Release of Foreign Exchange for Small Value Remittances
AP (DIR Series) (2002-2003) Circular No.16, dated 12-9-2002
Attention
of authorised dealers (ADs) is drawn to the sub-section (5) of section 10 of
the Foreign Exchange Management Act (FEMA), 1999, which provides that an
authorised person shall before undertaking any transaction in foreign exchange
on behalf of any person require that person 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 Act or of any rule, regulation, notification,
direction or order issued thereunder.
2. With a view
to provide hassle free release of foreign exchange to the resident individuals
for various purposes, it has since been decided that ADs may release an amount
upto USD 500 or its equivalent for all permissible transactions on the
basis of a simple letter from the applicant containing the basic information, viz.,
name and the address of the applicant, name and address of the beneficiary,
amount to be remitted and purpose of remittance. It is clarified that submission
of A2 Form in such cases need not be insisted upon.
3. It is
further clarified that Authorised Dealers need not obtain any document as long
as exchange is being purchased for a permissible transaction and the amount
does not exceed USD 500 or its equivalent and the payment is made by a cheque
drawn on the applicant’s bank account or by a Demand Draft.
4. Authorised
Dealers may bring the contents of the circular to the notice of their
constituents concerned.
5. The
directions contained in this circular have been issued under section 10(4) and
section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).