RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001

A.D.(M.A. Series)Circular No.3 January 9, 1999

To,

All Authorised Dealers in Foreign Exchange

Dear Sirs,

Release of exchange for higher studies abroad

Attention of authorised dealers is drawn to item XVI of Part A of Annexure I to Chapter 8 of Exchange Control Manual regarding release of exchange for studies abroad. It has been decided to simplify the application Form TRS and introduce the following changes with immediate effect. The other terms and conditions would, however, remain unchanged.

Authorised dealers have been permitted to release exchange upto U.S.$ 30,000 per annum on production of a suitable documentary evidence indicating the actual requirement of the student. Sometimes the letter of confirmed admission received by the student does not indicate the estimate of exchange requirements. In such cases authorised dealers may release exchange upto U.S.$ 15,000 to the student for first six months and necessary adjustments may be made while releasing exchange for subsequent period on the basis of documentary evidence produced by the student in this regard.

In cases where the student is in receipt of full sponsorship from a close relative, he will be eligible for full exchange, if he desires not to avail of the relative's hospitality. If the student is in receipt of scholarship abroad, the amount thereof may be adjusted against the amount of exchange admissible to him only to the extent desired by the applicant. Deposit towards advance tuition fees/maintenance may be remitted if insisted upon by the overseas institution. Authorised dealer should take an undertaking from the student that in the event of his not joining the course he would obtain the admissible refund and repatriate it to India.

In terms of item (c) under the caption "Quantum of exchange" authorised dealers have been advised, among other things, that tuition fees should be remitted by means of a draft issued in the name of the overseas university/educational institution. It would now be in order for authorised dealers to release entire amount of exchange in favour of the student concerned. The amount of exchange to be released in the form of currency notes and travellers cheques should be restricted to U.S.$ 500 and U.S.$ 1,500 respectively as hitherto.

2. The following consequential amendments may be carried out in the Exchange Control Manual.

Volume I

Item (ii)(v) in paragraph 8A.1 may be deleted.
Item XVI of Part A of Annexure I to Chapter 8 may be substituted as per Slip 1.
Volume II

Form TRS may be substituted as per Slip 2.

3. Authorised dealers may bring the contents of this circular to the notice of their constituents concerned.

4. The directions contained in this circular have been issued under Section 73(3) of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.

Yours faithfully
B. MAHESHWARAN
Chief General Manager

Slip 1
[AD/MA 3/1999]
XVI. Studies Abroad

Application :
Form TRS:
Eligibility :

Following categories of students are eligible for release of exchange for studies abroad provided they have secured admission to an overseas university/college/educational institution or an articleship from a firm of Chartered Accountants in U.K.

(i) Students holding Indian passports
(ii)Students holding foreign passports dependent on their parents resident in India.
Notes :
A.Exchange facilities may be made available to eligible students who had gone abroad without availing exchange facilities from India for the remaining duration of the course.

B. Exchange may also be released to students for continuing the same course for which exchange was released earlier or for any other course at the same or any other educational institution.

Duration of Course :
The actual duration of the course.
Quantum of exchange :

U.S.$ 30,000 per annum towards tuition fees, maintenance expenses, books etc. Exchange in excess of U.S.$ 30,000 (at actuals) may be released to the extent of the requirement of exchange indicated in the letter from the overseas institution. If the student is in receipt of scholarship, the amount thereof may be adjusted against the amount of exchange admissible to him, only to the extent desired by the applicant.

In cases where the student is in receipt of full sponsorship from a close relative, he will be eligible for full exchange, if he desires not to avail of the relative's hospitality.

1In case letter of admission from overseas university does not indicate the estimate of exchange requirements, exchange up to U.S.$ 15,000 may be released subject to adjustment while releasing further exchange.

Exchange may be released for a period not exceeding one year at a time.

Exchange may be released in the form of currency notes not exceeding U.S.$ 500, and travellers' cheques not exceeding U.S.$ 1,500. The balance amount may be released in the form of the draft in favour of the student/the university as desired by the applicant. Students going to Russia or other Republics of CIS countries may be released exchange in the form of currency notes for a period up to one year.

Maintenance of Records, Files, etc. :

Authorised dealers should preserve the case papers duly indexed in student-wise files/folders to facilitate reference for exchange release for subsequent period and also for the purpose of internal audit/inspection.