RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
October 23, 1999 A.D. (M.A. Series) Circular No.31
To,
All Authorised dealers in foreign exchange
Dear Sirs,
Amendments to Exchange Control Manual (ECM) and Memorandum LIM
It has been decided to amend/modify the Exchange Control regulations as stated in the following paragraphs.
1. SIR and MAP Statements
In terms of paragraphs 5B.1(iii) and 5B.9(iii) of ECM, Head/Principal offices of authorised dealers are required to submit monthly statement in form MAP and quarterly statement in form SIR respectively, to the Central Office of Exchange Control Department at Mumbai. With introduction of Second Tranche of DBS Returns in terms of Department of Banking Supervision circular DBS. BC. No. OSMOS/ Circ.2/ 33.01.001/15/98-99 dated 17th July, 1999 authorised dealers are required to submit SIR and MAP statements to that Department. In view of this, submission of statements in form MAP and SIR to Exchange Control Department has been dispensed with.
2. Export of Foreign Exchange
Attention of authorised dealers is drawn to paragraph 6G.3(ii) of ECM and Reserve Bank Notification No.F.E.R.A.192/99-RB dated 9th March 1999 in terms of which persons bringing in foreign exchange in the form of foreign currency bank notes and travellers cheques are required to declare them to the Customs authorities, on arrival in India, on Currency Declaration Form (CDF), if the aggregate value thereof exceeds U.S.$ 10,000 or its equivalent and/or the value of currency notes exceeds U.S.$ 5,000 or its equivalent. Reserve Bank vide its Notification No.F.E.R.A.210/99-RB dated 27th September 1999 (copy enclosed) has amended its Notification No.FERA.80/89-RB dated 9th August 1989 permitting a person in India but not resident therein to take out of India unspent foreign exchange not exceeding the amount brought in by him provided, (i) he had, on arrival in India, declared the amount of foreign exchange being taken out to the Customs authorities in form CDF, or (ii) the amount being taken out of India in foreign exchange is less than the amount specified by the Reserve Bank from time to time, for which a declaration in form CDF is required to be made at the time of arrival in India to the Customs authorities.
3. Other Sundry Remittances
In terms of item XV of Part B of Annexure I to Chapter 8 of ECM, authorised dealers are permitted to allow certain sundry remittances on production of appropriate documentary evidence. With a view to facilitating Indian manufacturers to acquire prototypes developed abroad, authorised dealers have now been permitted to allow remittances for development of such prototypes. The prototypes should, however, be permissible for import into India under the current Exim Policy. The Advance remittance, if any, shall be subject to the provisions of paragraph 8C.10 of ECM.
4. Credits to QA 22 accounts
In terms of provisions contained in paragraph 11A.2(vi) and paragraph 11B.2(ii) of ECM, authorised dealers are permitted to credit refunds/claims received from Government departments, municipal authorities, insurance companies, refund of security deposits on termination of lease etc. to QA 22 accounts provided they are satisfied, with reference to documentary evidence, that the original payments relating to the transactions were made from the QA 22 accounts. It has now been decided that authorised dealers need not insist on documentary evidence if the amount of credit of such refunds/claims does not exceed Rs.10,000.
5. Amendments to Part G of LIM - Submission of statements to Reserve Bank
In terms of paragraphs G.1 and G.2 of the Memorandum of Exchange Control Regulations relating to life insurance in India (LIM), the Central Office/Divisional Offices of Life Insurance Corporation (LIC) are required to submit certain statements to offices of Reserve Bank. On a review, it has been decided that henceforth only LIM 1-application form for receiving premium/settlement of claims in foreign currency and LIM 4-statement giving details of purchases/sales/redemptions of foreign currency shares/securities and other investments may be submitted to Reserve Bank. The submission of other statements i.e. LIM 2, LIM 3, LIM 5, LIM 6 and LIM 7 has been dispensed with.
6. The following consequential amendments may be carried out in the Exchange Control Manual and Memorandum LIM.
Exchange Control Manual:
Volume I
(i) Paragraphs 5B.1(iii) and 5B.9(iii) may be deleted.
(ii) Paragraph 6G.3(ii) may be replaced by Slip1.
(iii) A new sub-item (vii) may be included under Item XV of Part B of Annexure I to Chapter 8 as per Slip 2.
(iv) A Note may be added at the end of paragraph 11A.2(vi) as per Slip 3.
(v) A Note may be added at the end of paragraph 11B.2(ii) as per Slip 4.
Volume II
(vi) The existing Notification No. F.E.R.A.80/89-RB dated 9th August 1989 under Section 13 may be replaced by Slip 5.
(vii) Forms SIR and MAP may be deleted.
Memorandum LIM
(viii) Part G of LIM may be replaced by Slip 6.
(ix) The existing forms LIM2, LIM3, LIM5, LIM6 and LIM7 may be cancelled and form LIM4 may be renumbered as LIM2.
7. Authorised dealers may bring the contents of this circular to the notice of their concerned constituents.
8. 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
RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
Notification No. F.E.R.A.210 /99-RB dated September 27, 1999
In pursuance of sub-section (2) of Section 13 of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and in partial modification of its Notification No. FERA 80/89-RB dated 9th August 1989, the Reserve Bank of India hereby directs that the said Notification shall be amended with immediate effect, in the following manner, namely;
In the said Notification, the existing clause (iv) shall be substituted by the following clause –
“ (iv) to permit any person in India but not resident therein to take out of India an amount of foreign exchange not exceeding the amount brought in by him in foreign exchange; provided that –
(a) he had made, on arrival in India, a declaration to customs authorities in such form as specified by the Reserve Bank in this behalf, of the amount of foreign exchange sought to be taken,
or
(b) the amount sought to be taken out in foreign exchange is less than the amount specified by the Reserve Bank from time to time, for which a declaration is required to be made to customs authorities."
Sd/-
[ Khizer Ahmed ]
Executive Director
Slip1
[AD/MA/ 31 /1999]
Export of Foreign Exchange
6G.3
(ii) A person in India but not resident therein will be permitted by Customs to take out his unspent foreign currency provided (i) the amount being taken out does not exceed the amount that he had declared to the Customs authorities, in form CDF, on arrival in India, or (ii) the amount being taken out of India in foreign exchange is less than the amount specified by the Reserve Bank from time to time for which a declaration in form CDF is required to be made at the time of arrival in India to the Customs authorities.
Slip 2
[AD/MA/ 31/1999]
Other Sundry Remittances
Type of remittance Documentary evidence
vii)Remittance for import of Prototypes developed abroad Invoice from the overseas company with a copy of agreement/correspondence exchanged
NOTE:
The import of prototype should be in conformity with the current Exim Policy. Advance remittance, if any, shall be subject to the provisions of paragraph 8C.10 of ECM.
Slip 3
[AD/MA/ 31 /1999]
11A.2 (vi)
NOTE:
Authorised dealers need not insist on documentary evidence if the amount of credit of refund/claim to QA 22 account does not exceed Rs.10,000.
Slip 4
[AD/MA/ 31 /1999]
11B.2 (ii)
NOTE:
Authorised dealers need not insist on documentary evidence if the amount of credit of refund/claim to QA 22 account does not exceed Rs.10,000.
Slip 6
[AD/MA/ 31 /1999]
PART G - SUBMISSION OF STATEMENTS TO RESERVE BANK
Statements to be submitted by LIC
The Head Office/Divisional Offices of LIC may submit the following statement to the office of Reserve Bank, under which they function:-
LIM-2:
Half yearly statement, giving summary of purchases/sales/redemptions of foreign currency shares/securities and other investments. This statement is to be submitted before the end of the month following the period to which the statement relates.
NOTE:
LIM-1 is an application form for receiving premium/settlement of claims in foreign currency, on a case to case basis.
Slip 5
[AD/MA/ 31 /1999]
Notification No. F.E.R.A.80/89-RB dated 9th August, 1989 as amended up to 27th September 1999
Export of Foreign Exchange and Indian Currency
In pursuance of sub-section (2) of Section 13 of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and in supersession of the Notification of the Reserve Bank of India No. F.E.R.A.10/74-RB dated 1st January, 1974 as amended from time to time, the Reserve Bank is pleased -
i) to permit any person resident in India to take outside India (other than to Nepal) currency notes of the Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.1000/-per person at any one time,
ii) to permit any person to take or send out of India to Nepal, currency notes of Government of India and Reserve Bank of India notes (other than notes of the denominations of above Rs.100/- in either case) and Indian coins or other notes or coins which are the currency of Nepal,
iii) to permit currency in the safes of vessels or aircraft which has been brought into India or which has been taken on board a vessel or aircraft with the permission of the Reserve Bank to be taken out of India,
iv) to permit any person in India but not resident therein to take out of India an amount of foreign exchange not exceeding the amount brought in by him in foreign exchange; provided that -
(a) he had made, on arrival in India, a declaration to the customs authorities, in such form as specified by the Reserve Bank in this behalf, of the amount of foreign exchange sought to be taken,
or
(b) the amount sought to be taken out in foreign exchange is less than the amount specified by the Reserve Bank from time to time, for which a declaration is required to be made to customs authorities.
v) to permit any person in, or resident in India, to take out of India foreign currency or currencies equivalent to two thousand U.S.dollars held by such person in terms of item (9) to the proviso to the Central Government Notification No.GSR 679(E) [F/10/22/90-NRI Cell] dated 17th July 1992.
vi) to permit any person resident in India to take out of India, unspent foreign exchange brought back by him to India while returning from his previous visit abroad and retained in accordance with the Reserve Bank's Notification No. F.E.R.A.172/97-RB dated February 24, 1997
(a) in the form of notes and coins, within a period not exceeding 90 days from the date of his return:
(b) in the form of travellers cheques within a period not exceeding 180 days from the date of his return.
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