The Reserve Bank of India has removed the cap of $100 million for booking of forward contracts by authorised dealers in foreign exchange.

"RBI has decided that the eligible limit for this facility would be the average of past three years' export/import turnover or the previous year's turnover, whichever is higher," the central bank said in a notification to ADs on Wednesday.

As per the earlier norms, ADs were permitted to book forward contracts subject to the condition that at any point of time the forward contracts so booked and outstanding should not exceed 25 per cent of the limit worked out on the basis of last three years' average import/export performance, within a cap of $100 million.

RBI said the forward contracts can now be booked and outstanding at any point of time should not exceed 50 per cent (raised from 25 per cent) of the eligible limit without any cap, provided that any amount in excess of 25 per cent would be only on a deliverable basis.

These limits should be computed separately for export/import transactions, the central bank said, adding all other conditions prescribed for this facility remain the same.

Importers/exporters desirous of availing limits higher than the overall cap of 50 per cent would have to apply to RBI through their ADs, it added.