RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI-400001

A.D.(M.A.Series) Circular No.27 August 31, 1999

To,

All Authorised Dealers in Foreign Exchange

Dear Sirs,

Amendments to Exchange Control Manual (ECM)

It has been decided to amend/modify exchange control regulations as stated in the following paragraphs.

1. Imports through courier - submission of documentary evidence of import

In terms of paragraph 7A.23 of Exchange Control Manual (ECM), authorised dealers are required to obtain from importers, a copy of Bill of Entry, in the prescribed form issued by the Customs in the name of the registered courier company, where C.I.F. value of the consignment imported through Courier Service is less than Rs.1 lakh, duly certified by the authorised dealer of the courier company, indicating thereon the particulars of consignment for which remittance was/is sought to be made. It has now been decided that for imports through courier service, for value less than Rs.1 lakh, authorised dealers may accept a copy of Bill of Entry in the prescribed form issued by the Customs in the name of the Courier Company, duly certified by the courier company itself.

2. Import of Drawings and Designs

In terms of paragraph 7A.26 authorised dealers have been permitted to allow remittance towards import of drawings and designs through E-mail or Fax, subject to certain conditions. In these cases authorised dealers should advise importers to keep Custom authorities informed of such imports made by them. It is also clarified that irrespective of mode of import of drawings and designs, Research and Development Cess has to be paid if Research and Development Cess Act, 1986 is applicable.

3. Issue of Commercial Paper to Overseas Corporate Bodies by Indian companies on non-repatriation basis

In terms of paragraph 10C.10(ii) of ECM, Reserve Bank vide its Notification No.F.E.R.A.85/89-RB of 9th October 1989 has granted general permission to Indian companies to issue Commercial Papers to NRIs subject to certain conditions laid down in the above referred paragraph/notification. Reserve Bank has since issued a Notification No.F.E.R.A.205/99-RB dated 3rd July 1999 amending its earlier Notification dated 9th October 1989 referred to above extending the general permission to Indian companies to issue Commercial Paper to Overseas Corporate Bodies (OCBs) also, on non-repatriation basis subject to same terms and conditions.

4. LEC (NRI) statement

In terms of paragraph 10C.23(i) of ECM, the link offices of authorised dealers submit a statement in form LEC (NRI) giving details of purchases/sales of shares/debentures (company-wise) made by all the designated branches on daily basis. NRIs/OCBs have been now permitted to buy or sell the equity shares/debentures through their own brokers who are authorised members of registered stock exchanges and thereafter report such purchases/sales to the bank with whom their portfolio account is maintained. Consequently, form LEC (NRI) has been suitably amended so as to include, the number of shares purchased/sold by NRIs/OCBs through their brokers.

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

Volume I

In item (b) of paragraph 7A.1(iii) the words "& 7A.23 of ECM" may be substituted by "7A.23 & 7A.26 of ECM".

The existing paragraph 7A.23 may be replaced by Slip 1.

A Note may be added under paragraph 7A.26 as per Slip 2.

The existing paragraph 10C.10(ii) may be substituted by Slip 3.

Volume II

The existing Notification No.F.E.R.A.85/89-RB dated 9th October 1989, under Section 9 may be substituted by Slip 4.

Form LEC(NRIs) may be replaced by Slip 5.

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

7. 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.