A.P. (DIR Series) (2000-2001) Circular No. 1, dated 1-6-2000
Clarification on flm/rlm
Attention
of the Full Fledged Money Changers (FFMCs) is invited to para 4 of AD (MA
Series) Circular No. 11, dated 16th May, 2000 wherein it has been indicated
that the directions contained therein shall be applicable, mutatis mutandis to
money changers and they shall continue to be governed by the provisions of
FLM/RLM as amended from time to time. In terms of FEMA 1999, the current
regulations stand modified as under :
Quantum of exchange permitted to be released for the approved purposes
(a) Exchange
not exceeding US $ 5000 or its equivalent per person in one calendar year for
one or more private visits to any country (except Nepal and Bhutan) as against
the quantum of exchange now allowed under BTQ (para 10 of FLM).
(b) Exchange
not exceeding US $ 25000 to a person irrespective of period of stay for
business travel as against various scales of exchange existing as of now (para
11 of FLM).
2. It has
been decided that henceforth the Reserve Bank will not prescribe the documents
which should be verified by the Money Changers while releasing foreign
exchange. In this connection attention of Money Changers is drawn to
sub-section (5) of section 10 of the Foreign Exchange Management Act, 1999 (42
of 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 any rule,
regulation, notification, direction or order issued thereunder. Money Changers
are advised to keep on record any information/documentation on the basis of
which the transaction was undertaken for verification by the Reserve Bank. The
said clause further provides that where the said person (applicant) refuses to comply
with any such requirement or makes unsatisfactory compliance therewith, the
authorised person 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 Reserve Bank.
3. FFMCs are advised that they shall continue to be governed by
all other provisions of FLM.
4. Amendments
to FLM will be issued separately. In the meantime authorised persons may bring
the contents of this circular to the notice of their constituents.
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). Any
contravention or non-observance of these directions is subject to the penalties
prescribed under the Act.