A.D.(M.A. Series) Circular No.40 October 17, 1998
RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
To,
All Authorised Dealers in Foreign Exchange
Dear Sir,
Amendments to the Exchange Control Manual
Reserve Bank will be bringing out an updated version of the Exchange Control Manual (ECM) incorporating amendments made through A.D.(M.A. Series) Circulars issued up to 31st July 1998. Copies of the Manual will be available for sale at a price of Rs.400/- for a set of two Volumes sometime in the first week of December 1998. The updated version of ECM also incorporates certain other changes for which A.D.(M.A.series) circulars have not been issued. The important modifications made in the updated version are indicated below. Authorised dealers may please take a note of these revised instructions which come into force with immediate effect. As in the past the updated version of ECM will also be made available on floppy.
Paragraph Subject Nature of modification made
of ECM
(1) (2) (3)
Chapter 1
1. 1.27 Restrictions on In terms of Public Notice No.73(PN)97/02 dated transactions with 24th February 1998 issued by DGFT, the certain countries prohibition relating to imports/exports will be applicable only to Iraq. Existing paragraph 1.27 has been modified as per Slip 1
Chapter 3
2. 3B.3 Procedure for Last sentence beginning with "Forms in different"
making in Note'A' has been deleted. [cf. paragraph 8 of
applications AD/MA 51/1997]
3. 3B.10 Certificate/ In view of the insertion of a new paragraph 3B.10 Undertaking vide AD/MA/21 of 1998, the condition relating to regarding payment production of income-tax clearance/ No objection of income-tax certificate appearing in various paragraphs of ECM has been modified to read as 'Undertaking / certificate regarding payment of income-tax (cf.
Paragraph 3 B.10)
4. 3C.4 Forward cover for Sub-paragraph (iv) relating to hedging ofnon-residents remittance of profits by foreign banks has been dleted since foreign banks have been permitted to remit profits/surpluses to their Head Offices abroad without approval of Reserve Bank vide AD(MA)15 dated 4th June 1998.
Chapter 4
5. Ch.4 AD's Dealings Existing Chapter 4 has been revised as per Slip 2.withReserve Bank
Chapter 6
6. 6E.1 General The figures 25%/50% appearing in line 1 of paragraph 6E.1 have been modified as ` 50%/70% '.
7. 6E.2 Agency } Reference to Reserve Bank's code number has Commission ) been replaced by `Importer - Exporter Code Number On Exports
8. 6E.4 Export claims}
Chapter 8
9. 8A.1 Sale of Exchange Last sentence in sub-paragraph (ii) beginning with `After allowing the remittance.......' has been corrected as under:
`Authorised dealers should keep on record the documentary evidence produced by the applicant justifying the need for release of exchange in excess of the prescribed scale.'
10. Part`B' Remittances by a)Authorised dealers have been delegated Airlines/Shipping authority to allow remittances on account Companies or of lease rentals, repair charges of their Agents containers as well as charges for return of empty containers.
b)Authorised dealers are now required to monitor the level of outstanding receivables ofinward/outward consolidation from their overseas counterparts and where the receivable outstanding beyond 6 months are more than US$ 2500 they would require permission from Reserve Bank before making further remittances.
c) Part B of the Chapter has been revised. Existing Part B may be replaced by Slip
3.Index of Chapter 8 may be suitably amended.
Chapter 10
11. 10D.3} - Provisions contained in these paragraphs relating 10D.4) to grant of loans against NRI Bonds and India
10D.5) Development Bonds issued by SBI have been deleted as they are no more relevant
Chapter 13
12. 13A.11} Temporary Limit on temporary overdrawings in NRO saving
13B.20} Overdrawingsbank/NRE accounts has been raised from Rs.1000 toRs.20,000.
13. 13B.14 Rates of Interest The text of the paragraph has been modified as under:
"Rates of interest payable on NRE accounts should be in accordance with the instructions issued by Reserve Bank from time to time".
Chapter 14
14. Parts FCNR/FCNR(B)/ Parts A/B/C have been revised as per Slip 4 in view of A/B/C FCONR Schemes discontinuance of FCNR(A)/ FCONR Schemes. Index of Chapter 14 may be suitably amended.
15. 14E.1 General Paragraph has been revised as per Slip 5.
16. Annx.I Additional purposes A new item (11) has been added as to for use of under:
Ch.14 EEFC funds
"(11) Investments by Indian companies in JV/WOS abroad under the EEFC Fast Track Window (cf.paragraph 9A.5)".
Chapter 16
17. 16.9 Other Periodic Paragraph 16.9 has been revised as per Slip 6. Statements Supplement on Nepal/Bhutan
18. 6, 11, - Bhutan has been added in paragraphs 6 (last line),
20 and23 11,20 and 23
19. 18, 19 - Paragraphs 18, 19 and 21 have been revised as per and 21 as per Slip 7.
2. The contents of the revised paragraphs may please be brought to the notice of your constituents.
3. 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,
KHIZER AHMED,
Chief General Manager,
Restrictions on Transactions with certain countries
1.27 Export-Import Policy (1997-2002) prohibits exports to/imports from Fiji * and Iraq. No remittances should be made to these countries or on account of their Governments or any of their agencies or nationals except to the extent generally or specially authorised by Reserve Bank from time to time. However, there shall be no ban on the export of items to Iraq in cases where the prior approval of the concerned Sanctions Committee of the United Nations' Security Council has been obtained. Remittances and other facilities available to foreign nationals (Chapter 11) are not available to Pakistani nationals. Personal remittances to Pakistan shouldalso not be allowed.
* This prohibition is currently on Iraq only vide DGFT's Public Notice No.73(PN)/97-02 dated 24th February 1998
-----------------------------------------------------------------------------------------------
Slip 5
[AD/MA 40/1998]
General 14E.1 A scheme known as 'Resident Foreign Currency Accounts (RFC accounts) Scheme' has been drawn up by Reserve Bank in pursuance of Government of India Notification No. F.10/22/90/NRI Cell dated 17th July 1992 and Reserve Bank Notifications Nos. FERA.116, 117 and 118 /92-RB dated 7th September 1992 to enable eligible returning Indians to open and maintain foreign currency accounts with authorised dealers in India. The Scheme has been reproduced in Annexure II. Reserve Bank has also granted exemption from the prohibition imposed under Section 24 of FERA 1973 in respect of gift of foreign exchange held in India/abroad or of any property held abroad in certain cases referred to in its Notification No. FERA 165/95-RB dated 28th April 1995.
-----------------------------------------------------------------------------------------------
Slip 7
[AD/MA 40/1998]
Joint Ventures in Nepal
18. Although there are no restrictions on export of goods from India to Nepal or on transactions in Indian rupees with Indian and Nepalese individuals, firms, companies, etc. in Nepal the setting up of joint ventures in Nepal by firms, companies etc. resident in India requires approval of Reserve Bank in case any remittance towards equity capital or loan even in Indian rupees or export of goods/services towards equity contribution to the joint ventures is involved. Issue/Transfer of Shares and Securities to Persons Resident in Nepal and Bhutan
19 Issue and transfer of Indian rupee shares and securities to persons, firms, companies, etc. resident in Nepal require prior permission of Reserve Bank in terms of Section 19 of FERA 1973, even though the underlying sale transaction may be settled in Indian rupees. Purchase of such shares and securities of Indian company by persons, firms, companies resident in Nepal and Bhutan also requires approval of Reserve Bank under Section 29(1)(b) of FERA 1973. Remittance of dividend/interest on shares/securities held by persons, firms, companies, etc. resident in Nepal and Bhutan in Indian rupees is not, however, subject to restriction. Acquisition, Holding, etc. of ImmovableProperty in India by Nepalese/Bhutanese Nationals/Companies
21. Nepalese/Bhutanese nationals, whether resident in India or not, should obtain prior permission of Reserve Bank under Section 31 of FERA 1973, to acquire, hold, transfer or dispose of by sale, mortgage, lease (for a period exceeding five years), gift, settlement or otherwise, any immovable property in India even though the transactions may be settled in Indian rupees. (See paragraph 11 E.4 regarding general permission ).
Slip 2
[AD/MA 40/1998]
CHAPTER 4
Í AUTHORISED DEALERS' DEALINGS WITH RESERVE BANK
4.1 General
4.2 Settlement of Rupee Leg
4.3 Value Date
4.4 Reporting of Transactions
4.5 Minimum and Multiple
Requirements
4.6 Confirmation of Purchase/Sale
from/to Reserve Bank
4.7 Payment of Rupee Value against
Sale of Foreign Currencies to Reserve Bank
4.8 Submission of Information about Principals by Authorised Dealers' Overseas Correspondents
4
AUTHORISED DEALERS' DEALINGS WITH RESERVE BANK
General
4.1 (i) Authorised dealers have recourse to Reserve Bank to sell/buy U.S. dollars to the extent the latter is prepared to transact in the currency at a given point of time.
(ii) Reserve Bank will buy/sell only U.S. dollar. It will not ordinarily buy/sell any other currency from/to authorised dealers.
(iii) Reserve Bank will quote its spot buying rate for US dollar to any authorised dealer who makes a specific request to Reserve Bank Dealing Room in the Department of External Investments & Operations (DEIO), Central Office, Mumbai. The rate quoted by the Dealing Room will hold good only for the specific transaction and is subject to change unless deal is concluded immediately.
NOTE: Funding of or absorbing excess liquidity in ACU dollar account is arranged by Reserve Bank in accordance with the procedure laid down in Memorandum ACM.
Settlement of Rupee Leg
4.2 The settlement of Rupee leg of the transactions can be effected at the request of authorised dealer at any of the Reserve Bank Offices (Deposit Accounts Department) at Ahmedabad, Bangalore, Calcutta, Chennai, Kanpur, Mumbai, Nagpur and New Delhi. While concluding the deal, the authorised dealer should clearly indicate the office of Reserve Bank at which settlement of the Rupee leg is desired.
Value Date
4.3 The contract for purchase/delivery of U.S. dollar will be entered into by Reserve Bank on days on which the dealing room (DEIO) of Reserve Bank is open for business. No transaction in foreign currency will be entered into by Reserve Bank on Saturdays. The value date for spot as well as forward delivery should be in conformity with the national and international practice in this regard.
Reporting of Transactions
4.4 All transactions with Reserve Bank should be reported in R Return. Form A2 need not be completed in respect of sale of foreign currency to Reserve Bank.
Minimum and Multiple Requirements
4.5 The purchase and sale of U.S. dollar will be made by Reserve Bank ordinarily in multiple of U.S.$ 500,000 with the minimum of U.S.$ 1 million.
Confirmation of Purchase/Sale
from/to Reserve Bank
4.6 Confirmation of the sale and purchase of U.S. dollar to/from the Reserve Bank may be sent immediately in the form RBM 1 and RBM 2 respectively to the Back-up Section of DEIO, Central Office, Reserve Bank of India, Mumbai. The confirmation may be sent by hand delivery, telex, or fax.
Payment of Rupee Value against Sale of
Foreign currencies to Reserve Bank
4.7 The payment of the rupee value will be made by the concerned office of Reserve Bank (cf. paragraph 4.2) to the current account of the authorised dealer on the appropriate value date without waiting for the credit intimation from Reserve Bank's overseas correspondent. If the foreign currency amount is not delivered to the overseas correspondent of Reserve Bank on the value date, interest will be charged at the Reserve Bank Rate on the rupee value credited to the account of the authorised dealer for the number of days of default. In order that the overdue interest may be recovered in such cases automatically by debit to their account with the concerned office of Reserve Bank, authorised dealers should lodge a suitable standing authority with Reserve Bank. Cases of undue delay will attract penalties, apart from overdue interest.
Submission of Information about Principals
by Authorised Dealers' Overseas Correspondents
4.8 Authorised dealers should leave standing instructions with their overseas correspondents to indicate clearly the name of the principal (i.e. the name of the Indian office/branch of the authorised dealer) on whose behalf the U.S. dollar amount is delivered to Reserve Bank's account with the Federal Reserve Bank of New York, New York.
Slip 3
[ AD/MA 40/1998]
Chapter 8
PART B REMITTANCES BY AIRLINE/SHIPPING
COMPANIES OR THEIR AGENTS
Airline/shipping companies and their agents are required to comply with the Exchange Control regulations laid down in Annexure III to this Chapter in the matter of acceptance of rupees/foreign currency in payment of cost of passages booked by them for journeys which are partly or wholly outside India or freight on goods exported from or imported into India or transhipped at Indian ports. Approvals for remittances of surplus collections of foreign airline/shipping companies (or their agents) and towards operating expenses by Indian airline/shipping companies are subject to adherence to these Guidelines.
Remittance of Surplus Passage/Freight
Collections by Foreign Airline Companies
8B.1 (i) Foreign airline companies operating in or through India are required to submit to Reserve Bank through their bankers monthly statement (in duplicate) of their passage and freight collections and disbursements made therefrom in form SPM 1duly signed by the Chief Executive in India of the airline in terms of paragraph 22 of the Guidelines (Annexure III). Applications for remittance of surplus passage fare and freight collections to the non-resident owners and operators of the foreign airline companies, as and when desired, should be made by their offices or agents in India to their bankers on form A2 along with the statement in form SPM 1 indicating, inter alia, the amount to be remitted. The concerned authorised dealer may allow the remittance of surplus funds provided the company has produced the necessary undertaking/certificate regarding payment of income-tax (cf. paragraph 3B.10). Before allowing the remittance, the bank should verify that the concerned airline has obtained the necessary permission from Reserve Bank under Section 29 of FERA 1973 for carrying on their commercial activity in India and also advise the concerned airline company that discrepant amounts noticed during the scrutiny of the statements by Reserve Bank or the amount remitted in excess of its entitlement should be brought to India immediately by the airline company concerned by inward remittance and no adjustment from other surplus funds held/future accretions, etc. would be permitted.
(ii) Likewise, foreign off-line carriers i.e. those airline companies which are not operating their services in or through India but are issuing their tickets and/or airway bills in India are required to submit to Reserve Bank through their bankers monthly statements (in duplicate) of their passage fare and freight collections and disbursements made therefrom in form SPM 1 duly signed by the Chief Executive in India of the airline or their General Sale Agents in India in terms of paragraph 22 of the Guidelines (Annexure III). Applications for remittance of surplus passage fare and freight collections should be made by their Offices or their Agents in India to their bankers on form A 2 alongwith the statement in form SPM 1, indicating, inter alia, the amount to be remitted. The authorised dealer may allow the remittance of passage fare/freight collections subject to the terms and conditions/documents prescribed in sub-paragraph (i) and after obtaining the following additional documents:
a) A certified copy of Reserve Bank's permission under Section 29 of FERA 1973.
b) Approval granted by the Director General of Civil Aviation, in original, for the flight/s (i.e. YA signals) concerned, if the collections reported are in respect of flight/s to/from India.
c) Undertaking/certificate regarding payment of income-tax (cf. paragraph 3B.10).
(iii) One copy of the statement in form SPM 1 should be forwarded by the authorised dealer to Reserve Bank after completing the certificate mentioned therein immediately after making the remittance along with the undertaking/certificate regarding payment of income-tax (cf. paragraph 3B.10). The statement should be submitted irrespective of whether remittance of surplus funds out of India is intended to be applied for or not.Authorised dealer should also specifically confirm on form A2 that the remittance has been made on the basis of airline's statement in form SPM 1 for the relevant month.
(iv) Authorised dealers should watch the regular receipt of the monthly statements from the airlines concerned who are maintaining rupee accounts with them and bring to the notice of Reserve Bank cases where the statements are not received by them for any particular month.
Remittance of Surplus Passage/Freight
Collections by Foreign Shipping companies
8B.2 (i) Foreign shipping companies/their agents in India are required to submit to Reserve Bank through their bankers voyage-wise statements (in duplicate) in form SPM 2 within 35 days from the date of sailing of the vessel, vide paragraph 23 of the Guidelines (Annexure III) irrespective of whether remittance of surplus funds out of India is intended to be applied for or not. Applications for remittance of surplus freight and passage fare collections due to non-resident ship owners and shipping companies operating to/from India may be made by their offices or local agents in India to their bankers on form A2 together with a copy of the statement in form SPM 2 and the documents mentioned therein. The concerned authorised dealer may allow the emittance after scrutinising the application in accordance with the Guidelines given in Annexure V and after satisfying that the remittable amount has been correctly arrived at with reference to the documents produced and provided that the company has submitted the necessary undertaking/certificate regarding payment of income-tax cf. paragraph 3 B.10). Detailed guidelines for scrutiny of applications received in form SPM 2 are given separately in Annexure V at the end of this Chapter. While permitting the remittance, the authorised dealer should also advise the agent that the discrepant amounts noticed during the scrutiny of the statements by Reserve Bank or the amount remitted in excess of its entitlement should be brought to India immediately by inward remittance from the overseas company concerned.
(ii) Authorised dealers should watch the receipt of the statements from the shipping companies/their agents concerned who are maintaining bank accounts with them for crediting the freight/passage collections. They should maintain a register for recording the particulars of SPM 2 statements received and remittances of surplus passage/freight collections allowed in form SRM.
(iii) Authorised dealers should also forward to Reserve Bank a monthly statement of remittances allowed in form SRM i.e. the form in which a register is maintained by them, after completing the certificate mentioned therein, alongwith copies of statements in form SPM 2 without its enclosures. The statement should be sent to Reserve Bank on or before 10th day of the succeeding month. The documents submitted by the applicants alongwith SPM 2 should be preserved for a period of one year from the date of remittance or till the date of acceptance of the transaction/s as in order by their internal auditors, whichever is later.
(iv) The local agents of the overseas Non Vessel Operating Common Carriers (NVOCCs) operating to/from India may approach the concerned Regional Office of Reserve Bank under whose jurisdiction the port of their activity falls for grant of general permission for remittance of surplus freight collections to their overseas principals, through a designated branch i.e. a branch of an authorised dealer with whom they are maintaining bank accounts styled as_____________________, A/c._____________
(Name of the Agent) (Name of the principal)
alongwith the following documents -
(i) Certificate of Incorporation, Memorandum and Articles of Association of the overseas company i.e. NVOCC.
(ii) Details of its membership of any P & I Club or any other organisation for marine cargo insurance and a copy of the receipt in respect of last premium/subscription paid to such club/organisation or copy of membership certificate.
(iii) Financial status certificate from the bankers of NVOCC.
Reserve Bank will grant general permission to the local agent to make the remittances through the designated branch. After the general permission has been granted by the Reserve Bank for the purpose, the designated branch of authorised dealer may allow the remittances of surplus freight collection to the principal NVOCC in accordance with the instructions contained in sub-paragraphs (i) to (iii) above.
(v) Foreign shipping companies operating feeder services to/from India or their agents in India and collecting freight/slot hire charges from Main Line Operators, Multimodal Transport Operators, NVOCCs or their agents should submit to Reserve Bank a voyagewise statement in form SPM 4 vide item (23A) of the Guidelines (Annexure III ). Applications for remittance of surplus collections due to non-resident owners and operators of feeder services operating in or through India should be made by their local offices or agents in India to their bankers on form A 2, citing a reference to the statement submitted directly to Reserve Bank. Such applications should be referred to Reserve Bank for approval.
Remittances by Multimodal Transport Operators (MTOs)
to their Overseas Agents
8B.3 (i) Multi Modal Transport Operators (MTOs) are allowed to issue a single document i.e. Multi-Modal Transport Document (MTD) which is a negotiable document.For purposes of handling the export cargo the MTOs appoint agents at the port of discharge/ trans-shipment for onward transport by ocean, rail, road and/or inland water ways. The MTOs desirous of making remittances to these agents towards the services rendered by them for on-carriage of the cargo may approach a designated branch of authorised dealer with agency agreement entered with the overseas agents togetherwith a copy of the registration certificate issued by the Director General of Shipping. The designated branch may allow the remittances towards commission and other charges payable to the overseas agents after verifying the following documents.
(a) Agency agreement indicating the rates of various items of work to be attended by him
(b) Full details of remittance applied for in form MTR
(c) Non-negotiable copy of multi-modal transport documents
(d) Invoices/debit notes from overseas agents indicating charges for the services rendered, and
(e) Undertaking/Certificate regarding payment of income-Tax (cf. paragraph 3B.10)
As a proof of on-carriage (POC), authorised dealers may call for Bill of Lading/Railway receipt/transport or lorry receipt togetherwith evidence of rates having been decided prior to shipment/ on-carriage. Authorised dealers should ensure with reference to registration certificate issued by the Director General of Shipping that the freight was collected during its validity period. In cases of freight pre-paid MTDs a declaration from exporter in form DIC may be obtained.
Note : Change in designated branch of an authorised dealer should be advised to Reserve Bank
ii) Remittance of lease rental of containers may be allowed by authorised dealers on the basis of approval of the Director General of Shipping to take the containers on lease, Lease Agreement, invoice of rental and a Chartered Accountant's certificate stating that the containers have been taken on the books of accounts of the leasee.
iii) Remittances towards cost of repairs may be allowed by authorised dealers to the overseas company which has carried out the repairs to the containers or to the overseas agents of the applicant towards reimbursement of the expenses incurred by them for carrying out the repairs after verifying the shipping documents to show that the containers have been taken abroad and an invoice from the overseas repairers.
iv) MTOs are sometimes required to arrange for return of empty containers from overseas ports to India or to any other port outside India. When the containers are being returned to India they should be received _on 'charges to collect ' basis. In case the empty containers are received on a foreign port, authorised dealers may allow remittances towards freight charges to overseas shipping companies or reimbursement to MTO's agents abroad, after verifying invoice from the company and service bill of lading indicating container number or copies of loading/discharge certificates from respective port authorities (please also see item 21B of Annexure III).
v) Authorised dealers should maintain a systematic record of the remittances allowed and related documents thereto and make them available to the internal auditors/Reserve Bank officials as and when called for.
Remittance of Insurance Premia by MTOs
8B.4 Authorised dealers may allow remittances towards insurance premia by the MTOs to the overseas through Transport Club (TT Club)/OTIM subject to verification of the original invoice from TT Club/OTIM and No Objection Certificate (NOC) from the General Insurance Corporation, in original.
Remittance of Break-Bulk Agents Remunerations on
Consolidation of Outward Sea/Air Cargo
8B.5 (i) Freight forwarders undertaking consolidation of out-bound cargo need services of break-bulk agents abroad. Sea cargo forwarders and IATA recognised Air cargo agents may approach a designated branch of an authorised dealer for remitting remuneration to break-bulk agents giving full particulars of the arrangements in form BBX 1 togetherwith a copy of the relative agency agreement. Authorised dealers may allow the remittance of remunerations to break-bulk agents on outward cargo on the basis of a Chartered Accountant's certificate to the effect that the amount of remittance applied for has been verified with reference to break-bulk gent's debit notes/invoices, copy of Master Air-Way Bill (MAWB)/Master Bill of Lading (MBL) and original relative House Air-Way Bill (HAWB)/House Bill of Lading (HBL), as the case may be. Before allowing the remittance authorised dealers may also obtain undertaking/certificate regarding payment of Income-tax (cf. paragraph 3B.10) and a statement in form BBX2.
NOTE: Application from Air Cargo Consolidators not recognised by IATA should be referred to Reserve Bank
(ii) Air/Sea cargo agents are also permitted to pay freight to airlines/shipping companies in rupees in respect of exports made on FOB basis and recover the freight amount from the overseas consignee through their break-bulk agent abroad provided they undertake to repatriate the same to India through normal banking channels within a period of 30 days in case of Air Cargo and 90 days in case of Sea Cargo from the date of shipment.
(iii) Authorised dealer may call for Chartered Accountant's Certificate in form CAS to determine outstanding receivables. In cases where the receivables from an overseas agent outstanding for more than 6 months exceed U.S. $ 2500 no remittance should be allowed without prior approval of Reserve Bank.
(iv) Authorised dealers should maintain systematic record of the remittances allowed togetherwith documents called for which should be made available to their internal auditors/Reserve Bank officials as and when called for.
Remittance of Freight Prepaid on Inward
Consolidation of Cargo by Air/Sea
8B.6 (i) While normally freight on goods imported as consolidated air/sea cargo is prepaid by overseas suppliers, in some cases overseas consolidators advance the freight abroad to the airline/shipping company on behalf of the Indian importer and the break-bulk agent in India is required to collect freight amount from the Indian importer and remit the same to the overseas consolidator. In such cases, Indian agents of overseas cargo consolidators desirous of making remittance are required to submit their agency agreements to a designated branch of an authorised dealer. The designated branch may allow the remittance on the basis of the agreement and statement in form BBI giving full details of inward shipments on `charges to collect' basis and a Chartered Accountant's certificate to the effect that the amount of remittance applied for has been verified with reference to copy of prepaid Master Air-Way Bill (MAWB)/Master Bill of Lading (MBL) together with the original relative House Air-Way Bill (HAWB)/House Bill of Lading (HBL) as also cargo manifests and invoices from overseas consolidators and has been found correct. Declaration from importers in form DIC regarding payment of freight on import may also be called for.
(ii) Authorised dealers may call for Chartered Accountant's certificate in form CAS to determine outstanding receivables. In cases where the receivables from the same overseas consolidators outstanding for more than 6 months exceed US $ 2500 no remittance should be allowed without prior approval of Reserve Bank.
(iii) Authorised dealers should maintain systematic record of the remittances allowed together with documents called for and should be made available to their internal auditors/Reserve Bank officials as and when called for.
Remittances towards cost of Euro Rail etc. passes/tickets,
Overseas hotel reservations, etc. for Indian travellers
8B.7 (i) Agents in India appointed by reputed overseas transport organisations for selling their passes/tickets for rail/road/water transportation abroad to persons resident in India undertaking visits to foreign countries, against payment in foreign exchange or in rupees, should apply to an authorised dealer for remittance of total cost thereof, net of commission payable to the Indian agent, to the overseas principal(s). The application should contain, inter alia, details such as name and address of the overseas transport organisation, country(ies)/areas covered, types of passes/tickets sold, rate of commission receivable etc. duly accompanied by a copy of the agency agreement(s) indicating the aforesaid particulars. Agents in India should designate a branch of an authorised dealer with which the collection of cost of passes/tickets sold against payment in rupee/foreign currency will be deposited and through which remittances of net amount i.e. amount collected less commission/mark up would be made to the foreign principal. The designated branch of authorised dealer may allow the remittance, subject to the compliance with the Guidelines given in Annexure IV.
(ii) Agents in India who have made tie up arrangements with overseas hotels/agents etc. for providing hotel accommodation to travellers undertaking visits from India should apply to the authorised dealer giving full details of the arrangements supported by a copy of the relevant agreement. Authorised dealer may allow the remittance of the actual cost of the hotel accommodation provided it is paid out of the foreign exchange drawn for visits abroad and subject to the compliance with the Guidelines in Annexure IV. In case such agents desire to open foreign currency account for depositing collections made in foreign exchange, these agents will be permitted by Reserve Bank on application to collect payments in foreign currency from the travellers and deposit the same in foreign currency accounts opened with the designated branches of authorised dealers i.e. their bankers in India and remit the amounts so collected to their principals after deduction of their commission/mark up. Application for opening of foreign currency account for the purpose may be made by such agents to the Reserve Bank with full particulars.
Remittances on account of Consolidated Tour Arrangements
for Foreign Tourists Visiting Neighbouring Countries
8B.8 (i) Travel agents are not permitted to incur any expenditure in India on behalf of foreign tourists arriving in India through their agency unless they have received advance remittance or have made arrangements to obtain reimbursement through an authorised dealer in an approved manner. In respect of consolidated tours arranged by travel agents for foreign tourists visiting India and neighbouring countries like Nepal, Bangladesh, Sri Lanka, etc. part of the foreign exchange received in India against such consolidated tour arrangements will have to be remitted from India to those countries for services rendered by travel agents and hoteliers in the neighbouring countries. Travel agents may apply to authorised dealers for such remittances on form A2 together with a statement in form CTA duly supported by documents mentioned therein. Authorised dealers should verify the following:
(a) Supporting debit notes/bills/invoices (in original) from the hotel/travel agent in the foreign country and the bank certificates relate to the same tourist group or family to which the statement relates.
(b) The neighbouring countries' share of tourism earnings appears prima facie reasonable on the basis of the duration of stay in the respective countries.
(c) Amount repatriated is supported by bank certificates (in original) confirming the receipt of foreign exchange in an approved manner (If the currency of remittance was rupees, the rupees should not have been derived from the non-convertible source).
(d) If the full amount of the tour price has not been repatriated,
(1) reasons therefor have been furnished and the undertaking on the form for repatriation of the balance has been completed
(2) at least 90 per cent of the tour price has been repatriated;
and
(3) amount to be remitted to the neighbouring country (inclusive of remittances, if any, already made against the tour) does not exceed the amount actually repatriated to India.
(e) Country of residence of beneficiary is not Pakistan
If the application for remittance satisfies the above requirements, authorised dealer may make the remittance and report it to Reserve Bank under the relative R Return, enclosing a copy of form CTA (after countersigning it) with the covering form A2. The supporting bank certificates should be retained by authorised dealer after noting therein the remittance made for future reference in case of need.
(ii) In all cases where the undertaking to repatriate the balance amount of tour price has been completed by the travel agent, authorised dealers should watch the submission of further bank certificates for the outstanding amount within the time limit of three months. If any part of the balance amount cannot be repatriated
due to reduction in tour price, disputes, etc. authorised dealer should verify appropriate documentary evidence such as correspondence between travel agent and the overseas tour operator, final settlement of account, etc. and satisfy himself that the tour account stood closed and no further amount was due to be repatriated.
(iii) Authorised dealers should promptly bring to the notice of Reserve Bank any cases where travel agents have not repatriated outstanding balances even after the expiry of the period of three months.
NOTE: Authorised dealers should permit remittances in terms of this paragraph only if the bank certificates show that the foreign exchange has been realised in India; in other words, in cases where the tour price has been settled by overseas tour operators by means of drafts drawn on banks outside India, the instruments should have been collected and proceeds realised before remittances to neighbouring countries can be permitted. As an exception to this rule, authorised dealers may permit remittances to Nepal even in advance of their realisation, provided the drawers/drawees of the drafts are well known banksand the drafts have been sent for collection through the medium of the same authorised dealers. The remittance to Nepal in such cases should be made by draft/mail transfer/TT drawn in favour of the Nepal Rastra Bank for account of the beneficiary. If in any case after remittance of the dues to Nepal, the payment on the draft is not realised, it should be reported promptly to Reserve Bank.
(iv) Applications not satisfying the requirements laid down in above paragraph (illustratively, cases where tour price has been settled through MCOs issued by airline companies, both Indian and foreign, and cases where less than 90 per cent of the price has been realised) as also all remittances to Pakistan will require specific approval of Reserve Bank.
Operating expenses of Indian Airline/Shipping Companies
8B.9 Indian Airline/shipping companies which are incorporated in and/or whose seat of control is in India may apply to authorised dealers for remittances towards operating expenses etc. in case balances in their foreign currency accounts are not sufficient to meet these expenses. Authorised dealer may allow remittance on the basis of invoices/debit notes received from overseas agents and in case of bunkers suppliers' invoice accompanied by master's confirmation for the bunkers supplied to the vessel. The invoice should contain full details i.e. Name of the Vessel/Aircraft, Voyage No. etc. Authorised dealers may ensure that balances in the foreign currency account are not sufficient to meet the expenditure and also that the shipping companies hold requisite authorisation from the Director General of Shipping for the particular voyage of the vessel or for its operations on foreign voyage in general. In case of application for remittance of Income-tax a demand note from the concerned Income-tax authorities may be called for.
Remittances towards Dry-docking, Repairs to
Ships, Survey fees and Purchases of Spares
8B.10 (i) Indian shipping companies are allowed to meet the expenditure of dry-docking, repairs to ships, payment of survey fees as also purchase of spares abroad from their foreign currency accounts permitted to be maintained by Reserve Bank [See paragraph 12.5(i)] or remit them from India through authorised dealers. Authorised dealers may allow remittances towards the aforesaid expenditure if application is submitted by the company on form A2 together with the documentary evidence such as invoice/bills etc. in support of the expenses incurred/to be incurred.
(ii) Application for remittance from India for other purposes such as solicitors fees or average adjustor's fees may be allowed by authorised dealers subject to the conditions mentioned in item V of Part B of Annexure I.
Remuneration to Agents Abroad appointed
by Indian Airline/Shipping Companies
8B.11 Indian airline/shipping companies are permitted to appoint agents at various overseas ports for looking after their interests and make payment of remuneration/commission and other charges actually incurred out of their freight/passage collections or out of balances held in their foreign currency accounts maintained abroad with the approval of Reserve Bank [cf. paragraph 12.1] provided the commission payable conform to the international trade practices/IATA regulations subject to a maximum of 5% of the freight collections abroad in the case of shipping companies and 15% of the passage/freight collections abroad in the case of airline companies made by the foreign agents on behalf of Indian principals. In case the freight/passage collections or balances in foreign currency at a particular place are insufficient, applications for remittance may be made by Indian airline/shipping companies to their bankers (authorised dealers), supported by documentary evidence. The authorised dealer may, on application, and subject to verification of the terms of the agency agreements entered into between the Indian airline/shipping company and its overseas agent and documentary evidence such as debit notes, details of passage fare/freight collected etc. allow the remittance of remuneration/commission to the overseas agents of Indian airline/shipping companies within the above ceilings. Copies of the documentary evidence verified should be submitted to Reserve Bank alongwith the relative form A2 while reporting the transaction in the R Returns for the relevant period.
Remittance of Charter Hire in respect of
Foreign Ships/Aircrafts on Voyage Charter basis
8B.12 (i) Authorised dealers may allow remittance of freight in respect of foreign ships engaged by Indian exporters/importers on `voyage charter basis' on the strength of charter party agreement, approval from Director General of Shipping [from TRANSCHART (Chartering Wing of Ministry of Surface Transport) in respect of public sector undertakings], invoices from shipowners/agents and undertaking/certificate regarding payment of Income-tax (cf. paragraph 3B.10). In case of import, Bill of Entry/Custom Certified invoices and in case of exports, on Board Bill of Lading may be called for.
NOTE : Authorised dealers should ensure that the vessel was engaged within the `laycan' time indicated, if any, in the DGS/TRANSCHART approvals.
(ii) Applications if any received for advance payment. before sailing of vessel in respect of export cargo and before arrival of vessel at Indian Port in respect of import cargo should be referred to Reserve Bank for prior approval in cases where the amount of remittance exceeds U.S.$ 15000/-.
(iii) Applications for remittance of demurrage charges on account of delay in loading/discharge of the cargo or non-availability of berth may be allowed by authorised dealers with reference to sale/purchase contract, charter party agreement showing rates of demurrage agreed to, duly approved by DGS/TRANSCHART. Authorised dealers may also call for survey report, worksheet for demurrage calculation, invoice from ship owners and also a certificate from port authority if the delay was on account of non-availability of berth.
(iv) Remittances in respect of charter hire of aircrafts (ad hoc flights) may be permitted by the authorised dealer at the centre at which the registered/Head Office of the charterer is situated on submission of an application for remittance in form A2 accompanied by invoice, copy of agreement/contract and after verifying the approval (i.e. YA signals) obtained from the Director General of Civil Aviation (DGCA) in original for such ad hoc flights and documentary evidence from Airport Authority to show the actual flight operation. The undertaking/certificate regarding payment of income-tax (cf. paragraph 3 B.10) should also be obtained before allowing the remittance. It should be ensured that the remittances are made by the charterers to the owners and not through any other airline, etc. in India.
v) Authorised dealers should maintain systematic record of the remittances allowed together with documents verified for verification by their internal auditors/Reserve Bank officials whichever is earlier.
NOTE : In case of import cargo on FOB/FAS terms and remittance being made to the shipowner belonging to the country having Double Taxation Avoidance Agreement with Government of India, annual No Objection Certificate valid as on the date of remittance may be accepted.
Remittance of Charter Hire in respect of foreign
ships chartered on Time Charter basis
8B.13 (i) Firms/companies desirous of engaging foreign flag vessels on `time charter basis' should (approach the office of Reserve Bank under whose jurisdiction their Head office/registered office is situated for approval of the arrangement through their bankers along with the following documents.
a) Purpose of engaging the vessel with details of estimated expenses, earnings, etc.
b) Approval in original (with a copy thereof) granted by DGS or TRANSCHART i.e. Chartering Wing of Ministry of Surface Transport in respect of Public Sector Undertakings (PSUs)] for engagement of the vessel.
c) Charter party agreement in original with a copy thereof.
d) Delivery certificate in original with a copy thereof, and
e) Survey report for bunkers on board the vessel for bunker adjustment, if any.
After obtaining the approval of Reserve Bank, the authorised dealer concerned may allow the remittance of the instalments of charter hire on submission of (a) Form A2 in duplicate,(b) copy of the charter party agreement, (c) the invoice from the ship owner duly certified for payment by the charterer as per charter party agreement and (d) undertaking/accountant's certificate for payment of income-tax.
Remittances of last such instalment wherein the adjustments towards bunkers, other eligible dues, if any, are involved, will be allowed by the authorised dealer on production of redelivery certificate supported by survey report, final accounts etc. by the charterer with details of adjustment(s).
ii) The details of charter hire remitted, freight earned and the expenses incurred on the vessel should be incorporated by the Indian Shipping Company engaging the vessel on time charter basis in the Statement SPG 4 which should be submitted to Reserve Bank through the authorised dealer through whom the remittance of charter hire is made.
iii) Sometimes Indian exporters/importers may engage foreign flag vessels on `time charter basis' for one time export/import of the goods. In such cases, authorised dealers may allow remittance of the charter hire after obtaining the following documents and scrutiny thereof in accordance with the terms of charter party agreement.
a) Approval in original, with a copy thereof, obtained from the Director General of Shipping or from TRANSCHART (i.e. chartering wing of Ministry of Surface Transport in respect of Public Sector Undertakings).
b) Charter party agreement in original duly signed by both the owner of the vessel and charterer with a copy thereof.
c) Freight Invoice.
d) Non-negotiable copy of Bill of Lading.
e) Undertaking/Accountant's certificate regarding payment of Income-tax (cf.paragraph 3B.10).
f) Delivery certificate with survey report for bunker.
The delivery of the vessel concerned should be in conformity with the approval granted by DGS/TRANSCHART.
iv) The remittance of bunker charges and other cargo related expenses at foreign ports in respect of the vessel engaged on time charter basis may be allowed in accordance with the provisions of paragraph 8B.9 by the authorised dealer through whom the remittance of charter hire of the vessel is made. Other expenses such as normal wages of crew and expenses for spare parts, insurance (other than cargo insurance) which are required to be borne by the owner of the vessel shall not be allowed by the authorised dealer unless there is a specific clause in the Charter Party Agreement for deduction of such payments from the charter hire.
NOTE: Applications in respect of aircraft chartered on 'time charter' basis should be referred to Reserve Bank
Remittance of Demurrage
8B.14 (i) Application for remittance of demurrage including demurrage in respect of FOB Exports and CIF/C&F imports may be allowed by authorised dealers subject to submission of the following documents :
a) Sale contract
b) Charter Party Agreement (to be insisted upon only in the cases when in the sale/purchase agreement there is a specific reference to Charter Party Agreement)
c) Notice of readiness
d) Lay time statement/statement of facts or
e) Survey report
f) Work sheet for demurrage calculation
g) Copy of Bill of Lading
h) Certified copy of bill of entry (in respect of imports)
i) Undertaking/certificate in respect of payment of Income-tax (cf. paragraph 3B.10).
(ii) In case of application for remittance of demurrage in respect of contracts on terms other than CIF exports or FOB/FAS imports by Central/State Governments, Government and Public Sector Undertakings and autonomous bodies, a No Objection Certificate from TRANSCHART (chartering wing of Ministry of Surface Transport) should be insisted upon before allowing any remittance.
Remittance of Freight in respect of vessels
chartered by Public Sector Undertakings (PSUs)
8B.15 (i) PSUs desirous of remitting approved percentage of freight in respect of voyage charter of vessels chartered by them on the basis of Fixture Note issued by TRANSCHART (chartering wing of Ministry of Surface Transport) pending submission of documents as per paragraph 8B.12 may approach their bankers with the original Fixture Note issued by TRANSCHART.
The authorised dealer may, after verifying original Fixture Note issued by TRANSCHART, allow remittance to the extent of percentage of freight indicated therein. The balance amount of freight including claims towards demurrage, if any, may be allowed by the same authorised dealer after obtaining and scrutinising the documents listed in paragraph 8B.12(i) and 8B.12(iii). The authorised dealer concerned should ensure that the application for the balance amount of freight alongwith the required documents are submitted to him within a period of forty five days from the date of making remittance of approved percentage of freight. Non-submission of the application/documents within stipulated period should immediately be brought to the notice of the concerned Regional Office of Reserve Bank.
(ii) A proper record of the remittance allowed and the documents verified should be kept by the authorised dealer for verification by their internal auditors/Reserve Bank officials.
Remittances towards Purchase of Ships/Aircraft
by Indian Airline/Shipping Companies
8B.16 (i) Purchase of ships/aircraft by Indian shipping/airline companies requires approval of Ministry of Surface Transport/Ministry of Civil Aviation, Government of India. Shipping/airline companies wishing to acquire ships/aircraft should, therefore, approach Government of India for permission. Purchase of ships/aircraft will generally require remittances towards advance/down payments, obtaining of foreign currency loans, issue of guarantees, etc. Applications for these purposes should be submitted to Reserve Bank by the shipping/airline company through an authorised dealer together with a certified copy of letter of approval issued by Government for acquisition of the ship/aircraft, certified copy of the contract, and other supporting documents.
(ii) In cases where purchase of ships/aircraft is to be made out of a foreign currency loan/credit, a certified copy of the foreign currency loan/credit agreement should also be forwarded indicating whether repayment of the loan/credit will be made out of surplus passage, freight collections or earnings retained abroad or by remittances made from India. In approved cases, Reserve Bank will permit the authorised dealer to issue bank guarantee and to effect remittances towards repayment of the loan, interest etc. where necessary. Reserve Bank will also allot a registration number to each foreign currency loan/suppliers' credit approved and advise it to the shipping/airline company while conveying its approval to the proposal. The registration number should invariably be quoted in all correspondence with the Reserve Bank regarding the loan/credit. The registration number should also be cited on form A2 covering remittances made or rupee transfers effected under the loan/credit arrangement. The procedure with regard to drawal, utilisation and repayment of loan/credit shall be the same as described in paragraphs 7 B.6 and 7 B.7. Authorised dealers and borrowers should ensure strict compliance with these provisions.
(iii) The import of aircraft, helicopters, ships and containers on financial lease basis will also be governed by the provisions contained in sub-paragraphs (i) and (ii) above.
Remittances to Foreign Courier Companies
8B.17 (i) Indian Courier Companies/firms enter into tie-up arrangements with their overseas counterparts for providing mutual assistance for delivery of parcels/documents. Courier companies may apply for No Objection to the tie-up to Regional Office of Reserve Bank through a designated branch of an authorised dealer with full details of the arrangement. Reserve Bank will authorise the designated branches of authorised dealers to allow remittances towards services/handling etc. charges. The designated branches of authorised dealers may allow the remittances for these services after obtaining duly filled in statement in form RCCtogether with a certificate from Chartered Accountant/Auditor that the amount applied for remittance has been checked with reference to invoices received from overseas company and invoices raised by the Indian company and applicable rates and the amount applied for remittance has been found correct. Authorised dealers may also obtain undertaking/certificate regarding payment of income-tax (cf. paragraph 3B.10).
(ii) Authorised dealers may call for Chartered Accountant's certificate giving details of all receivables from overseas counterparts. In cases where the receivables from the same overseas counterparty outstanding for more than 6 months exceed U.S.$ 2500 no remittance should be allowed without prior approval of Reserve Bank.
Submission of statements by Indian Shipping Companies
8B.18 Head Offices of Indian shipping companies operating ocean-going vessels should, in addition to the statement in form SPM 3 [see paragraph 24 of the Guidelines (Annexure III)], submit to Reserve Bank the following statements (in duplicate).
Description Periodicity Form
1. Statement of earnings and
disbursements at foreign and Indian
ports and net repatriation to India Quarterly SPG 1
2. Operations on foreign currency
account/s maintained Quarterly SPG 2
with overseas banks
3. Charter hire earnings and
disbursements of company's Quarterly SPG 3
vessels on Time/Voyage Charters
4. Foreign exchange receipts and
expenditure on Quarterly SPG 4
foreign vessels chartered
Chapter 14
PART A FOREIGN CURRENCY (NON-RESIDENT)
ACCOUNTS - [FCNR(A)]
4General
4 3
14A.1 In terms of Non-resident (External) Accounts Rules, 1970 (See Appendix II in Volume II) FCNR(A) accounts were opened and maintained by authorised dealers in India designated in certain foreign currencies. However, the Scheme was subsequently withdrawn with effect from 15th August 1994.
PART B FOREIGN CURRENCY (NON-RESIDENT)
ACCOUNTS (BANKS) SCHEME - [FCNR(B)]
General
4 3
14B.1 FCNR accounts under the scheme are opened and maintained in terms of Non-resident (External) Accounts Rules, 1970 (See Appendix II in Volume II). The provisions applicable to NRE accounts and detailed in paragraphs 13B.1 to 13B.16 apply, mutatis mutandis, to FCNR(B) accounts as well. The authorised dealers are allowed to accept deposits from NRIs and OCBs in such currencies as specified by Reserve Bank from time to time. At present, accounts are permitted to be maintained only in Pound Sterling, U.S.dollar, Deutsche Mark and Japanese Yen. The salient features of the scheme are as under :
(a) Reserve Bank will not provide exchange rate guarantee to banks for deposits of any maturity (under the Scheme.
(b) FCNR(B) accounts are permitted to be opened only in the form of term deposit. The deposits may be accepted for four maturity periods viz. six months and above but less than one year, one year and above but less than two years, two years and above but less than three years and three years only.
(c) In respect of liabilities representing amounts received under the scheme authorised dealers are required to comply with CRR/SLR requirements as laid down by Reserve Bank from time to time.
(d) Lending of resources mobilised under the Scheme will not be subject to any interest rate stipulations.
(e) Advances outstanding against the accounts under this Scheme will not be considered as part of net bank credit for the purpose of determining priority sector lending.
NOTES: A Authorised dealers may accept deposits under FCNR(B) accounts scheme with the facility of automatic reinvestment of interest as and when it accrues, provided the compounding of interest on the deposits, period of deposit, etc. are otherwise in conformity with directives issued by Reserve Bank from time to time and subject to guidelines issued by Indian Banks' Association/Foreign Exchange Dealers' Association of India in this regard.
B Premature withdrawal of NRE/FCNR(B) deposits for the purpose of opening NRNR Rupee Deposit accounts with a different authorised dealer will attract penalty as per the directions issued by Reserve Bank from time to time
Opening of and Utilisation of Funds in FCNR(B) Accounts
14B.2 (i) FCNR(B) term deposit accounts may be opened with funds remitted from abroad in convertible foreign currency through normal banking channel or funds received in rupees by debit to the VOSTRO accounts of non-resident banks or funds which are of repatriable nature in terms of general or special permission granted by Reserve Bank. The accounts under the Scheme may also be opened by transfer of funds from the existing NRE/FCNR accounts of the non-resident account-holders at the time of maturity or when prematurely withdrawn.
(ii) Instructions contained in paragraph 13B.21 to 13B.23 are applicable, mutatis mutandis, to FCNR(B) accounts also.
Mode of Remittance
14B.3 (i) Remittances from abroad for opening/crediting to FCNR(B) accounts would ordinarily be made only in the designated currency in which the account is desired to be opened/maintained. If, however, remittance is received in a currency other than the designated currency (including funds received in rupees by debit to the account of a non-resident bank) it will be converted into the latter currency by an authorised dealer at the risk and cost of the remitter and account opened/maintained in the designated currency.
ii) In case a customer with any convertible currency other than a designated currency desires to place a deposit under the Scheme, authorised dealers can undertake a fully covered swap in that currency against the desired designated currency with the depositor. There is no objection also for such a swap being done between two designated currencies.
Conversion of Rupees into Designated
Currencies and vice versa
14B.4 (i) Remittances received in Indian rupees for opening FCNR(B) accounts in conformity with paragraph 14B.2(i) should be converted by authorised dealers into the designated foreign currency at the clean T.T. selling rate for that currency ruling on the date of conversion.
(ii) Maturity proceeds of FCNR(B) accounts or premature withdrawal thereof for purpose of meeting local disbursements including investment requirements of account holder in India should be converted into rupees at the authorised dealer's clean T.T. buying rate for the relative currency ruling on the date of withdrawal.
Inland Movement of Funds
14B.5 Any inland movement of funds for the purpose of operating FCNR(B) Accounts as well as for repatriation abroad of balances held in FCNR(B) accounts will be free of inland exchange or commission for the non-resident depositors. Authorised dealers receiving foreign currency remittances under the Scheme will also on request pass on the foreign currency to another authorised dealer if FCNR(B) account has to be opened with the latter, at no extra cost to remitter.
Manner of Payment
of Interest
14B.6 (i) Interest on balances held in FCNR(B) accounts may be paid half-yearly or on an annual basis as desired by the depositor.
ii) Interest may be credited to a new FCNR(B) account or an existing/new NRE/NRO account in the name of the account holder, at his option.
Loans/overdrafts against
FCNR(B) deposits
14B.7 In case of loans/overdrafts against FCNR(B) deposits, the margin requirement shall be calculated on the rupee equivalent of the deposits at the prevailing notional rate of exchange for the relative currency.
Transfer of Funds held in
FCNR(B) Accounts
14B.8 Authorised dealers may allow transfer of funds held in FCNR(B) accounts of different persons maintained with themselves or with other authorised dealers for any purpose subject to the following conditions
(a) Authorised dealers should levy penalty if such transfer involves premature withdrawal of FCNR(B) deposits.
(b) Where the transfer of funds is by way of gift, it may be allowed after obtaining an undertaking from the transferee/transferee's bank that gift tax, if any, payable on the transfer of funds will be paid to the Income-tax authorities in India.
(c) In case of transfer of funds held in the FCNR(B) accounts held with different authorised dealers, the authorised dealer transferring the funds should issue a certificate confirming the non-resident status of the transferor and repatriable nature of funds.
FCNR(B) Deposits of NRIs
on Return to India
14B.9 The FCNR(B) deposits of persons of Indian nationality/origin who return to India for permanent settlement may be allowed to be continued till maturity at the contracted rate of interest, if desired. However, except the provisions relating to rate of interest and reserve requirements as applicable to FCNR(B) deposits, for all other purposes such deposits would be treated as resident deposits from the date of return of the accountholder to India. In case the FCNR(B) deposits are withdrawn before maturity, the directions issued in this regard by Reserve Bank including directions, if any, about levy of penalty would be applicable. Authorised dealers should convert the FCNR(B) deposits on maturity into resident rupee deposits accounts or RFC account (if eligible), at the option of the accountholder and interest on the new deposit (rupee account or RFC account) would be payable at the relevant rate applicable for such a deposit.
Statement of Inflow, Outflow and
Outstanding Deposits under FCNR
Accounts (Banks) Scheme
14B.1 Authorised dealers should submit a monthly statement for the bank as a whole, in form STAT 5 showing the inflow, outflow and outstanding deposits under the Foreign Currency (Non-Resident) Accounts (Banks) Scheme during the month, so as to reach the Reserve Bank before the 10th day of the month following that to which it relates.
PART C FOREIGN CURRENCY (ORDINARY - NON-REPATRIABLE)
DEPOSIT (FCONR) SCHEME
General
14C.1 Foreign Currency (Ordinary - Non-repatriable) Deposit (FCONR) Accounts in the names of non-residents denominated in U.S. dollar were allowed to be opened by authorised dealers out of funds transferred to India in an approved manner in convertible foreign currency from abroad or by transfer of funds from NRE/FCNR accounts. The Scheme was withdrawn with effect from 20th August 1994.
[AD/MA 40/1998]
Other Periodic Statements
16.9 Authorised dealers are required to submit to Reserve Bank the following periodic statements in terms of instructions contained in various Chapters of the Manual.
Description Manual paragraph Form Periodicity
1. Special Report on Rupee dealings
with overseas banks 5A.16 RRD Monthly
2. Statement of positions of 5B.1(ii) POS Weekly
authorised dealers
3. Statement regarding maturity
of position 5B.1(iii) MAP Monthly
4. Statement of foreign currency 5B.2(ii) BAL Monthly balances of authorised dealers and
rupee balances of non-resident banks
5. Statement showing the position 5B.2(iv) REC Half
of unreconciled entries in foreign Yearly
currency accounts abroad
6. Statement regarding interest 5B.9(iii) SIR Quarterly
rates sensitivity
7. Statement of particulars of 6C.12(ii) XOS Half outstanding export bills yearly
8. Export bills allowed to be 6C.14(ii) EBW Half written off Yearly
9. Statement showing details of imports7A.20(v) BEF Quarterly for which documentary evidence of import
has not been received from importers
10. Statement of permission granted for 9B.1(iii) ORA Monthly
opening of trading/non-trading offices/
posting of representative abroad
11. Statement of purchases/sales of 10B.4(ii) LEC(FII) Daily
shares/debentures made on behalf
of FIIs under Portfolio
Investment Scheme
12. Statement of purchases/sales of 10C.23(i) LEC(NRI) Daily shares/debentures made on
behalf of NRIs/OCBs under
Portfolio Investment Scheme
13. Statement showing remittance of 10C.24A(iii) CIR Half-
income/interest to NRIs/OCBs on Yearly
investments/deposits held on
non-repatriation basis
14. Statement regarding sale through 10C.27(iii) DSP Quarterly
stock exchange/s of shares/
bonds/debentures by authorised
dealers acquired by NRIs/OCBs
under the Direct Investment
Schemes
15. Statement of operations on 11B.5(e) DBS Monthly
Diplomatic Bond Stores Accounts
16. Statement of operations on 13B.25 STAT 1 Monthly
Non-resident(External) Rupee
Accounts
17. Summary of operations on 13D.6 and 8 STAT 2 Annual
Blocked accounts
18. Deposits under Foreign Currency Deleted STAT 3 -
(Non-resident) Accounts Scheme
19. Summary of operations on Deleted STAT 4 -
Foreign Currency (Non-resident)
Accounts
20. Statement showing inflow and outflow14B.10 STAT 5 Monthly
of deposits under Foreign Currency
(Non-resident - Banks Scheme) [FCNR(B)]
Accounts
21. Statement of earnings from 16.7 STAT 6 Quarterly
Tourism
22. Summary statement of operations 14D.10 STAT 7 Quarterly
in EEFC accounts
23. Statement showing details of NRE 13B.25 STAT 8 Monthly
Accounts
24. Statement Showing details of NRNR 13C.6 STAT 9 Monthly
Accounts
25. Statement showing details of RFC 14E.10 STAT 10 Monthly
Accounts
26. Statement showing turnover of 16.8 FXT Annual
foreign exchange business of
authorised dealer
Presented by eximkey.com