RBI issues new forex guidelines
RBI, vide Master Circular No.05/2007-08 dated 21st February 2008 on "Miscellaneous Remittances from India - Facilities for Residents" has consolidated the existing instructions updated as on 1st January 2008 which will be valid till 1st July 2008. The salient features of the new guidelines issued by RB are as under:
Sale of Exchange
Authorized Dealers may release foreign exchange for travel purposes based on a declaration given by the traveler regarding the amount of foreign exchange availed of during the financial year as indicated below:
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For Iraq, Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States - Not exceeding USD 2000 or its equivalent.
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For Iraq or Libya - Not exceeding USD 5000 or its equivalent.
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For Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States - Full exchange may be released.
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.
Business Visits
Foreign exchange for undertaking business travel or attending a conference or specialized training is to be given as specified in Schedule III to the Rules as follows:
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Release of exchange exceeding USD 10,000 or its equivalent in one calendar year, for one or more private visits to any country (except Nepal and Bhutan).
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@ Gift remittance exceeding USD 5,000 per remitter/donor per annum.
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# Donation exceeding USD 5000 per remitter/donor per annum.
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Exchange facilities exceeding USD 100,000 for persons going abroad for employment.
Release of foreign exchange, exceeding USD 25,000 to a person, irrespective of period of stay, for business travel or attending a conference etc.
Period of surrender of foreign exchange
General permission is available to any resident individual to surrender received / realized / unspent/ unused foreign exchange to an Authorised Person within a period of 180 days from the date of receipt / realization/ purchase/ acquisition / date of return of the traveler, as the case may be.
Unspent Foreign Exchange
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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 traveler. Exchange so brought back can be utilized by the individual for his/her subsequent visit abroad.
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A person resident in India can open, hold and maintain with an Authorised Dealer in India, a Resident Foreign Currency (Domestic) Account from any of the sources like, payment for services rendered abroad, as honorarium, gift, services rendered or in settlement of any lawful obligation from any person not resident in India.
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The eligible credits to the Resident Foreign Currency are as under:
Acquired by him from an Authorised Person for travel abroad and represents the unspent amount thereof, Or
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 and by way of honorarium or gift, Or
Acquired by him, from any person not resident in India, and who is on a visit to India, as honorarium, gift, for services rendered or in settlement of any lawful obligation.
Payment in Rupees
Authorised dealers may accept payment in cash up to Rs.50,000 (Rupees Fifty Thousand Only) against sale of foreign exchange for travel abroad. Wherever the sale of foreign exchange exceeds to Rs.50,000, the payment must be received only by a Crossed cheque drawn on the applicant’s bank account, Or, Crossed cheque drawn on the bank account of the firm/company sponsoring the visit of the applicant, Or, Banker’s Cheque/Pay Order/Demand Draft.
Advance Remittance – Import of Services
Authorised 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 guarantee from an 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.
Endorsement on Passport
It is not mandatory for authorized dealers to endorse the amount of foreign exchange sold for travel abroad on the passport of the traveler. However, if requested by the traveler, they may record under their stamp, date and signature, details of foreign exchange sold for travel.
International Credit Cards
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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 softwares or import of any other item permissible under Foreign Trade Policy (FTP).
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Resident individuals maintaining foreign currency accounts 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 card holder or though 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.
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The applicable limit will be the credit limit fixed by the card issuing banks. There is no monetary ceiling fixed by the Reserve Bank for remittances, if any, under this facility.
