While these products can be used for a variety of purposes, the fundamental requirement is the existence of an underlying exposure to foreign exchange risk whether on current or capital account. While initially the forward contracts could not be rebooked once cancelled, greater flexibility has now been given for booking cancellation and rebooking of forward contracts.
In the case of exporters and importers, they are also allowed to book forward contracts based on past performance and the delivery condition has also been gradually liberalized.