Act, 1999, to assure them-
ratings of the CRA for risk weighting their claims for selves that such transactions do not involve any con-
capital adequacy purposes, subject to the following: travention of the provisions of FEMA.
a) In respect of fresh rating mandates, rating may be 3. Authorised Dealers may bring the contents of this cir-
obtained from the CRA for bank loans not exceed- cular to the notice of their constituents.
ing Rs.250 crore.
4. The directions contained in this circular have been is-
b) In respect of existing ratings, the CRA may under- sued under sections 10(4) and 11(1) of the Foreign Ex-
take rating surveillance irrespective of the rated change Management Act, 1999 (42 of 1999) and are
amount, till the residual tenure of such loans. without prejudice to permissions/approvals, if any, re-
Provided that in case of existing ratings assigned to quired under any other law.

54 | 2024 | AUGUST | BANKING FINANCE