MASTER CIRCULAR ON MISCELLANEOUS REMITTANCES FROM
INDIA ‑ FACILITIES FOR RESIDENTS
MASTER CIRCULAR NO. 3/2004‑05, DATED 1.7‑2004, ISSUED BY FOREIGN EXCHANGE DEPARTMENT, RBI
Miscellaneous
remittance facilities for residents are being allowed in terms of section 5 of
the Foreign Exchange Management Act, 1999, read with Government of India
Notification No. GSR 381(E) dated May 3, 2000 as amended from nine to lime.
2. This Master Circular
consolidates the existing instructions on the subject of "Miscellaneous
Remittances from India ‑ Facilities for Residents" at one place, The
list of underlying circulars/ notifications is set out at Annex
3. As recommended by the
Committee on Procedures and Performance Audit on Public Services (CPPAPS)
(Chairman: Shri S. S. Tarapore) set up by the Reserve Bank, this Master
Circular is being issued with a sunset clause of one year. This circular will
stand withdrawn on July 1, 2005 and be replaced by an updated Master Circular
on the subject.
LIST OF CIRCULARS, WHICH HAVE BEEN CONSOLIDATED IN THIS MASTER CIRCULAR ON MISCELLANEOUS REMITTANCES FROM INDIA ‑ FACILITIES FOR RESIDENTS
|
SI.
No. |
Circular
No. |
Date |
|
1. |
AP (DIR Series) Circular No. 1 |
June 1,2000 |
|
2. |
AP (DIR Series) Circular No. 19 |
October 30, 2000 |
|
3. |
AP (DIR Series) Circular No. 20 |
November 16, 2000 |
|
4. |
AP (DIR Series) Circular No. 11 |
November 13, 2001 |
|
5. |
AP (DIR Series) Circular No. 12 |
November 23, 2001 |
|
6. |
EC.CO.FMD.599/18.08.01/2001-02 |
January 21, 2002 |
|
7. |
AP (DIR Series) Circular No. 53 |
June 27, 2002 |
|
8. |
AP (DIR Series) Circular No. 16 |
September 12,2002 |
|
9. |
AP (DIR Series) Circular No. 17 |
September 12,2002 |
|
10. |
AP (DIR Series) Circular No. 37 |
November 1, 2002 |
|
11. |
AP (DIR Series) Circular No. 51 |
November 18,2002 |
|
12. |
AP (DIR Series) Circular No. 53 |
November 23, 2002 |
|
13. |
AP (DIR Series) Circular No. 54 |
November 25, 2002 |
|
14. |
AP (DIR Series) Circular No. 64 |
December 24, 2002 |
|
15. |
AP (DIR Series) Circular No. 65 |
January 6, 2003 |
|
16. |
AP (DIR Series) Circular No. 73 |
January 24, 2003 |
|
No |
Circular No. |
Date |
|
17 |
AP (DIR Series) Circular No. 103 |
May 21, 2003 |
|
18 |
AP (DIR Series) Circular No. 3 |
July 17,2003 |
|
19 |
AP (DIR Series) Circular No. 7 |
August 12 2003 |
|
20 |
AP (DIR Series) Circular No. 8 |
August 16,2003 |
|
21. |
AP (DIR Series) Circular No. 33 |
November 13, 2003 |
|
22, |
AP (DIR Series) Circular No. 55 |
December 23,2003 |
|
23. |
AP (DIR Series) Circular No. 64 |
February 4, 2CO4 |
|
24. |
AP (DIR Series) Circular No. 71 |
February 20,2004 |
|
25. |
AP (DIR Series) Circular No. 76 |
February 24, 2004 |
|
26. |
AP (DIR Series) Circular No. 77 |
March 13,2004 |
|
27. |
AP (DIR Series) Circular No. 86 |
April 17, 2004 |
|
28. |
AP (DIR Series) Circular No. 90 |
May 3, 2004 |
|
29. |
Foreign Exchange Management
(Current Account Transactions) Rules, 2000 |
Not reproduced |
Release of
Foreign Exchange by Authorised Dealers.
1. 1 For
release of foreign exchange to persons resident in India for travel abroad,
authorized dealers are to be carded by the Rules made by the Govt. of India
under section 5 of Foreign Exchange Management Act, 1999 which are detailed in
terms of Foreign Exchange Management (Cut rent Account Transactions) Rules,
2000 notified the Government of India. In terms of the said rules, drawal of
exchange for certain transactions have been prohibited and restrictions have
been placed on certain other transactions. While drawal of exchange for certain
categories of transactions as listed in Schedule I is expressly prohibited,
exchange facilities for transactions included in Schedule if to the rules may
be permitted by the authorized dealers provided the applicant has secured the
approval from the Ministry/Department of Government of India indicated against
the transactions. In respect of transactions included in Schedule III, where
remittance applied for exceeds the limit, if any, indicated in the Schedule or
other transactions included in Schedule III (for which no, limits have been stipulated), prior approval of Reserve Bank
would be required. All applications for release of exchange exceeding the
limits prescribed in Schedule III to tire Govt. Notification should be referred
to the Regional Office of the Foreign Exchange Department, under whose
jurisdiction the applicant is functioning/residing.
1.2 In terms
of clause (b) of rule 2 of the
Government Notification No. GSR 381 (E) dated 3rd May, 2000, (Annexure A)
'Drawal" includes use of International Credit Cards, International Debit
Cards, ATM Cards, etc. Further, in terms of clause (h) of section 2 of Foreign
Exchange Management Act, 1999, 'currency", infer alia, includes
International Credit Cards. The Reserve Bank has also, vide its Notification
No. FEMA 15/2000‑RB dated 3rd May, 2000, notified ATM Cards and Debit
Cards as "Currency". Accordingly, all Rules, Regulations made and
Directions issued under the Act apply to Credit Cards, ATM Cards, Debit Cards,
etc., also.
1.3 Resident
individuals maintaining a foreign currency account with an authorised dealer in
India or a bank abroad, as permissible under extant foreign Exchange
Regulations, are free to obtain International Credit Cards issued by overseas banks
and other reputed agencies Authorised dealers may allow remittances by their
constituents maintaining foreign curt enc) accounts with them to meet the
charges incurred against the ICCs issued by
the foreign banks and other reputed agencies. The remittance should,
however, be made to the Card issuing bank/agency and not to a third party.
1.4 It may be
noted that in terms of item (b) of
rule 3 of the Govt. Notification No. GSR 381(E) dated 3rd May, 2000, no release
of foreign exchange is admissible for travel to Nepal and Bhutan.
2.1 Where
approvals have been granted by the Reserve Bank/Government of India, foreign
exchange may be sold within the period of validity stated in the approval and
the sale be endorsed on the reverse of the original approval.
2.2 On the
basis of a declaration given by the traveller regarding the amount of foreign
exchange availed of during a calendar year, authorised dealers may release
exchange for tourism and private purposes.
2.3 In case
of issue of travellers cheques, the traveller should sign the cheques in the
presence of an authorized official and [be purchaser's acknowledgement for
receipt of the it travellers cheques should be held on record.
2.4 Out of
the Over all 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 2000 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 way be released |
2.5 The Forms
A2 relating to sale of foreign exchange for travel abroad, should be retained
for a period of one year by the authorised dealers, together with the related
documents, for the put pose of verification by then Internal Auditors. Such
forms need not be obtained by the authorised dealers for remittance
applications not exceeding USD 5,000.
2.6 In cases
where the remittances are allowed on the basis of self declaration, the onus of
furnishing the correct details in the application, will remain with the
applicant who has certified the details relating to the purpose of such
remittance.
3.1 A person
who has fallen sick after proceeding abroad may also be released foreign
exchange by an authorized dealer for medical treatment outside India in
accordance with rule 5 of Government Notification No. GSR 381 (E) dated May 3,
2000 and further Notification vide GSR No.731 (E) dated September 3, 2003.
3.2 With a
view to enable residents to avail (if foreign exchange for medical treatment
abroad without are hassles and any loss of time, authorised dealers may release
foreign exchange upto an amount of USD 100,000 or its equivalent, on the basis
of self declaration that the applicant is buying exchange for medical treatment
outside India, without insisting on any estimate from a hospital/ doctor.
3.3 For
amount exceeding the above limit, estimate from the doctor in India or
hospital/doctor abroad, is required to be submitted to the authorised dealers
(a, provided in the Gazette Notification).
With a
view to provide hassle free release of foreign exchange to resident individuals
for various purposes, authorized dealers may release foreign exchange not
exceeding USD 5000 or its equivalent, for all permissible current account
transactions on the basis of a simple letter from the applicant containing the
basic information viz., name and address of the applicant/beneficiary, amount
to be remitted and the purpose of remittance, without insisting on submission
of Form A 2.
Dance
troupes, artistes, etc., who wish to undertake tours abroad for cultural
purposes should apply to the Ministry of Human Resources Development
(Department of Education and Culture), Government of India, for their foreign
exchange requirements. Authorised dealers may release foreign exchange, on the
strength of the sanction from the Ministry, to the extent and subject to
conditions indicated therein.
Foreign
exchange for private visit can also be released to a person who is to ailing of
foreign exchange for travel outside India for any purpose,
In case
the foreign exchange purchased for any purpose is not used for the purpose or
for any other purpose for which purchase or acquisition of foreign exchange is
permitted under tire provisions of FEMA, 1999 or Rules or Regulations made
there under and the evidence submitted to the satisfaction of the authorised
dealer, the same or the unused per lion thereof is required to be surrendered
to an authorised person within a period of 60 (sixty) days from the date of its
purchase (cf. Notification No. FEMA 9/2000‑RB dated 3rd May, 2000).
Note: In
cases where a person approaches an authorized person for surrendering foreign
exchange after 60days, the authorized person should not refuse to purchase the
foreign exchange merely on the ground that the prescribed period of 60 days has
expired.
8.1 Unspent
foreign exchange brought back in India by a traveller should be surrendered to
an authorised person within 90 days from the date of return of the traveller,
if the unspent foreign exchange is in the form of currency notes. If such foreign
exchange is in the form of travellers cheques, the same should be surrendered
to an authorised person within 180 days from the date of return. Exchange so
brought back can be uilised by the traveller for his subsequent visit abroad
during the period specified above.
8.2 However,
a returning traveller is also permitted to retain with him, foreign currency
travellers cheques and currency notes upto art aggregate amount of USD 2000 and
foreign coins without any ceiling (cf, Notification No. FEMA 11 /2000 RB dated
3rd May, 2000). Foreign exchange so retained, can be uilised by the traveller
for his subsequent visit abroad.
8.3 A person
resident in India can open, hold and maintain with an authorized dealer in
India, a Resident Foreign Currency (Domestic) Account, out of foreign exchange
acquired in the form of currency notes, bank notes and travellers cheques from
any of the sources like, payment for services rendered abroad, as honorarium,
gift, services tendered or in settlement of any lawful obligation front any
person nut resident in India.
The
account may also be credited with/opened out (if foreign exchange earned like
proceeds of export (if goods and/or services, royalty, honorarium, etc., and/or
gifts received from close relatives (as defined in the Companies Act) and
repatriated to India through normal banking channels by resident individuals.
8.4 The
eligible credits to the Resident Foreign Currency (Domestic) Account, out of
foreign exchange acquired in the form of currency notes, bank notes and
travellers cheques, are as under :
(i) acquired by him from
an authorised person for travel abroad and represent the unspent amount
thereof.
Or
(ii) acquired by him, while
on a visit to any place outside India, by way of payment for services not arising
from any business in or anything done in India.
Or
(iii) acquired by him, from
any person not resident in India, and who is on a visit to India, as
honorarium, gift, for set vices tendered or in settlement of any lawful
obligation.
Or
(iv) acquired by him by way of honorarium, or
gift, while on a visit to any place outside India,
Note:
Where a person approaches an authorised person for surrender of foreign
exchange after the prescribed period, authorised person should not refuse to
purchase the foreign exchange merely, on the ground that the prescribed period
has expired.
A.9 Remittances for Tour Arrangements,
etc.
9.1
Authorised dealers may remit foreign exchange upto a reasonable limit, at the
request of a traveller towards his hotel accommodation, tour arrangements,
etc., in the counties proposed to be visited by him, provided it is out of the
foreign exchange purchased by the traveller front an authorized 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 art arrangements for travellers town India,
provided the authorised dealer is satisfied that the remittance is being made
out of the foreign exchange purchased by the cancer tied traveller 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 cancellation of bookings/tour arrangements, etc.,
and
(b) the debits in foreign
exchange are for making payments towards hotel accommodation, tour
arrangements, etc., outside India, in accordance with 9.2 above.
9.4
Aulhorised dealer ma, allow tour operators to remit the cost of rail/road/water
transportation charges Outside India without and prior approval from the
Reserve Bank, net of commission/mark up, due to the agent. The sale of
passes/ticket in India can lie made either against the payment in Indian Rupees
or in foreign exchange released for visits aborad. The cost of passes /tickets
collected in Indian Rupees need not be adjusted in the travellers' entitlement
of foreign exchange for private visit.
9.5 In
respect of consolidated tours it ranged by travel agents in India for foreign
tourists visiting India and neighboring countries like Nepal, Bangla Desh, Sri
Lanka, etc., against advance payments/reimbursement through in authorised
dealer, part of the foreign exchange received in India against such
consolidated tour arrangement, may require to be remitted from India to these
countries for services rendered by travel agents and hoteliers in the
neighboring countries. Authorised dealers may allow such remittances after
verifying that the amount being remitted to the neighboring, countries
(inclusive of remittances, if any, already made against the tour) does not
exceed the amount actually remitted to India and the country of residence of
the beneficiary is not Pakistan.
Authorised
dealers may accept payment in cash upto Rs. 50 000 (Rupees fifty thousand only)
against sale of foreign exchange for travel abroad (for private visit or for am
other purpose). Wherever the sale of foreign exchange exceeds the amount
equivalent to Rs. 50,000, the payment must be received only by a
(i) crossed cheque drawn on the
applicant's bank account, or
(ii) crossed cheque drawn
on the bank account of the firm/company sponsoring the visit of the applicant,
or
(iii) Banker's Cheque/Pay Order/Demand Draft,
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, as explained above.
Authorized
dealers may allow advance remittance for providing services under current
account transaction for which the release of foreign exchange is admissible.
However, where the amount exceeds USD 100,000 or its equivalent, a guarantee
from a bank of International repute situated outside India or a post guarantee
from in authorized 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 authorized 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,
Under this
Scheme, authorized dealers may freely allow remittances by the individuals up
to USD 25,000 per calendar year for mo, permissible current or capital account
transactions or a combination of both. Resident individuals are free to acquire
and hold immovable property or shares or any other asset outside India without
prior approval of the Reserve Bank. Individuals can also open, maintain and
hold foreign currency accounts with a bank outside India for making remittances
under the Scheme without prior approval of the Reserve Bank. The foreign
currency accounts may be used for putting through all transactions connected
with or arising from remittances eligible under this Scheme.
The
Reserve Bank will not, generally, prescribe the documents which should be
verified by the authorized dealers while releasing foreign exchange. In this
connection attention of authorized dealers is drawn to sub-section (5) of
section 10 of tile Foreign Exchange Management Act, 1999 (42 of 1999) which
provide that an authorized person shall require that pet son 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.
Authorized
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 Batik, in case the applicant refuses to comply with any such
requirement or makes unsatisfactory compliance therewith, the authorized 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.
However,
with a view to provide hassle free service to the residents, it has also been
decided to simplify the procedures and documentation formalities in respect of
non‑import remittances. Accordingly, in consultation with FEDAL the A‑2
Form has been modified to incorporate tile application form and the declaration
in terms of section 10(5) of FEMA, 1999.The specimen form to be used in this
regard is enclosed as Annexure V to our A.P. (DIR Series) Circular No.77dated
March 13, 2004 The individual customer will be required to submit early this
form in respect of permissible transaction pertaining to individuals up to a
limit of USD 5000 is per our A.P. (DIR Series) Circular No. 55 dated December
23,2003. The AD could then fill up the reverse of tire form which contains purpose‑wise
codes.
For
undertaking transactions under the Liberalized Remittance Scheme of USD 25,000
for resident individuals (item No.12 above), ADs may be guided by the
instructions conveyed in out‑ A.P. (DIR Series) Circular No. 64 dated
February 4, 2004. As regards other transactions, apart from For in A2 as at
Annexure V, the AD may call for additional information and documents as may be
required.
Further,
the authorized dealers have specifically been advised to release foreign
exchange upto USD 100,000 each for employment abroad, emigration, maintenance
of close relatives abroad, education abroad and medical treatment abroad
without insisting on any supporting documents but on the basis of self‑declaration
incorporating certain basic details of the transactions and submission of Form A2
It is not
mandatory for authorized dealers to endorse, the amount of foreign exchange
sold for travel abroad. However, it requested by the traveller, they may record
under their stamp, date and signature, details of foreign exchange sold for
travel.
The
restrictions contained in rule 5 of tire Foreign Exchange Management (Curt cut
Account Transactions) Rules, 2000 will not be applicable for use of later
national Credit Cards (ICCs) by residents for making payment towards expenses,
" line on a visit outside India, to the extent of the limit of the card.
Residents
can use ICCs on internet for any purpose for which exchange can be purchased
from an authorized dealer in India, e.g. for import of books, purchase of
downloadable software’s or import of any other item permissible under EXIM
Policy.
ICCs
cannot be used on internet or otherwise for purchase of prohibited items, like
lottery tickets, banned or prescribed magazines, participation in sweepstakes,
payment for call‑back services etc., since no drawal of foreign exchange
is permitted for such items/activities.
There is
no aggregate monetary ceiling separately prescribed for rise of ICCs through
internet.
Resident individuals maintaining a foreign currency account with an
authorized dealer in India or a bank abroad, as permissible under extant
Foreign Exchange Regulations, are free to obtain ICCS issued by overseas banks
and other reputed agencies, The charges
incurred against the card either in India or abroad, can be met out of funds
held in such foreign currency account /s of the cat d holder or through
remittances, if any, from India only through a bank where the card-holder has a
current or savings account. The remittance for this purpose, should also be
made directly to the card‑issuing agency abroad, and not to a third
party.
It is also
clarified that the applicable credit limit will be tire limit fixed by tire
card issuing banks. There is no monetary ceiling fixed by the RBI for
remittances, if any, under this facility.
A.16 Acquisition of foreign securities
under Employees Stock Option Plan (ESOP)
Resident
individuals who are either employees or director of an Indian office or branch
of a foreign company in which foreign holding, is not less than 51% are
permitted to acquire foreign securities under ESOP Scheme without any monetary
limit. They are also permitted to freely sell the shares provided the proceeds
there of are repatriated to India.
[Not
Reproduced]