The Reserve Bank today said it is mulling to cut down the documentation process to make it easier for importers and exporters to hedge.
"With a view to easing the process of hedging, it is proposed to introduce a more liberalised framework for importers and exporters by reducing the documentary requirements for hedging trade transactions under the contracted exposure route," RBI said on its website.
Under the present framework, the Foreign Exchange Management Act requires clients to submit documentary evidence of underlying foreign currency exposure to authorised Dealer category-I banks at the time of booking of derivative contracts.
The central bank has come out with a consultative paper with the draft operational guidelines on the subject and invited public comments from banks, businesses having forex exposures, market participants and interested persons on the norms by April 29.
The comments can be sent either via e-mail or by post to the Chief General Manager, Reserve Bank of India, Financial Markets Regulation Department, it said.
