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TMI BlogMaster Circular on Miscellaneous Remittances from India - Facilities for ResidentsX X X X Extracts X X X X X X X X Extracts X X X X ..... orised Dealer banks are to be guided by the Rules made by the Government of India under Section 5 of the Foreign Exchange Management Act, 1999 (as indicated in item 1 of Appendix 2)which are detailed in the Foreign Exchange Management (Current Account Transactions) Rules, 2000 (Annex-1) notified by the Government of India vide Notification No. G.S.R.381 (E) dated 3rd May 2000 (Rules). In terms of the said Rules, drawal of foreign exchange for certain categories of transactions as listed in Schedule I is expressly prohibited. Exchange facilities for transactions included in Schedule II to the Rules may be permitted by the Authorised Dealer banks provided the applicant has secured the approval from the Ministry/Department of the Government of India as specified therein. In respect of transactions included in Schedule III, prior approval of the Reserve Bank would be required for remittance exceeding the specified limits. The release of foreign exchange up to the threshold ceilings specified in Schedule III stands delegated to the Authorised Dealer banks. All applications for release of foreign exchange exceeding the limits as prescribed in Schedule III to the Rules should be ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial year. 2.2 In case of issue of travellers cheques, the traveller should sign the cheques in the presence of an authorised official and the purchaser's acknowledgement for receipt of the travellers cheques should be held on record. 2.3 Out of the overall foreign exchange being sold to a traveller, exchange in the form of foreign currency notes and coins may be sold up to the limit indicated below: (i) Travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States - not exceeding USD 3000 or its equivalent. (ii) Travellers proceeding to Iraq or Libya - not exceeding USD 5000 or its equivalent (iii) Travellers proceeding to Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States - full exchange may be released. 2.4 The form A2 relating to sale of foreign exchange should be retained for a period of one year by the Authorised Persons, together with the related documents, for the purpose of verification by their Internal Auditors. However, in respect of remittance applications for miscellaneous non-trade current account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er eligible purpose for which drawal of foreign exchange is permitted under the relevant Rules / Regulation. 7.2 General permission is available to any resident individual to surrender received / realised / unspent / unused foreign exchange to an Authorised Person within a period of 180 days from the date of receipt / realisation / purchase / acquisition / date of return of the traveller, as the case may be. 7.3 The liberalized uniform time limit of 180 days is applicable only to resident individuals and that too in areas other than export of goods and services. 7.4 In all other cases, the regulations / directions on surrender requirement shall remain unchanged. (cf. Notification No. FEMA 9/2000-RB dated May 3, 2000, as amended from time to time). A.8 Unspent Foreign Exchange 8.1 As stated above, unspent foreign exchange brought back to India by a resident individual should be surrendered to an Authorised Person within 180 days from the date of return of the traveller. Exchange so brought back can be utilized by the individual for his/her subsequent visit abroad. 8.2 However, a returning traveller is permitted to retain with him, foreign currency travellers cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is being made out of the foreign exchange purchased by the traveller concerned from an Authorised Person (including exchange drawn for private travel abroad), in accordance with the Rules, Regulations and Directions in force. 9.2 Authorised Dealers may effect remittances at the request of agents in India who have tie-up arrangements with hotels / agents, etc., abroad for providing hotel accommodation or making other tour arrangements for travel from India, provided the Authorised Dealer is satisfied that the remittance is being made out of the foreign exchange purchased by the traveller concerned from an Authorised Person (including exchange drawn for private travel abroad) in accordance with the Rules, Regulations and Directions in force. 9.3 Authorised Dealer may open foreign currency accounts in the name of agents in India who have tie up arrangements with hotels / agents, etc., abroad for providing hotel accommodation or making other tour arrangements for travellers from India provided:- a) the credits to the account are by way of depositing i) collections made in foreign exchange from travellers; and ii) refunds received from outside India on account of canc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebit/prepaid card holder is one and the same person. Note: Where the rupee equivalent of foreign exchange drawn exceeds Rs 50,000 either for any single drawal or more than one drawal reckoned together for a single journey/visit, it should be paid by cheque or draft. A.11 Advance Remittance - Import of services Authorised Dealers (Category-I banks) may allow advance remittance for import of services. However, where the amount exceeds USD 500,000 or its equivalent, a guarantee from a bank of International repute situated outside India or a guarantee from an Authorised Dealer in India, if such a guarantee is issued against the counter-guarantee of a bank of International repute situated outside India, should be obtained from the overseas beneficiary. The Authorised Dealer should also follow up to ensure that the beneficiary of the advance remittance has fulfilled his obligations under the contract or agreement with the remitter in India. In the case of a Public Sector Company or a Department /Undertaking of the Government of India /State Governments, approval from the Ministry of Finance, Government of India for advance remittance for import of services without bank g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval of the Reserve Bank. 13.6 The limit of USD 200,000 under the Scheme also include remittances towards gift and donation by a resident individual. 13.7 Remittances under the Scheme can be used for purchasing objects of art subject to the provisions of other applicable laws such as the extant Foreign Trade Policy of the Government of India. 13.8 The Scheme can also be used for remittance of funds for acquisition of ESOPs. The Scheme is in addition to acquisition of ESOPs linked to ADR / GDR and acquisition of qualification shares. 13.9 A resident individual can invest in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes, etc. under this Scheme. Further, the resident can invest in such securities out of the bank account opened abroad under the Scheme (see 13.12). 13.10 An individual who has availed of a loan abroad while as a non resident can repay the same on return to India under the Scheme as a resident. 13.11 The Scheme can be used for outward remittance in the form of a DD either in the resident individual's own name or in the name of beneficiary with whom he intends putting through the permissible transactions at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x 2)which provides that an authorised person shall require any person wanting to transact in foreign exchange to make such a declaration and to give such information as will reasonably satisfy him that the transaction will not involve and is not designed for the purpose of any contravention or evasion of the provisions of the FEMA or any rule, regulation, notification, direction or order issued there under. 14.2 Authorised Dealers are also required to keep on record any information / documentation, on the basis of which the transaction was undertaken, for verification by the Reserve Bank. In case the applicant refuses to comply with any such requirement or makes unsatisfactory compliance therewith, the Authorised Dealer shall refuse, in writing, to undertake the transaction and shall, if he has reasons to believe that any contravention / evasion is contemplated by the person, report the matter to the Reserve Bank. 14.3 Authorised Dealers have specifically been advised that they may release foreign exchange up to USD 100,000 each for employment, emigration, maintenance of close relatives, education and medical treatment abroad without insisting on any supporting documents but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. There is no monetary ceiling fixed by the Reserve Bank for remittances, if any, under this facility. 16.7 Use of ICC for payment in foreign exchange in Nepal and Bhutan is not permitted. A.17 International Debit Cards 17.1 Banks authorised to deal in foreign exchange are issuing International Debit Cards (IDCs) which can be used by a resident for drawing cash or making payment to a merchant establishment overseas during his visit abroad. It is clarified that IDCs can be used only for permissible current account transactions and the item-wise limits as mentioned in the Schedules to the Rules, as amended from time to time, are equally applicable to payments made through use of these cards. 17.2 The IDCs cannot be used on internet for purchase of prohibited items like lottery tickets, banned or proscribed magazines, participation in sweepstakes, payment for call-back services, etc., i.e. for such items/activities for which drawal of foreign exchange is not permitted. 17.3 The International Banking Divisions/Foreign Exchange Departments of AD banks may submit a statement as on December 31, each year (as per proforma at Annex-5) in case the aggregate forex utilizatio ..... 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