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November 2015

A. P. (DIR Series) Circular No. 21 dated 8th October, 2015

By Gaurang Gandhi Chartered Accountant
Reading Time 2 mins
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Memorandum of Procedure for channeling transactions through Asian Clearing Union (ACU)

This circular permits the use of the Nostro accounts of commercial banks of the ACU member countries, i.e., the ACU Dollar and ACU Euro accounts, for settling the payments of both exports and imports of goods and services among the ACU countries and reiterates that all eligible export/import transactions with other ACU member countries (except in the case of certain countries where specific exemptions have been provided by the Reserve Bank of India) must invariably be settled through the ACU mechanism.

As a consequence, payments for all eligible: –

a) Export transactions must be made by debit to the ACU Dollar/ACU Euro account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the ACU Dollar/ACU Euro account of the authorised dealer maintained with the correspondent bank in the other member country.
b) Import transactions must be made by credit to the ACU Dollar/ACU Euro account in India of a bank of the member country in which the other party to the transaction is resident or by debit to the ACU Dollar /ACU Euro account of an authorised dealer with the correspondent bank in the other member country.

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