Liberalising the forward contracts norms, Reserve Bank of India has decided to allow companies to book forward contracts in excess of $100 million based on past performance for hedging purposes on deliverable basis.

This has been done to enable large corporates with proven track record to effectively and actively manage their risks arising out of genuine exposures relating to export/import transactions and in response to representations received by the apex bank, RBI said in a media release on Tuesday.

Presently, resident entities were allowed to book forward contracts up to extend of average of past three years export/import turnover without production of documents subject to the condition that outstanding contracts should not exceed 25 per cent of eligible limit and a cap of $100 million, it said.

The applications by companies should contain details of past three years turnover, delayed realisations/payments and limits fixed for booking forward contracts based on past performance.