Notification No. FEMA 29/2000-RB, dated 26th September, 2000

Payment to person resident outside India on invocation of guarantee
In pursuance of the provisions of Section 3 of the Foreign Exchange Management Act, 1999 (42 of 1999), and in partial modification of its Notification No. FEMA 16/2000-RB, dated 3rd May 2000, (hereinafter referred to as ‘the said Notification’), the Reserve Bank hereby directs that the said Notification shall with immediate effect be amended as under, namely :-

After paragraph (2) of the said Notification, the following paragraph shall be added, namely:-"(2A) a person resident in India being the principal debtor, to make payment to a person resident outside India being a guarantor, such payment being by way of reimbursement of the payment made to the resident creditor by the non-resident guarantor under the guarantee furnished by him on behalf of the principal debtor;

Provided that the amount payable by way of reimbursement by the resident principal debtor shall not exceed the rupee equivalent of the amount paid by the non-resident guarantor under the guarantee."

Sd/-
D.P. SARDA
(Executive Director)

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