The Consumer Confidence Survey provides an assessment of respondents’ perceptions on general economic conditions and own financial situation during the current period and a year ahead. The survey captures qualitative information on a three point scale i.e., improve, remain same or worsen, from respondents spread across six metropolitan cities viz. Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi. The information so collected is analysed in two parts, viz., current situation as compared with a year ago and the expectations for a year ahead. In the latest Consumer Confidence Survey, field work was carried out between February 23, 2016 and March 06, 2016. (i)The salient findings of the survey, based on the responses of around 5,200 respondents are presented below.

SEBI Guidelines (SEBI) (RBI) (ECS)

Highlights:

I. Current Situation Index (CSI) and Future Expectations Index (FEI) expanded marginally by 1.2 and 2.2 per cent in the current round of survey as compared to December 2015 round. The marginal improvements in the indices were mostly due to increase in the positive (ii) perceptions on economic conditions, income and prices.

Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to A. P. (DIR Series) Circular No.19 dated January 24, 2002, A. P. (DIR Series) Circular No. 63 dated December 21, 2002, A. P. (DIR Series) Circular No. 26 dated November 1, 2004, A. P. (DIR Series) Circular No. 22 dated December 13, 2006 and A. P. (DIR Series) Circular No. 52 dated May 8, 2007, in terms of which persons resident in India have been allowed to enter into forward contracts on the basis of underlying exposures. Further, exporters and importers have also been allowed to book forward contracts on the basis of declaration of exposures and based on past performances, subject to specified conditions.

2. As announced in the Annual Policy Statement for the Year 2007-08 (paras 142 and 143), with a view to provide greater flexibility to the Small and Medium Enterprises (SME) sector and resident individuals, it has been decided to further liberalise the scope and range of forward contracts to facilitate such entities to hedge their foreign currency exposures on a dynamic basis. Accordingly, a draft circular was placed on the website on June 1, 2007 for users' views / comments. Subsequently, discussions were also held with FEDAI and banks. In the light of feedback now received from banks, FEDAI, user group, etc. the guidelines have been suitably modified.

Small and Medium Enterprises (SMEs) (para 142)

3. In order to enable Small and Medium Enterprises (SMEs), having direct and / or indirect exposures to foreign exchange risk to manage their exposures effectively, it has been decided to allow AD Category – I banks to permit such entities to book / cancel / rebook / roll over forward contracts, subject to the following conditions:

(i) Such contracts may be allowed to be booked after ensuring that the entity qualifies as SME as defined by the Rural Planning and Credit Department, Reserve Bank of India vide circular RPCD.PLNS. BC.No.63/06.02.31/2006-07 dated April 4, 2007.

(ii) Such contracts may be booked through AD Category – I banks with whom the SMEs have credit facilities and / or banking relationship and the total forward contracts booked should be in alignment with the credit facilities availed by them for their foreign exchange requirements or their working capital requirements or capital expenditure.

(iii) AD Category – I bank should carry out due diligence regarding "user appropriateness" and "suitability" of the forward contracts to the SME customers as per Para 8.3 of 'Comprehensive Guidelines on Derivatives' issued vide DBOD.No.BP.BC. 86/21.04.157/2006-07 dt.April 20, 2007.

(iv) The SMEs availing this facility should furnish a declaration to the AD Category – I bank regarding the amounts of forward contracts already booked, if any, with other AD Category – I banks under this facility.

4. SMEs are also permitted to use foreign currency rupee options for hedging their exposures.

Resident Individuals (para 143)

5. In order to enable resident individuals to manage / hedge their foreign exchange exposures arising out of actual or anticipated remittances, both inward and outward, it has been decided to permit them to book forward contracts without production of underlying documents up to a limit of USD 100,000, based on self declaration. The contracts booked under this facility would normally be on a deliverable basis. However, in case of mismatches in cash flows or other exigencies, the contracts booked under this facility may be allowed to be cancelled and re-booked. The notional value of the outstanding contracts should not exceed USD 100,000 at any time. Further, the contracts may be permitted to be booked up to tenors of one year only.

6. Such contracts may be booked through AD Category I banks with whom the resident individual has banking relationship, on the basis of an application-cum-declaration in the format given in Annex I. The AD Category – I banks should satisfy themselves that the resident individuals understand the nature of risk inherent in booking of forward contracts and should carry out due diligence regarding "user appropriateness" and "suitability" of the forward contracts to such customer.

7. AD Category – I banks are required to submit a quarterly report to the Chief General Manager, Reserve Bank of India, Foreign Exchange Department, Central Office, Forex Markets Division, Central Office Building, Mumbai - 400 001 within the first week of the following month, as per format given in Annex II.

8. Necessary amendments to Notification No. 25/2000-RB dated 3^rd May 2000 [Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000] are being issued separately.

9. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

10. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.

The Chairman / Managing Director / Chief Executive Officer
Authorised Payment System Operators and Participants (Banks and Non-banks)

Dr. Patra was Executive Director of the Reserve Bank before being elevated to the post of Deputy Governor.

As Deputy Governor, Dr. Patra will look after Monetary Policy Department including Forecasting and Modelling Unit (MPD/MU), Financial Markets Operations Department (FMOD), Financial Markets Regulation Department including Market Intelligence (FMRD/MI), International Department (Intl. D), Department of Economic and Policy Research (DEPR), Department of Statistics & Information Management (including Data and Information Management Unit) (DSIM/DIMU), Corporate Strategy and Budget Department (CSBD) and Financial Stability Unit.

Dr. Patra, a career central banker since 1985, has worked in various positions in Reserve Bank of India. As Executive Director, he was a member of the Monetary Policy Committee (MPC) of Reserve Bank of India, which is entrusted with the responsibility of monetary policy decision making in India. He will continue to be an ex-officio member of the MPC as Deputy Governor.

Prior to this, he was Principal Adviser of the Monetary Policy Department, Reserve Bank of India between July 2012 and October 2014.  He has worked in the International Monetary Fund as Senior Adviser to Executive Director (India) during December 2008 to June 2012, when he actively engaged in the work of the IMF’s Executive Board through the period of the global financial crisis and the ongoing Euro area sovereign debt crisis. His book “The Global Economic Crisis through an Indian looking glass” vividly captures this experience. He has also published papers in the areas of inflation, monetary policy, international trade and finance, including exchange rates and the balance of payments. A Fellow of the Harvard University where he undertook post-doctoral research in the area of financial stability, he has a Ph.D. in Economics from the Indian Institute of Technology, Bombay.