(i) By its Notification No.FERA 128/93-RB dated 29th March 1993, Reserve Bank has granted general permission under Section 9(1)(a) of FERA 1973 to companies in India for making payments in Indian rupees to their non-resident (including foreign nationals) non-wholetime directors while on a visit to India for the companys work such as attending Board meeting etc., towards sitting fees, commission or remuneration by way of monthly or quarterly or annual payment in accordance with the provisions contained in the Companys Memorandum of Association or Articles of Association or in any agreement entered into by it or in any resolution passed by the company in general meeting or by its Board of Directors. This general permission is, however, subject to the condition that the company has obtained the necessary approval from the Central Government under Section 309(4) or Section 310 of the Companies Act, 1956 wherever it applies.

(ii) Applications for remittances of savings, if any, out of sitting fees paid to the non-resident directors by the Indian companies concerned for actual attendance in Board meetings should be made to authorised dealers on form A2 together with a certificate issued by the company concerned confirming payment of sitting fees. Authorised dealers may allow such remittances without reference to Reserve Bank on verification of the companys certificate regarding payment of the sitting fees.

(iii) Applications for remittances on account of payment of commission, remuneration, etc. to the non-resident directors should be made by the Indian companies concerned to authorised dealers on form A2 together with a certified copy of the audited balance sheet of the company and a work sheet duly certified by a Chartered Accountant indicating how the remittable amount has been arrived at. Applicants undertaking/Accountants certificate regarding payment of income-tax in the prescribed form should also be submitted (cf paragraph 3B 10). Authorised dealers may allow remittances of net commission/remuneration after satisfying about the correctness of the amount and verification of the terms of appointment of the director