RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
A.D.(M.A. Series) Circular No.26 August 30, 1999
To
All Authorised Dealers in Foreign Exchange
Dear Sirs,
Release of Exchange to Students for Studies Abroad
With a view to simplifying the procedure for release of exchange to students for studies abroad it has been decided to amend /modify the Exchange Control regulations as set out in following paragraphs.
1. Sale of Exchange
In terms of paragraph 8A.1 (i) (c) of Exchange Control Manual (ECM) authorised dealers are required to ensure that the traveller holds a ticket for a journey commencing not later than sixty days from the date of sale of foreign exchange. In case of students since the date of commencement of course is indicated in the letter of admission from the overseas educational institution, it has been decided that authorised dealers need not insist on journey ticket, while releasing exchange to students.
2. Quantum of Exchange
In terms of item (e) under caption "Quantum of Exchange" of item XVI of Part A of Annexure I to Chapter 8 of ECM authorised dealers have been advised to release exchange for studies abroad in the form of currency notes not exceeding U.S.$ 500 and in the form of travellers’ cheques not exceeding U.S.$ 1,500. It has now been decided that it would be in order for authorised dealers to release exchange in the form of currency notes not exceeding U.S.$ 500 and balance amount in the form of Draft/T.T./Travellers’ Cheques in the name of the student/educational institution as desired by the applicant.
3. Maintenance of Records, Files etc.
Attention is drawn to the provisions under the caption "Maintenance of Records, files etc." of item XVI of Part A of Annexure I to Chapter 8 of ECM advising authorised dealers to preserve the case papers relating to release of exchange to students for studies abroad duly indexed in student-wise folders/files to facilitate reference for exchange release for subsequent period and also for the purposes of internal audit/ inspection. This has given an impression that the student is required to avail of exchange facilities for the entire duration of the course from the same branch of authorised dealer. Accordingly, when a student approaches an authorised dealer/branch other than the one from where he had earlier availed of exchange facility, he is advised to approach the same authorised dealer which had released exchange to him earlier. It is clarified that once applicant/student has given an undertaking in form TRS that under no circumstances he will draw exchange exceeding his eligibility, he is free to approach any authorised dealer to draw exchange, as per his convenience.
4. Manner of Payment of Rupees against sale of Foreign Exchange
In terms of paragraph 3B.5 (iii) of ECM where the rupee equivalent for drawing foreign exchange exceeds Rs.50,000 either for any single instalment or for more than one instalment reckoned together for a single journey/visit it should be paid by the traveller by means of a crossed cheque/demand draft/ pay order. On a review it has been decided that in case of release of exchange to students going abroad for studies, authorised dealers should insist on payment being received by a Demand Draft/ Pay Order/ crossed cheque drawn on the applicant’s bank account, only where drawal of exchange for individual transaction is equivalent to Rs.50,000 or more.
5. Following consequential amendments may be carried out in the Exchange Control Manual:
Volume I
(i) At the end of item (iii) in paragraph 3B.5 a Note (ii) may be added as per Slip 1 after the existing note which may be numbered as Note (i).
(ii) In paragraph 8A.1(i) item (c) may be substituted by Slip 2.
(iii) Item XVI of Part A of Annexure I to Chapter 8 may be substituted by Slip 3.
Volume II
(iv) Form TRS may be substituted by Slip 4.
5. Authorised dealers may bring contents of this circular to the notice of their constituents concerned.
6. 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 penalties prescribed under the Act.
Yours faithfully,
B. MAHESHWARAN
Chief General Manager
Slip 1
[AD/MA/ 26 /1999]
Manner of Payment of Rupees against Sale of Foreign Exchange
3B.5 (iii)
Note:
(ii)Where the rupee equivalent of foreign exchange drawn, in a single transaction for studies abroad is Rs.50,000 or more it should be paid by means of a crossed cheque/demand draft/pay order as stated above.
Slip 2
[AD/MA/ 26 /1999]
Sale of Exchange
8A.1(i)
(c) The ticket held by the traveller has been issued for a journey commencing not later than sixty days from the date of sale of foreign exchange (not applicable in case of students going abroad for studies).
Slip 3
[AD/MA / 26 /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.
C. It is not necessary that full exchange entitlement for the entire year or duration of the course is drawn from the same authorised dealer. Students are free to draw part of their foreign exchange entitlement from one authorised dealer and part from another .
D. Deposit towards advance tuition fees/maintenance may be remitted if insisted upon by the overseas institution. Authorised dealer should obtain an undertaking from the student that in the event of his/her not joining the course he would obtain the admissible refund and repatriate it to India.
Duration of Course :
The actual duration of the course.
Quantum of exchange :
(a) 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.
(b) 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.
(c) In 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.
(d) Exchange may be released for a period not exceeding one year at a time.
(e) Exchange may be released in the form of currency notes not exceeding U.S.$ 500 and balance amount may be released in the form of travellers’ cheques/draft/T.T. in favour of the student or the educational institution, 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 for the purpose of internal audit/inspection.
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