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Forward contract cancellation
Dear All,
I would like to know if company is enter in to forward contract with bank to hedge its future forex flow but somhow if it is not possible for company for settled that contract amount due to non realisation of fund. can forward Contract cancelled after agreed period?
if yes wat conquences has been faced by company?
for Ex. company enter in contract for Dec for 1 Lac usd, if company can not realise up to the mark, than what will be the treatment of such contract for the remaining balance?
is it possible for the company to cancel the whole contract?
Pls advice.
Regards
Replies (4)
YES IT IS POSSIBLE TO CANCEL THE CONTRACT. BANK WILL SETTLE THE CONTRACT ON THE SPORT RATE OF THAT DATE AND THE DIFFERENCE AMOUNT WILL BE PAID / RECEIVED
Thanks Ashish,
further to that, does it consider as speculative transaction?
what is RBI guideline on this?
Regards,
agree with Ashish ,
no it is not a speculative forward contract is a part of business
yes its not speculative
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