Foreign Exchange Management (Offshore Banking Unit) Regulations, 2002
FEMA 71/2002-RB, dated 7-9-2002 - In exercise of the powers conferred by section 6,
section 7, section 8, section 9 and section 47 of the Foreign Exchange
Management Act, 1999 (42 of 1999) and all other powers enabling it in this
behalf, the Reserve Bank of India makes the following Regulations, namely :—
(i) These Regulations shall be called the Foreign Exchange
Management (Offshore Banking Unit) Regulations, 2002.
(ii) They
shall come into force from the date of their publication in the Official
Gazette.
In these Regulations, unless the context requires
otherwise—
(i) “Act” means the Foreign Exchange
Management Act, 1999 (42 of 1999);
(ii) “Offshore Banking Unit” means a branch of a bank in India
located in the Special Economic Zone and holds an authorisation issued under
clause (a) of sub-section (1) of section 23 of the Banking Regulation
Act, 1949 (10 of 1949);
(iii) “Regulations” means the Regulations made
under the Act;
(iv) “Special Economic Zone” means the Special Economic Zone
notified by the Government of India;
(v) words and expressions used but not defined in these
Regulations shall have the same meanings respectively assigned to them in the
Act.
3. Notwithstanding the
status, as an authorised dealer, of the bank setting up the Offshore Banking
Unit, and save as otherwise directed by the Reserve Bank, the Offshore Banking
Unit shall not be regarded as an authorised dealer for the purpose of the Act,
rules or regulations made thereunder.
4. Save as otherwise provided in these or any other
Regulations or directed by the Reserve Bank, nothing contained in any other
Regulations shall apply to an Offshore Banking Unit.
5. Save as otherwise provided in these Regulations or
with the permission of the Reserve Bank, an Offshore Banking Unit shall not
conduct any activity or undertake any transaction with residents in India.
Transactions which may be undertaken by
an Offshore Banking Unit
6. An Offshore Banking Unit
may undertake foreign exchange transactions with any authorised dealer in India
only on principal-to-principal basis.
7. An Offshore Banking Unit
may undertake transaction in foreign exchange with a unit located in Special
Economic Zone to the extent the latter is eligible to enter into or undertake
such transaction, within the ceilings and subject to the conditions specified
in the Regulations governing such transaction.
8. Engagement of an Offshore
Banking Unit in any of the forms of business specified in sub-section (1) of
section 6 of the Banking Regulation Act, 1949 shall be only in foreign exchange
and shall be subject to these Regulations and the conditions of licence issued
under the said Act.