Foreign Exchange Management Act (FEMA), 1999 – Current Account Transactions – Liberalisation - FEMA - 014

Foreign Exchange Management Act (FEMA), 1999 - Current Account Transactions - Liberalisation RBI/2006-07/190 A.P. (DIR Series) Circular No. 14 November 28, 2006 To All Category - I Authorised Dealer Banks Madam/Sir, Foreign Exchange Management Act (FEMA), 1999 - Current Account Transactions - Liberalisation Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Foreign Exchange Management (Current Account Transactions) Rules, 2000 notified vide Notification No. G.S.R.381(E) dated 3rd May 2000, as amended from time to time. 2. In terms of Rule 5 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, prior approval of the Reserve Bank is required for drawing foreign exchange 'for remittance for purchase of trademark or franchise in India' [item 16 of Schedule III to the Foreign Exchange Management (Current Account Transactions) Rules, 2000]. With a view to liberalising the procedure further and providing greater flexibility, in the Foreign Exchange Management (Current Account Transaction) Rules, 2000, in Schedule III, item number 16 and the entry relating thereto has been omitted. Henceforth, AD Category-I banks may permit drawal of foreign exchange by person for purchase of trademark or franchise in India without approval of the Reserve Bank. 3. The amendment to the Foreign Exchange Management (Current Account Transactions) Rules, 2000, in this regard has been issued vide Notification G.S.R. 412(E) dated July 10, 2006 by the Government of India. (copy enclosed). 4. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 5. The directions contained in this Circular have been issued under Section 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Salim Gangadharan)Chief General Manager-in-Charge REGD NO.D..L-33004/99