nri account maintinance

8/4/2019 Nri Account Maintinance

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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY



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³NRI ACCOUNT MAINTINANCE´

SUBMITTED IN FULFILLMENT OF SUMMER INTERNSHIP

UNDER GUIDANCE OF

Ms. Mandeep kaur Randhawa

FOREX DEPARTMENT STANDARD CHARTERED BANK

SUBMITTED BY: -

RAHUL SHARMA

PGD-FM/10/028

Amplify Mindware-DITM

BHARATI VIDYAPEETH UNIVERSITY, PUNE



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Acknowledgement to the company

The opportunity to get practical training in a reputed organization fulfills the felt gap

between the theory and practical. In the case of a student of PGD-FM this aspect assumes

an additional dimension

I hereby acknowledge Standard Chartered Bank for providing the constant

guidance for encouragement which helped me a lot to be successful in my efforts. This

formal acknowledgement will hardly be sufficient to express my deep sense of gratitude to

all of them. It was a memorable experience while doing my project at Bank of Baroda,

G haziabad .

I am highly indebted and thankful to Ms.Mandeep kaur randhawa for theirguidance and

encouragement, without which the satisfactory completion of this project would not had been

possible. They were a constant source of inspiration to me, showing all the patience and

abundant encouragement throughout the project duration.

Acknowledgement couldn¶t end without expressing my gratitude towards

Mr.NIRMALENDU MISHRA (Branch Manager) who was instrumental in timely

completion of the project.

Words fall short in expressing my sincere regards towards the members of HR-

department of STANDARD CHARTERED BANK Office, New Delhi for their expert advice

and invaluable suggestions.

Lastly thanks to teacher and colleagues who directly or indirectly helped me in

procurement of my goal.

In all STANDARD CHARTERED BANK provided a wonderful simulating

environment for this very educative and instructive training.

(RAHUL SHARMA)



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Acknowledgement to the Faculty

Amplify Mindware-DITM

BHARATI VIDYAPEETH UNIVERSITY, PUNE

It is high privilege for me to express my deep sense of gratitude to all

those faculty members who helped me in the completion of the project,

especially Mr. N. Hariharan HOD- Department of Finance who was always

there at hour of need.

Last but not the least my special thanks to the faculty of Amplify Mindware-

DITM, BHARATI VIDYAPEETH UNIVERSITY, PUNE for their kind cooperation and

providing me with all the necessary documents needed and guidance during the

time period of project completion.

(RAHUL SHARMA)



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DECLARATION

This is the report of the project work entitled ³QUALITY EXPORT CREDIT ́ undertaken

by me during the two month training at STANDARD CHARTERED BANK , PREET

VIHAR, DELHI.

I hereby declare that project report is being submitted by me for fulfillment of Summer Internship

under PGD-FM. A copy of this project has been submitted to the organization where the project was

developed. This project is not submitted to any other organization or university or college and is the

outcome of my work.

(RAHUL SHARMA)



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INDEX

Sr. No. Contents Pg. No.

1 Company Profile 6

2 Nri account 16

3 Types of account 20

4 R emittance 23

5 Types of remittances with documents 28

6 Forms requires for Nri account 38

7 Facilities provided for Nri customer 45

8 Export Post Shipment Finance 52

9 Forfeiting and Factoring 57

10 Export Bank Guarantees 61

11 Credit Risk in Export Business 65

12 Currency Risk in Export International Trade 68

13 Export Statistics- By Government of India 73

14 Limitations 77

15 Bibliography 78



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INTRODUCTION

Standard Chartered PLC

It is a multinational financial services company headquartered in London, United Kingdom with

operations in more than seventy countries. It operates a network of over 1,700 branches andoutlets (including subsidiaries, associates and joint ventures) and employs around 80,000 people.

It is a universal bank and has operations in consumer, corporate and institutional banking andtreasury services. Despite its British base around 90% of its profits come from Africa, Asia andthe Middle East.

Standard Chartered has its primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has secondary listings on the Hong Kong Stock Exchange and the IndianStock Exchanges. Its largest shareholder is the Government of Singapore-owned Temasek Holdings.

History

The name Standard Chartered comes from the two original banks from which it was founded and

which merged in 1969 ± The Chartered Bank of India, Australia and China, and The Standard

Bank of British South Africa.

Chartered Bank

The Chartered Bank was founded by Scotsman James Wilson following the grant of a RoyalCharter by Queen Victoria in 1853. Chartered opened its first branches in Mumbai, Kolkata andShanghai in 1858, followed by Hong Kong and Singapore in 1859. The Bank started issuing banknotes of the Hong Kong dollar in 1862. With the opening of the Suez Canal in 1869 and theextension of the telegraph to China in 1871, Chartered was well placed to expand and develop its business.

Standard Bank



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The Standard Bank was a British bank founded in the Cape Province of South Africa in 1862 byanother Scotsman, John Paterson. Having established a considerable number of branches,Standard was prominent in financing the development of the diamond fields of Kimberley from1867 and later extended its network further north to the new town of Johannesburg when goldwas discovered there in 1885. Half the output of the second largest gold field in the world passed

through The Standard Bank on its way to London.

Standard expanded widely in Africa over the years, but from 1883 to 1962 was formally knownas the Standard Bank of South Africa. In 1962 the bank changed its name to Standard Bank Limited, and the South African operations were formed into a separate subsidiary which took the parent bank's previous name, Standard Bank of South Africa Ltd.

21st century

Standard Chartered footprint (some countries only have wholesale banking from SCB)

In 2000, Standard Chartered acquired Grindlays Bank from ANZ Bank, increasing its presencein private banking and further expanding its operations in India and Pakistan. Standard Charteredretained Grindlays' private banking operations in London and Luxembourg and the subsidiary inJersey, all of which it integrated into its own private bank. This now serves high net worthcustomers in Hong Kong, Dubai, and Johannesburg under the name Standard CharteredGrindlays Offshore Financial Services. In India, Standard Chartered integrated most of Grindlays' operations, making Standard Chartered the largest foreign bank in the country.

In 2004, Standard Chartered Bank and Astra International (An Indonesian conglomerate, a

subsidiary of Jardine Matheson Group) took over PermataBank and in 2006, both shareholdersincreased their joint ownership to 89.01%. With 276 branches and 549 ATMs in 55 citiesthroughout Indonesia, PermataBank has the second largest branch network in Standard Charteredorganization.

On 15 April 2005, the bank acquired Korea First Bank, beating HSBC in the bid. Since then the bank has rebranded the branches as SC First Bank.

Standard Chartered completed the integration of its Bangkok branch and Standard Chartered Nakornthon Bank in October, renaming the new entity Standard Chartered Bank (Thailand).Standard Chartered also formed strategic alliances with Fleming Family & Partners to expand

private wealth management in Asia and the Middle East, and acquired stakes in ACB Vietnam,Travelex, American Express Bank in Bangladesh and Bohai Bank in China.

Standard Chartered Bank China in Guangzhou Tianhe.



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On 9 August 2006 Standard Chartered announced that it had acquired an 81% shareholding inthe Union Bank of Pakistan in a deal ultimately worth $511 million. This deal represented thefirst acquisition by a foreign firm of a Pakistani bank and the merged bank, Standard CharteredBank (Pakistan), is now Pakistan's sixth largest bank.

On 22 October 2006 Standard Chartered announced that it had received tenders for more than 51 per cent of the issued share capital of Hsinchu International Bank (³Hsinchu´), established in1948 in Hsinchu city in Taiwan. Standard Chartered, which had first entered Taiwan in 1985,acquired majority ownership of the bank. Prior to the merger, Hsinchu was Taiwan's seventhlargest private sector bank by loans and deposits as at 30 June 2006, but had suffered extensivelosses on defaulted credit card debt. Standard Chartered merged its existing three branches withHsinchu's 83, and then delisted Hsinchu International Bank, changing the bank's name toStandard Chartered Bank (Taiwan) Limited. Today Standard Chartered is the largest foreign bank in Taiwan in terms of branch network.

In 2007, Standard Chartered opened its Private Banking global headquarters in Singapore. On 23

August 2007 Standard Chartered entered into an agreement to buy a 49 percent share of anIndian brokerage firm (UTI Securities) for $36 million in cash from Securities TradingCorporation of India Ltd., with the option to raise its stake to 75 percent in 2008 and, if both partners agree, to 100 percent by 2010. UTI Securities offers brokering, wealth management andinvestment banking services across 60 Indian cities.

On 29 February 2008, Standard Chartered PLC announced it had received all the requiredapprovals leading to the completion of its acquisition of American Express Bank Ltd (AEB)from the American Express Company (AXP). The total cash consideration for the acquisition isUS$823 million.

Standard Chartered Bank Building in Hong Kong

On 13 November 2008, Standard Chartered PLC announces that its subsidiary, StandardChartered Bank (Hong Kong) Limited, has entered into an agreement to acquire 100 per cent of Cazenove Asia Limited, a leading Asian equity capital markets, corporate finance andinstitutional brokerage business, from JPMorgan Cazenove.

On 12 September 2009, The Times newspaper in the United Kingdom reported that StandardChartered had signed a record equaling £20million a season sponsorship deal with Liverpool FCto commence at the start of the 2010/11 Premier League season and last for four years, in a dealequally the record amount set by Manchester United's sponsorship deal with insurance giantAon. Liverpool football club announced on the club's official website on 14 September 2009 thatStandard Chartered bank will be the new shirt sponsor starting from 1 July 2010 to 2014, endingtheir 18-year sponsorship by Carlsberg Group.

On 27 November 2009, Dow Jones Financial News reported the city of Dubai will restructure itslargest corporate entity. Amongst international banks, Standard Chartered has one of the largestloan portfolios in the Dubai market and the UAE as a whole, estimated to be $7.77bn in total.This amounts to 4.2% of Standard Chartered's total loans outstanding. Other impacted banks



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included HSBC, Barclays, and RBS. However, Standard Chartered said that any impairmentarising from this exposure would not be material.

Standard Chartered announced an agreement on 27 April 2010 to buy the African custody business from Barclays PLC. This was to provide the bank with custody capabilities in its

markets across Africa.

On 13 May 2010, Standard Chartered PLC launched the first-ever Indian Depository Receipt³IDR´ offer On 17 June 2010, Standard Chartered Bank And Agricultural Bank of ChinaStrengthen Strategic Partnership. Hong Kong has been identified as a potential pilot region for the two banks¶ co-operation journey. Standard Chartered¶s and ABC¶s aim is to co-operate to provide their corporate and individual customers with world class financial markets products. A joint co-operation committee will be formed by both banks to drive the strategic direction of the partnership. The committee will be co-chaired by Mr Peter Sands, CEO of Standard Chartered,and Mr Zhang Yun, President of ABC. [

In December 2010 Standard Chartered was recognised as the Global Bank of the Year in TheBanker's Bank of the Year 2010 awards.

Standard Chartered Breeze

Standard Chartered Breeze is a mobile banking application for the iPhone & iPad that can also beused on the computer. It is largely similar to the online banking services offered by other banks,with the exception of its function to issue electronic bank cheques. Launched in summer 2010and aggressively marketed, the reviews have been generally positive. In addition, it has attracted

an uncommon amount of attention due to many innovative marketing strategies it used to promote its product, mostly focussing on social media. Standard Chartered Breeze organised a blogger's meet for bloggers to preview Breeze, and it's Twitter campaign to give away a free iPadwas extremely successful. To date, Standard Chartered Breeze's twitter page has more than threetimes the followers than their closest competitor.

Breeze is currently only available in parts of Asia, primarily Singapore.

Senior management

Peter Sands is the chief executive of Standard Chartered Bank. His total annual reward packageis $4,142,000, consisting of $1,516,000 salary and a bonus of up to $2,626,000.



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ROLE DESCRIPTION SUMMARY

ROLE TITLE REPORTING RELAT Chairman Reports to the Board

LOCATION DIRECT REPORTS

London The Group Chief Executive and the Group

Company

Secretary

PURPOSE

Lead the Board and represent the Group and act as the overall custodian of the Group on behalf of

the Board and the stakeholders.

KEY RESPONSIBILITIES

Leadership

Lead the Board, ensuring its effectiveness in all aspects of its role and set its agenda.

Ensure that the directors receive accurate, timely and clear information and reports to enable them

to effectively monitor all aspects of the Group¶s business.Lead an annual evaluation of the

performance of the Board, its Committees and individual directorsand act on the results by

recognising the strengths and addressing the weaknesses of the Board.Chair the Nomination

Committee and, through it, secure effective appointments to and retirements from Board

Committees and the Board.Facilitate the effective contribution of non-executive directors and

encourage constructive relations between executive and non-executive directors.

Hold meetings with the non-executive directors, without the executive directors being present.

Together with the Group Chief Executive and the Group Company Secretary, ensure compliance

with the Board¶s approved procedures including the Schedule of Matters Reserved for the Board.

Together with the Group Company Secretary, provide a well designed induction programme for

new directors and further development and training as appropriate.

Strategy and Management



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Together with the Group Chief Executive, develop the strategy of the Group and ensure the

Board is fully appraised and has the opportunity to debate and contribute to the strategic direction

of the Group.

External Relations

Together with the Group Chief Executive, ensure that the Group communicates effectively with

its stakeholders. The stakeholders are shareholders, regulators, governments, politicians,

customers, staff and the communities in which the Group operates.

Together with the Group Chief Executive, ensure that the Group communicates eff ectively with

international institutions, governments, rating agencies, financial institutions, the media, the

public and any relevant special interest groups who have a legitimate concern or involvement with

the business of the Group.Ensure that the views of its shareholders are communicated to the

Board as a whole.Chair the Annual General Meeting and all other General Meetings of the

Company. Ensure that the Chairmen of Board Committees are available to answer questions and

that all directors attend.



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NRI ACCOUNT

DEFINATION

NRI is defined as a person resident outside india who is citizen of india.

In terms of Regulation 2 FEMA Notification No. 13 dated May 3,2000

Non- Resident Indian (NRI) means a person resident outside india who is

a citizen of india. Person of India Origin (PIO) means a citizen of any

country other than Bangladesh or Pakistan.

who had a

(a) at any time held indian passport

or

(b) he or either of his parents or any of his grand -parents was a citizen

of india by virtue of the constitution of india or the Citizenship Act

1955 or

(c) the person os spouse pf indian citizen or a person reffered to in (a)

or (b).



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TYPES OF NRI ACCOUNT

1. INDIVIDUAL ACCOUNT

2. NON-INDIVIDUAL ACCOUNT

INDIVIDUAL ACCOUNT

There are two types of account

1. Non resident external account

2. Non resident ordinary account

NON RESIDENT EXTERNAL ACCOUNT

y NRE account may be in the form of savings, current, recurring or fixed deposit accounts.Such accounts can be opened only by the non-resident himself and not through the holder of the power of attorney.

y NRE accounts cannot be held jointly with residentsy Account will be maintained in Indian Rupees.y Balances held in the NRE account are freely repatriable.y Accrued interest income and balances held in NRE accounts are exempt from Income tax

and Wealth tax, respectively.y Authorised dealers/authorised banks may at their discretion/commercial judgement allow

for a period of not more than two weeks, overdrawings in NRE savings bank accounts, upto a limit of Rs.50,000 subject to the condition that such overdrawings together with theinterest payable thereon are cleared/repaid within a period of two weeks, out of inwardremittances through normal banking channels or by transfer of funds from other NRE/FCNR accounts.

y Savings - The interest rates on NRE Savings deposits shall be at the rate applicable todomestic savings deposits. Currently the interest rate is 3.5%.

y Term deposits ± The interest rates are stipulated by the Department of BankingOperations and Development, Reserve Bank of India. At present, with effect from theclose of business in India on November 15, 2008, interest rates on NRE deposits for oneto three years should not exceed the LIBOR/SWAP rates plus 175 basis points, as on thelast working day of the previous month, for US dollar of corresponding maturities.



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The interest rates as determined above for three year deposits will also be applicable incase the maturity period exceeds three years.

y Permissible credits to NRE account are inward remittance to India in permitted currency, proceeds of account payee cheques, demand drafts / bankers' cheques, issued against

encashment of foreign currency, where the instruments issued to the NRE account holder are supported by encashment certificate issued by AD Category-I / Category-II, transfersfrom other NRE / FCNR accounts, interest accruing on the funds held in such accounts,interest on Government securities/dividends on units of mutual funds purchased by debitto the NRE/FCNR(B) account of the holder, certain types of refunds, etc.

y Eligible debits are local disbursements, transfer to other NRE / FCNR accounts of personeligible to open such accounts, remittance outside India, investments in shares /securities/commercial paper of an Indian company, etc.

y Loans up to Rs.100 lakh can be extended against security of funds held in NRE Accounteither to the depositors or third parties.

y Such accounts can be operated through power of attorney in favour of residents for

limited purpose of withdrawal of local payments or remittances through normal bankingchannels to the account holder himself.

. Non-Resident (Ordinary) Rupee Account (NRO Account)

NRO accounts may be opened / maintained in the form of current, savings, recurring or fixeddeposit accounts.

y Savings Account - Normally maintained for crediting legitimate dues /earnings / income

such as dividends, interest etc.The interest rates on NRO Savings deposits shall be at therate applicable to domestic savings deposits. Currently the interest rate is 3.5 per cent.y Term Deposits - Banks are free to determine the interest rates.y Account should be denominated in Indian Rupees.y Permissible credits to NRO account are transfers from rupee accounts of non-resident

banks, remittances received in permitted currency from outside India through normal banking channels, permitted currency tendered by account holder during his temporaryvisit to India, legitimate dues in India of the account holder like current income like rent,dividend, pension, interest, etc., sale proceeds of assets including immovable propertyacquired out of rupee/foreign currency funds or by way of legacy/ inheritance.

y Eligible debits such as all local payments in rupees including payments for investmentsas specified by the Reserve Bank and remittance outside India of current income likerent, dividend, pension, interest, etc., net of applicable taxes, of the account holder.

y NRI/PIO may remit from the balances held in NRO account an amount not exceedingUSD one million per financial year, subject to payment of applicable taxes

y The limit of USD 1 million per financial year includes sale proceeds of immovable properties held by NRIs/PIO.

y The accounts may be held jointly with residents and / or with non-resident Indian.y The NRO account holder may opt for nomination facility.



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y NRO (current/savings) account can also be opened by a foreign national of non-Indianorigin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The details of this facility are givenin the FAQs on ³Accounts opened by Foreign Nationals and Foreign Tourists´ availableon the RBI website.

y

Loans to non-resident account holders and to third parties may be granted in Rupees byAuthorized Dealer / bank against the security of fixed deposits subject to certain termsand conditions.

Foreign Currency Non Resident (Bank) Account ± FCNR (B) Account

y FCNR (B) accounts are only in the form of term deposits of 1 to 5 yearsy All debits / credits permissible in respect of NRE accounts are permissible in FCNR (B)

accounts also.y Account can be in Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar and

Australian Dollar y In case the depositor with any convertible currency other than designated currency

desires to place a deposit in these accounts, authorised dealers may undertake with thedepositor a fully covered swap in that currency against the desired designated currency.Such a swap may also be done between two designated currencies.

y Loans up to Rs.100 lakh can be extended against security of funds held in FCNR(B)deposit either to the depositors or third parties.



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y The interest rates are stipulated by the Department of Banking Operations andDevelopment, Reserve Bank of India. At present, in respect of FCNR (B) deposits of allmaturities contracted effective from the close of business in India as on November 15,2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 100 basis points for the respective currency/corresponding maturities (as against LIBOR/SWAP

rates plus 25 basis points effective from close of business on October 15, 2008).Onfloating rate deposits, interest shall be paid within the ceiling of SWAP rates for therespective currency / maturity plus 100 basis points. For floating rate deposits, theinterest reset period shall be six months.

y When an account holder becomes a person resident in India, deposits may be allowed tocontinue till maturity at the contracted rate of interest, if so desired by him.

y Terms and conditions as applicable to NRE accounts in respect of joint accounts,repatriation of funds, opening account during temporary visit, operation by power of attorney, loans/overdrafts against security of funds held in accounts, shall apply mutatismutandis to FCNR (B).

Is the permission of the Reserve Bank required for opening the various accounts,mentioned above, by Bangladesh / Pakistan individuals/entities?

Opening of accounts by individuals/entities of Bangladesh / Pakistan nationality requires prior approval of the Reserve Bank. All such requests may be referred to the Chief General Manager-in-Charge, Foreign Exchange Department, Foreign Investment Division, Reserve Bank of India,Central Office, Mumbai - 400 001.

Can an individual resident borrow money from his close relatives outside India?

Yes, an individual resident can borrow sum not exceeding USD 250,000 or its equivalent from

his close relatives

3

staying outside India, subject to the conditions that:

i) the minimum maturity period of the loan is one year;ii) the loan is free of interest; andiii) the amount of loan is received by inward remittance in free foreign exchange through normal banking channels or by debit to the NRE/FCNR account of the NRI.

REMITTANCERemittance is the process of transfer the currency from one country to another

country and it is based upon the transaction which is transact between individual

two person and its also between non individual people

Example



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MR. sramik has purchased a bike from USA and he has to pay the money in from

foreign currency. that is called the individual transaction between two person.

Example

In case of non individual transaction

The importer sends athe money to the exporter before the goods were

manufactured.there are various document involved,which the importer lands over

to its bank,so as to make the payment to the exporter's bank.the importer normally

makes a request to if bank in form of an application to make payment to the

exporter's bank. the importer makes three copies of each document.one it keeps

with himself one it gives to if bank and the last one remains with the exporter.

the importer's bank will debit the exporter and transfer the money in the nostro

account.And from nostro account the money will be transfered to the exporter's

current account and debit the nostro account of the importer. In this documents will

through bank if it is advance direct payment and if it is advance direct than bank

will not be involved.

TYPES OF REMITTANCE WITH DOCUMENTS

corporate registered under companies act except financial intermediaries NGO's or

any other resident allowed by RBI under the automatic route/approvalroute are

elegible.

INTREST/PRINCIPLE ON ECB LOANS

Remittance towards paymet of interest/ principle amount on ECB

DOCUMENT REQUIRED



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1. TT APPLICATION

2. A 2 FORM

3. LATEST ECB2 RBI ACKNOWLEDGEMENT COPY

4. IT UNDERTAKING FOR INTEREST PAYMENT OR DIT RELIEF

CERTIFICATE COPY

5. DEMAND NOTE FROM THE LENDER OR REPAYMENT SCHEDULE

6. FEMA DECLARATION

LIMIT

repayment of principle USD 500 million subject to complaince with the minimum

average maturity period as applicable to the ECB

REMITTANCE OF ROYALTY/ TECHNICAL FEES

Any person in india

DOCUMENTATION REQUIRED

1. TT APPLICATION

2. A 2 FORM

3. AGREEMENT COPY

4. RBI/GOVERNMENT APPROVAL COPY

5. TCR/TCK FORM



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6. INCOME TAX UNDERTAKINGS

7. FEMA DECLARATION

LIMIT

5% of local sales and 8% on exports and lump sum payment not exceeding $2

million, if exceeds the above limits, ministry of industry and commerce approval

required

SALARY REPATRIATION FOR FAMILY MAINTINANCE BY

FOREIGH NATIONAL

Foreign nationals who are not parmanently resident in india but are in regular

employment with indian firm/ companies.


1. TT APPLICATION

2. A 2 FORM

3. INCOME TAX UNDERTAKINGS



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4. EMPLOYMENT AGREEMENT/CONTRACT COPY

5. FEMA DECLARATION

6. Declaration by the foreign naational that he is in regular employment and

said remittance does not exceeding net salary of a person who is resident butnot permanently resident in india.

TRANSFER OF SHARE FROM RESIDENT TO NON- RESIDENT

OR VICE VERSA

Any resident and non resident holding shares of a company incorporated under

companies Act and who transferred shares through private arrangement.


1. TT APPLICATION

2. FEMA DECLARATION

3. A 2 FORM



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4. FCTRS ( in quardruplicate)

5. IT UNDERTAKING

SALARY REPATRIATION FOR FAMILY MAINTINANCE BYFOREIGH NATIONAL

Foreign nationals who are not parmanently resident in india but are in regular

employment with indian firm/ companies.


1.TT APPLICATION

2.A 2 FORM



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3.INCOME TAX UNDERTAKINGS

4.EMPLOYMENT AGREEMENT/CONTRACT COPY

5.FEMA DECLARATION

6. Declaration by the foreign naational that he is in regular employment and said

remittance does not exceeding net salary of a person who is resident but not

permanently resident in india.

GENERAL INSURANCE PREMIUM, POLICY ISSUIED BY ANINSURER OUTSIDE OF INDIA.

with RBI's permission/Gernal permission from the central Governmenta, resident

can hold a feneral insurance policy issued by an insurer outside india.

The probition against taking general insurance policy issued by an insurer outside

india shall not apply to a unit located in special economic zone. A unit located in

SEZ can hold a policy for which premium has to be paid out of foreign exchange

balances.


1. TT APPLICATION



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2. FEMA DECLARATION

3. A 2 FORM

4. DEMAND NOTE FROM THE POLICY ISSUER

5. COPY OF THE POLICY HELD.

Application cum Declaration

(To be completed by the applicant)

Application for drawal of foreign exchange

I. Details of the applicant -

a. Name ____________________________

b. Address ____________________________________________

c. Account No. _____________________

I. Details of the foreign exchange required

1. Amount (Specify currency) ___________________



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2. Purpose __________________________________

I. I authorise you to debit my Saving Bank/Current/RFC/EEFC Account

No._________________ together with your charges and

* a) Issue a draft : Beneficiary's Name________________________

Address ________________________________

* b) Effect the foreign exchange remittance directly -

1. Beneficiary's Name _________________________________

2. Name and address of the Bank _______________________

3. Account No. ____________________

* c) Issue travellers cheques for _____________________________

* d) Issue foreign currency notes for _________________________

y (Strike out whichever is not applicable)

Signature

Declaration

(Under FEMA 1999)

I, _________________________ declare that -

* 1) The total amount of foreign exchange purchased from or remitted

through, all sources in India during this calendar year including this application is

within USD _____________ (USD ________________________

_____________________________s______________________________only ) the

annual limit prescribed by Reserve Bank of India for the said purpose.



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* 2) Foreign exchange purchased from you is for the purpose indicated

above.

y (Strike out whichever is not applicable)

Signature

Date:

Name _____________

Annex A

[Annex to A. P. (DIR Series) Circular No. 51 dated May 08, 2007]

Application cum Declaration for purchase of foreign exchange under the Liberalised

Remittance Scheme of USD 200,000 for Resident individuals

(To be completed by the applicant)

I. Details of the applicant

a. Name ««««««««««..

b. Address««««««««««

c. Account No««««««««..

d. PAN No««««««««««.



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PGD-FM, FINAL YEAR

BVDU AMPLIFY

II. Details of the foreign exchange required

1. Amount (Specify currency)««««««««««««

2. Purpose «««««««««««««««««««.

III. Source of funds: «««««««««««««.

IV. Nature of instrument

Draft«««««««««..

Direct remittance««««

V. Details of the remittance made under the Scheme in the financial year (April- March)

200«

Date :«««««« Amount :««««.

VI. Details of the Beneficiary

1. Name ««««««««..

2. Address ««««««««

3. Country ««««««««

4*. Name and address of the bank«««««««««.

5*. Account No«««««««««««««««««..

(* Required only when the remittance is to be directly credited to the bank account of the

beneficiary)

This is to authorize you to debit my account and effect the foreign exchange

remittance/issue a draft as detailed above. (strike out whichever is not applicable).

Declaration

I, ««««««. ««««(Name), hereby declare that the total amount of foreign exchange

purchased from or remitted through, all sources in India during the financial year as per item No.

V of the Application, is within the limit of USD 200,000/-(US Dollar One lakh only), which is the



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PGD-FM, FINAL YEAR

BVDU AMPLIFY

limit prescribed by the Reserve Bank for the purpose and certify that the source of funds for

making the said remittance belongs to me and will not be used for prohibited purposes.

Signature of the applicant

(Name)

Certificate by the Authorised Dealer

This is to certify that the remittance is not being made by/ to ineligible entities and that the

remittance is in conformity with the instructions issued by the Reserve Bank from time to time

under the Scheme.

Signature:

Name and designation of the authorised official:

Place:

Date: Stamp and seal

EFT

[ Paragraph 11 D.2]

Statement of Remittance of Fees/ Remuneration to foreign nationals

Instruction

1. The Statement should be completed in duplicate and submitted to an authorised dealer in

foreign exchange in cases where the service fees payable to foreign nationals are coveredby the authority delegated to authorised dealers for allowing remittances without approval of Reserve Bank.

2. The authorised dealer should seek the approval of Reserve Bank before allowing theremittance Where it cannot be allowed under the delegated authority.

3. A copy of the statement duly certified and the No Objection Certificate from Income-taxOffice in originalshould be sent to Reserve Bank along with Form A2 at the time of reportingthe remittance with R Return.



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4. Before forwarding the statement to Reserve Bank authorised dealers must properlyscrutinsed it to ensure that it is complete in all respects.

Documentation :

5. Form A2 (in duplicate) duly filled up and signed by the applicant firm/ company.6. Original Contract /Agreement//correspondence exchanged with overseas company/national

together with a certified copy thereof.7. Original invoice received from the foreign company/national duly certified and accepted for

payment by the applicant firm/company.8. A No Objection Certificate from indian Income-tax authority with a photocopy thereof for the

net amount to be remitted.9. Photocopy of the relevant pages of the passport of the foreign technician giving the name,

address and date of his arrival in India.10. Photocopy of the approval obtained from the Ministry of Home Affairs Where the period of

engagement of the technician exceeds three months.

________________________________________________________________________

1. Name and address of the Indian Firm/

Company

_

_______________________________________________________________________

2. Name and address of the foreign company/

national

________________________________________________________________________

3. Particulars of current passport of foreign national :-

(I) Name

(ii) Nationality

(iii) Academic/Professional Qualification

(iv) Passport Number



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BVDU AMPLIFY

(a) Date of Issue

(b) Place of Issue

(c) Issued by

(d) Country of residence as stated

in the passport

(e) Country of birth

4. Particulars of Visa (where necessary)

obtained by the applicant for his entry into

India---

(I) Visa number

(ii) Type of visa (e.g. Employment,

Business, Tourist, etc.)

(iii) Issue by

(iv) Date of Issue

(v) Period of validity

________________________________________________________________________

5. Nature of services obtained and period of

engagement

_______________________________________________________________________

6. Terms of engagement

_______________________________________________________________________

7. Particulars of amount to be remitted

(I) Per diem fees and the period for

which fees are being paid



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PGD-FM, FINAL YEAR

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(ii) Tax deducted

(iii) Net amount to be remitted

_____________________________________________________________________

8. Whether any approval of the Government has been

obtained for claiming exemption from Income-tax?

If so, give particulars of the approval.

9.Details of remittance already made by

the applicant firm/company during the

current calendar year towards fees/

remuneration for the services of foreign

nationals availed of.

Year No.of

man-days/

months

Name of

overseas

company

Amount

remitted

1) We hereby certify that the particulars given above are true and correct to the best of our

knowledge and belief.

2) We further certify that we have engagedthe services of the foreignnationals named above for

the period from------------ to --------------- and that we have not applied to any other authorised

dealer for remittance in this regard or the amount has not already been remitted abroad or

otherwise settled.

3) We further certify that the services of the foreign national/s engaged by us are not covered

either by any foreign collaboration agreement entered into by us with any foreign company or

under any warranty/guarantee obtained providing for deputationof the national/s by the foreign

company without any payment.



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________________________________

(Signature of Authorised Officials)

Place: Name: __________________________

Date: Stamp Designation: _____________________

__________________________________________________________________________

(To be completed by Authorised Dealer)

1. We certify thatnthe original documentary evidence furnishedby the applicant firm/ company

has been verified by us.

2. We further certify that the amount of fees/remuneration remitted to the beneficiary is covered

by the authority delegated to us in terms of paragraph 11d.2 of the Exchange Control Manual.

________________________________

(Signature of Authorised official)

Place:

Date: Name:__________________________



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PGD-FM, FINAL YEAR

BVDU AMPLIFY

Stamp Designation:______________________

Name and address

of the Authorised Dealer:___________

FC-GPR

PART - A

(To be filed by the company through its Authorised Dealer Category ± I bank with the Regional Office of the RBI under whose jurisdiction the Registered Office of the company making thedeclaration is situated as and when fresh investment in the Company is received, along with thefollowing documents:

i) A certificate from the Company Secretary of the company accepting investment from personsresident outside India



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

ii) A certificate from Statutory Auditors or Chartered Accountant indicating the manner of arriving at the price of shares issued to the persons resident outside India (as specified in para 9 B of Schedule I to Notification No. FEMA 20/2000-RB dated May 3, 2000.)

PAN Number

Date of issue /transfer of shares

No.

Particulars (In Block Letters)

1. Name

Address

State

Registration No. given by Registrar of CompaniesWhether existing company or newcompany (strike off whichever is notapplicable)

If existing company, give registrationnumber allotted by RBI for FDI, if any

Existing company / New company

Fax

Telephone

e-mail

2. Description of the main businessactivity



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NIC Code

Location of the project and NIC codefor the district where the project is located

Percentage of FDI allowed as per FDIpolicy

3 Details of the foreign collaborator

Name

Address

Country

Constitution (specify whether ForeignNational/Foreign Company/ FVCI / FII /NRI / PIO / others)

4 Particulars of Shares / Convertible Debentures Issued

(a) Nature and date of issue

Nature of issue Date of issue Number of shares/ convertible debentures

01 IPO / FPO

02 Preferential allotment /private placement

03 Rights

04 Bonus05 Conversion of ECB

06 Conversion of royalty(including lump sum payments)

07 ESOPs

08 Others (please specify)



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Total

(b) Type of security issued

Nature of security Number Maturity Facevalue

IssuePrice per

share

Amount of

inflow* Equity

Convertible Debentures(CDs)

(a) Compulsorily CDs

(b) Optionally CDs

(c) Partially CDs

Preference shares (PS)

(a) Convertible PS

(b) Non-Convertible PS

Units of VCFs

Others

Total

i) In case the issue price is greater than the face value please give break up of the premium

received

ii) * In case the issue is against conversion of ECB or royalty, a Chartered Accountant's

Certificate certifying the amount of the outstanding on the date of conversion

(c) Break up of premium Amount

Control Premium

Non competition fee

Others*

Total

* please specify the nature

(d)

Total inflow (in Rupees) on account of issue of shares to non-residents (including premium, if



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

any) vide

(i) Remittance through AD:

(ii) Debit to NRE/FCNR A/c with

Bank_________

(iii) Others

Date of reporting of (i) above to RBI under Para9 (1) A (i) of Notification No. FEMA 20/2000-RBdated May 3, 2000, as amended from time totime.

(e) Disclosure of fair value of shares issued**

We are a listed company and the market valueof a share as on date of the issue is *

We are an un-listed company; and the fair valueof a share is*

** before issue of shares *(Please indicate as applicable)

5. Post issue pattern of shareholding

Eq uity Preference Shares/ConvertibleDebentures

Investor category No.of

shares

Amount(Face

Value)Rs.

% No.of

shares

Amount(Face Value)

Rs.

%

a) Non-Resident

ForeignNationals

ForeignCompanies

FIIs

FVCIs

NRIs/PIOs

Sub Total

b) Resident

Total



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

DECLARATION TO BE FILED BY THE AUTHORISED REPRESENTATIVE OF THE INDIANCOMPANY:

We hereby declare that:

1. We comply with the procedure for issue of shares as laid down under the FDI scheme as

indicated in Notification No. FEMA 20/2000-RB dated 3rd May 2000 as amended from time to

time

2. The investment is within the sectoral policy/cap permissible under the Automatic Route of RBI

and we fulfill all the conditions laid down for investments under the Automatic Route namely

(strike off whichever is not applicable)

a) Foreign entity(ies)-(other than individuals), to whom we have issued shares have existing

joint venture or technology transfer or trade mark agreement in India in the same field.

(Conditions stipulated in Press Note 1 of 2005 Series dated January 12, 2005 have been

complied with).

OR

b) Foreign entity(ies)-(other than individuals), to whom we have issued shares do not have any

existing joint venture or technology transfer or trade mark agreement in India in the same field.

c) We are/ are not an SSI unit & the investment limit of 24 % of paid-up capital has been

observed/ requisite approvals have been obtained.

d) Shares have been issued on rights basis and the shares are issued to non-residents at a

price that is not lower than that at which shares have been issued to residents.

OR

e) Shares issued are bonus shares.

OR

f) Shares have been issued under a scheme of merger and amalgamation of two or more Indian

companies or reconstruction by way of demerger or otherwise of an Indian company, duly

approved by a court in India.

OR

g) Shares are issued under ESOP and the conditions regarding this issue have been satisfied



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

3. Shares have been issued in terms of SIA/FIPB approval No. --------------------- dated --------------------.(Delete whichever is not applicable under signature)

(Signature of the Applicant)* :___________________________________________

(Name in Block Letters) :___________________________________________

(Designation of the signatory) :___________________________________________

Place:

Date:



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

The following documents are enclosed (See Para 5 of Annex)

For sale of shares by a person resident in India

(i) Consent Letter duly signed by the seller and buyer or their duly appointed agent and

in the latter case the Power of Attorney Document

(ii) The shareholding pattern of the investee company after the acquisition of shares by a

person resident outside India

(iii) Certificate indicating fair value of shares from a Chartered Accountant.

(iv) Copy of Broker's note if sale is made on Stock Exchange.

(v) Undertaking from the buyer to the effect that he is eligible to acquire

shares/convertible debentures under FDI policy and the existing sectoral limits and

Pricing Guidelines have been complied with.

(vi) Undertaking from the FII/sub account to the effect that the individual FII/ Sub account

ceiling as prescribed by SEBI has not been breached.

Additional documents in respect of sale of shares by a person resident outside India

(vii) If the sellers are NRIs/OCBs, the copies of RBI approvals evidencing the shares held

by them on repatriation/non-repatriation basis.

(viii) No Objection/Tax Clearance Certificate from Income Tax Authority/Chartered Account.

1 Name of the company

Address (including e-mail ,telephone Number Fax no)

Activity

NIC Code No.

2 Whether FDI is allowed under Automatic route

Sectoral Cap under FDI Policy

3 Nature of transaction

Transfer from resident to non resident



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PGD-FM, FINAL YEAR

BVDU AMPLIFY

Transfer from non resident to resident

4 Name of the buyer

Category

(please tick appropriate category) Individual Company FII Others

In case of Company/FII etc please

indicate the constitution of the

company i.e. Limited company,

registered partnership etc

Date and Place of Incorporation

Address of the buyer (including e-mail ,telephone Number Fax no)

5 Name of the seller

Category

(Please tick appropriate category) Individual Company FII

Others(please

specify)

In case of Company/FII etc please

indicate the constitution of thecompany i.e. Limited company,

registered partnership etc

Date and Place of Incorporation

Address of the seller (including e-mail ,telephone Number Fax no)



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PGD-FM, FINAL YEAR

BVDU AMPLIFY

6 Particulars of earlier Reserve Bank/FIPB approvals

7 Details regarding shares/convertible debentures to be transferred

Date of the transaction

Number of

shares face value

Negotiated

Price for

the

transfer**

Amount of

consideration

8 Foreign Investments in the company

No of shares Percentage

Before the transfer

After the transfer

9 Where the shares are listed on Stock Exchange

If so Name of the Stock exchange

Price Quoted on the Stock exchange

Where the shares are Unlisted

Price as per Valuation guidelines*

Price as per Chartered Accountants Valuation report

*/ ** CA Certificate to be attached



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PGD-FM, FINAL YEAR

BVDU AMPLIFY

Declaration by the transferor/transferee

I/ We hereby declare that :

(i) The particulars given above are true and correct to the best of my/our knowledge and belief (ii) I/ We was/were holding the shares as per FDI Policy under FERA/ FEMA Regulations on

repatriation/non repatriation basis(iii) I/ We are eligible to acquire the shares of the company in terms of the FDI Policy. It is not a

transfer relating to shares of a company engaged in financial services sector or a sector where general permission is not available

(iv) The Sectoral limit under the FDI Policy and the pricing guidelines have been adhered to

Signature of the Declarant or

his duly authorised agent

Date:

Note

In respect of the transfer of shares from resident to non resident the declaration has to be signed by

the non resident buyer

and

In respect of the transfer of shares from non resident to resident the declaration has to be signed by

the non resident seller



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

Certificate by the AD Branch

It is certified that the application is complete in all respects

The receipt /payment for the transaction is in accordance FEMA Regulations/ Reserve Bank guidelines

Signature

Name and Designation of the Officer

Date: Name of the AD Branch

AD Branch Code

FACILITIES TO NRI CUSTOMER



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

1 General

1.1 For release of foreign exchange to persons resident in India for various current account

transactions, Authorised Dealer banks are to be guided by the Rules made by the Government of India under Section 5 of the Foreign Exchange Management Act, 1999 (as indicated in item 1

of Appendix 2)which are detailed in the Foreign Exchange Management (Current AccountTransactions) Rules, 2000 (Annex-1) notified by the Government of India vide Notification No.G.S.R.381 (E) dated 3rd May 2000 (Rules). In terms of the said Rules, drawal of foreignexchange for certain categories of transactions as listed in Schedule I is expressly prohibited.Exchange facilities for transactions included in Schedule II to the Rules may be permitted by theAuthorised Dealer banks provided the applicant has secured the approval from theMinistry/Department of the Government of India as specified therein. In respect of transactionsincluded in Schedule III, prior approval of the Reserve Bank would be required for remittanceexceeding the specified limits. The release of foreign exchange up to the threshold ceilings

specified in Schedule III stands delegated to the Authorised Dealer banks. All applications for release of foreign exchange exceeding the limits as prescribed in Schedule III to the Rules should be referred to the Regional Office concerned of the Foreign Exchange Department of the ReserveBank, under whose jurisdiction the applicant is functioning / residing.

1.2 ³Drawal´ of foreign exchange also includes use of International Credit Cards (ICC),International Debit Cards (IDC), ATM cards, etc. ³Currency´, inter al ia, includes ICC, IDC andATM Cards. Accordingly, all Rules, Regulations made and Directions issued under the Actapply to the use of ICC, IDC and ATM Cards.

1.3 In order to provide adequate foreign exchange facilities and efficient customer service, the

Reserve Bank has decided to grant licences to certain entities by authorising them as AuthorisedDealer ± Category II to undertake a range of non-trade current account transactions.Accordingly, Authorised Dealer ± Category II are authorised to release / remit foreign exchangefor the following non-trade current account transactions:

(a) Private visits,(b) Remittance by tour operators / travel agents to overseas agents / principals / hotels,(c) Business travel,(d) Fee for participation in global conferences and specialized training,(e) Remittance for participation in international events / competitions (towardstraining, sponsorship and prize money),

(f) Film shooting,(g) Medical treatment abroad,(h) Disbursement of crew wages,(i) Overseas education,(j) Remittance under educational tie up arrangements with universities abroad,(k) Remittance towards fees for examinations held in India and abroad and additional scoresheets for GRE, TOEFL, etc.



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(l) Employment and processing, assessment fees for overseas job applications,(m) Emigration and emigration consultancy fees,(n) Skills / credential assessment fees for intending migrants,(o) Visa fees,(p) Processing fees for registration of documents as required by the Portuguese / other

Governments, registration / subscription / membership fees to International Organisations.

1.4 Release of foreign exchange is not admissible for travel to and transaction with residents of Nepal and Bhutan. (cf. Clause (b) of Rule 3 of the Rules (as indicated in item 2 of Appendix 2).

A.2 Sale of Exchange

2.1 Authorised Persons may release foreign exchange for travel purposes on the basis of adeclaration given by the traveller regarding the amount of foreign exchange availed of during thefinancial year.

2.2 In case of issue of travellers cheques, the traveller should sign the cheques in the presence of an authorised official and the purchaser¶s acknowledgement for receipt of the travellers chequesshould be held on record.

2.3 Out of the overall foreign exchange being sold to a traveller, exchange in the form of foreigncurrency notes and coins may be sold up to the limit indicated below:

(i) Travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, RussianFederation and other Republics of Commonwealth of Independent States - not exceeding USD3000 or its equivalent.

(ii) Travellers proceeding to Iraq or Libya - not exceeding USD 5000 or its equivalent

(iii) Travellers proceeding to Islamic Republic of Iran, Russian Federation and other Republicsof Commonwealth of Independent States - full exchange may be released.

2.4 The form A2 relating to sale of foreign exchange should be retained for a period of one year by the Authorised Persons, together with the related documents, for the purpose of verification by their Internal Auditors. However, in respect of remittance applications for miscellaneous non-trade current account transactions of amount not exceeding USD 5,000, Authorised Dealers mayobtain simplified Application-cum-Declaration form (Form A2) as shown at Annex -2.

2.5 In cases where the remittances are allowed on the basis of self declaration, the onus of furnishing the correct details in the application will remain with the applicant who has certifiedthe details relating to the purpose of such remittance.

A.3 Medical Treatment

3.1 With a view to enable residents to avail of foreign exchange for medical treatment abroadwithout any hassles and any loss of time, Authorised Dealers may release foreign exchange up to



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PGD-FM, FINAL YEAR

BVDU AMPLIFY

an amount of USD 100,000 or its equivalent, on the basis of self declaration that the applicant is buying exchange for medical treatment outside India, without insisting on any estimate from ahospital/doctor.

3.2 For amount exceeding the above limit, estimate from the doctor in India or hospital/ doctor

abroad, is required to be submitted to the Authorised Dealers.

3.3 A person who has fallen sick after proceeding abroad may also be released foreign exchange by an Authorised Dealer for medical treatment outside India.

A.4 Cultural Tours

Dance troupes, artistes, etc., who wish to undertake tours abroad for cultural purposes shouldapply to the Ministry of Human Resources Development (Department of Education and Culture),Government of India, for their foreign exchange requirements. Authorised Dealers may releaseforeign exchange, on the strength of the sanction from the Ministry concerned, to the extent and

subject to conditions indicated therein.

A.5 Private Visits

Foreign exchange for private visit can also be released to a person who is availing of foreignexchange for travel outside India for any purpose up to the limits specified in Schedule III to theRules.

A.6 Business Visits

Foreign exchange may be released for undertaking business travel or attending a conference or

specialised training or for maintenance expenses of a patient going abroad for medical treatmentor check up abroad or for accompanying as attendant to a patient going abroad for medicaltreatment / check up to the limits specified in Schedule III to the Rules.

A.7 Period of surrender of foreign exchange

7.1 In case the foreign exchange purchased for a specific purpose is not utilized for that purpose,it could be utilized for any other eligible purpose for which drawal of foreign exchange is permitted under the relevant Rules / Regulation.

7.2 General permission is available to any resident individual to surrender received / realised /

unspent / unused foreign exchange to an Authorised Person within a period of 180 days from thedate of receipt / realisation / purchase / acquisition / date of return of the traveller, as the casemay be.

7.3 The liberalized uniform time limit of 180 days is applicable only to resident individuals andin areas other than export of goods and services.



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PGD-FM, FINAL YEAR

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7.4 In all other cases, the regulations / directions on surrender requirement shall remainunchanged. (cf. Notification No. FEMA 9/2000-RB dated May 3, 2000, as amended from time totime).

A.8 Unspent Foreign Exchange

8.1 As stated above, unspent foreign exchange brought back to India by a resident individualshould be surrendered to an Authorised Person within 180 days from the date of return of thetraveller. Exchange so brought back can be utilized by the individual for his/her subsequent visitabroad.

8.2 However, a returning traveller is permitted to retain with him, foreign currency travellerscheques and currency notes up to an aggregate amount of USD 2000 and foreign coins withoutany ceiling beyond 180 days. (cf. Notification No. FEMA 11/2000-RB dated May 3, 2000).Foreign exchange so retained, can be utilized by the traveller for his subsequent visit abroad.

8.3 A person resident in India can open, hold and maintain with an Authorised Dealer in India, aResident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the formof currency notes, bank notes and travellers cheques from any of the sources like, payment for services rendered abroad, as honorarium, gift, services rendered or in settlement of any lawfulobligation from any person not resident in India.

8.4 The account may also be opened / credited with foreign exchange earned abroad, including proceeds of export of goods and/or services, royalty, honorarium, etc., and/or gifts received fromclose relatives (as defined in the Companies Act) and repatriated to India through normal banking channels by resident individuals.

8.5 The eligible credits to the Resident Foreign Currency (Domestic) Account, out of foreignexchange acquired in the form of currency notes, bank notes and travellers cheques, are as under :-

(i) acquired by him from an Authorised Person for travel abroad and represents the unspentamount thereof or

(ii) acquired by him, while on a visit to any place outside India, by way of payment for servicesnot arising from any business in or anything done in India and by way of honorarium or gift or

(iii) acquired by him, from any person not resident in India, and who is on a visit to India, as

honorarium, gift, for services rendered or in settlement of any lawful obligation.

Note: W here a person a pproaches an Authorised Person for surrender of unspent/ unutil ized

foreign exchange a fter the prescribed period of 180 d ay s, Authorised Person shoul d not refuse to pur cha se the foreign exchange merely on the ground that the prescribed period ha s expired.

A.9 Remittances for Tour Arrangements, etc.



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PGD-FM, FINAL YEAR

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9.1 Authorised Dealers may remit foreign exchange up to a reasonable limit, at the request of atraveller towards his hotel accommodation, tour arrangements, etc., in the countries proposed to be visited by him or for making other tour arrangements for travellers from India, provided ineach case the Authorised Dealer is satisfied that the remittance is being made out of the foreignexchange purchased by the traveller concerned from an Authorised Person (including exchange

drawn for private travel abroad), in accordance with the Rules, Regulations and Directions inforce.

9.2 Authorised Dealers may effect remittances at the request of agents in India who have tie-uparrangements with hotels / agents, etc., abroad for providing hotel accommodation or makingother tour arrangements for travel from India, provided the Authorised Dealer is satisfied thatthe remittance is being made out of the foreign exchange purchased by the traveller concernedfrom an Authorised Person (including exchange drawn for private travel abroad) in accordancewith the Rules, Regulations and Directions in force.

9.3 Authorised Dealer may open foreign currency accounts in the name of agents in India who

have tie up arrangements with hotels / agents, etc., abroad for providing hotel accommodation or making other tour arrangements for travellers from India provided:-

a) the credits to the account are by way of depositingi) collections made in foreign exchange from travellers; andii) refunds received from outside India on account of cancellation of bookings / tour arrangements, etc., and

b) the debits in foreign exchange are for making payments towards hotel accommodation, tour arrangements, etc., outside India, in accordance with paragraph 9.2 above.

9.4 Authorised Dealer may allow tour operators to remit the cost of rail/ road/ water /transportation charges outside India without any prior approval from the Reserve Bank, net of commission/mark up due to the agent. The sale of passes/ticket in India can be made either against the payment in Indian Rupees or in foreign exchange released for visits abroad. The costof passes/tickets collected in Indian Rupees need not be adjusted in the travellers¶ entitlement of foreign exchange for private visit.

9.5 In respect of consolidated tours arranged by travel agents in India for foreign tourists visitingIndia and neighbouring countries like Nepal, Bangladesh, Sri Lanka, etc., against advance payments / reimbursement through an Authorised Dealer, part of the foreign exchange receivedin India against such consolidated tour arrangement, may require to be remitted from India tothese neighbouring countries for services rendered by travel agents and hoteliers in thesecountries. Authorised Dealer may allow such remittances after verifying that the amount beingremitted to the neighbouring countries (inclusive of remittances, if any, already made against thetour) does not exceed the amount actually remitted to India and the country of residence of the beneficiary is not Pakistan.

A.10 Payment in Rupees



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RAHUL SHARMA

PGD-FM, FINAL YEAR

BVDU AMPLIFY

Authorised Dealers may accept payment in cash up to Rs. 50,000 (Rupees fifty thousand only)against sale of foreign exchange for travel abroad (for private visit or for any other purpose).Wherever the sale of foreign exchange exceeds the amount equivalent to Rs.50,000, the paymentmust be received only by

i. a crossed cheque drawn on the applicant¶s bank account, or ii. crossed cheque drawn on the bank account of the firm/company sponsoring the visit of the applicant, or

iii. Banker¶s Cheque / Pay Order / Demand Draft or iv. Debit / credit / prepaid cards provided

a) KYC/AML guidelines are complied with b) sale of foreign currency / issue of foreign currency TCs is within the limits (credit / prepaid cards) prescribed by the bank andc) the purchaser of foreign currency / foreign currency TCs and the credit/debit/prepaidcard holder is one and the same person.

Note:W

here the rupee equival ent of foreign exchange dr awn exceeds Rs 50,000 either for an y sing l e dr awal or more than one dr awal reck oned together for a sing l e journe y / visit, it shoul d be

paid b y cheque or dr a ft.

A.11 Advance Remittance ± Import of services

Authorised Dealers (Category-I banks) may allow advance remittance for import of services.However, where the amount exceeds USD 500,000 or its equivalent, a guarantee from a bank of International repute situated outside India or a guarantee from an Authorised Dealer in India,if such a guarantee is issued against the counter-guarantee of a bank of International reputesituated outside India, should be obtained from the overseas beneficiary. The Authorised Dealer

should also follow up to ensure that the beneficiary of the advance remittance has fulfilled hisobligations under the contract or agreement with the remitter in India.

In the case of a Public Sector Company or a Department /Undertaking of the Government of India /State Governments, approval from the Ministry of Finance, Government of India for advance remittance for import of services without bank guarantee for an amount exceeding USD100,000 (US Dollars one hundred thousand only) or its equivalent is required.

A.12 Issue of Guarantee- Import of services

Authorised Dealer may issue guarantee on behalf of their customers importing services, provided:

a. the guarantee amount does not exceed USD 500,000

b. the AD Category ±I Bank is satisfied about the bonafides of the transaction.

c. the AD Category ±I Bank ensures submission of documentary evidence for import of servicesin the normal course.



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d. the guarantee is to secure a direct contractual liability arising out of a contract between aresident and a non-resident.

In the case of a Public Sector Company or a Department /Undertaking of the Government of

India /State Governments, approval from the Ministry of Finance, Government of India for issueof guarantee for an amount exceeding USD 100,000 (US Dollars one hundred thousand only) or its equivalent is required.

In case of invocation of the guarantee, the Authorised Dealer is required to submit to the Chief General Manager-in-Charge, Foreign Exchange Department, Foreign Investments Division(EPD), Reserve Bank of India, Central Office, Mumbai- 400001 a report on the circumstancesleading to the invocation of the guarantee.

A.13 Liberalised Remittance Scheme of USD 200,000 for Resident Individuals

13.1 Under this Scheme, Authorised Dealers may freely allow remittances by residentindividuals up to USD 200,000 per financial year (April-March) for any permitted current or capital account transactions or a combination of both.

13.2 The facility is available to all resident individuals including minors.

13.3 Remittances under the facility can be consolidated in respect of family members subject toindividual family members complying with the terms and conditions of the Scheme.

13.4 Remittances under the Scheme are allowed only in respect of permissible current or capitalaccount transactions or a combination of both. All other transactions which are otherwise not

permissible under FEMA and those in the nature of remittance for margins or margin calls tooverseas exchanges / overseas counterparty are not allowed under the Scheme.

13.5 Resident individuals are free to acquire and hold immovable property or shares (of listedcompanies or otherwise) or debt instruments or any other asset outside India without prior approval of the Reserve Bank.

13.6 The limit of USD 200,000 under the Scheme also include remittances towards gift anddonation by a resident individual.

13.7 Remittances under the Scheme can be used for purchasing objects of art subject to the

provisions of other applicable laws such as the extant Foreign Trade Policy of the Government of India.

13.8 The Scheme can also be used for remittance of funds for acquisition of ESOPs. TheScheme is in addition to acquisition of ESOPs linked to ADR / GDR and acquisition of qualification shares.



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13.9 A resident individual can invest in units of Mutual Funds, Venture Capital Funds, unrateddebt securities, promissory notes, etc. under this Scheme. Further, the resident can invest in suchsecurities out of the bank account opened abroad under the Scheme (see 13.12).

13.10 An individual who has availed of a loan abroad while as a non resident can repay the same

on return to India under the Scheme as a resident.

13.11 The Scheme can be used for outward remittance in the form of a DD either in the residentindividual¶s own name or in the name of beneficiary with whom he intends putting through the permissible transactions at the time of private visit abroad, against self declaration of the remitter in the format prescribed.

13.12 Individuals can also open, maintain and hold foreign currency accounts with a bank outside India for making remittances under the Scheme without prior approval of the ReserveBank. The foreign currency accounts may be used for putting through all transactions connectedwith or arising from remittances eligible under this Scheme.

13.13 Banks should not extend any kind of credit facilities to resident individuals to facilitateremittances under the Scheme.

13.14 The scheme is not available for remittances for any purpose specifically prohibited under Schedule I or any item restricted under Schedule II of Foreign Exchange Management (CurrentAccount Transaction) Rules, 2000.

13.15 The facility is not available for making remittances directly or indirectly to Bhutan, Nepal,Mauritius and Pakistan.

13.16 The Scheme is not available for remittance to countries identified by Financial ActionTask Force (FATF) as non co-operative countries and territories as available on FATF websitewww.fatf-gafi.org. or as notified by the Reserve Bank.

13.17 For undertaking transactions under the Scheme, resident individuals may use theapplication-cum-Declaration Form as at Annex-3 and it is mandatory to have PAN number to

make remittances under the Scheme.

13.18 AD Category ± I banks are required to furnish the information on remittances made under this scheme on a monthly basis, in the revised format as at Annex-7, to the Chief GeneralManager-in-Charge, Foreign Exchange Department, (FID-EPD), Reserve Bank of India, Central

Office, 11th Floor, Central Office Building, Mumbai - 400 001, on or before fifth of thefollowing month to which it relates. A soft copy of the statement (in Excel format) may also besent by email. This statement in the revised format should be forwarded through Online ReturnsFiling System (ORFS) for which purpose all the AD Category ± I Banks have been given user IDand password by the Reserve Bank.

A.14 Documentation



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14.1 The Reserve Bank will not, generally, prescribe the documents which should be verified bythe Authorised Dealers while releasing foreign exchange. In this connection, attention of authorized dealers is drawn to sub-section (5) of Section 10 of the FEMA, 1999 (as indicated in

item 3 of Appendix 2) which provides that an authorised person shall require any person desiringto transact in foreign exchange to make such a declaration and to give such information as will

reasonably satisfy him that the transaction will not involve and is not designed for the purpose of any contravention or evasion of the provisions of the FEMA or any rule, regulation, notification,direction or order issued there under.

14.2 Authorised Dealers are also required to keep on record any information /documentation, on the basis of which the transaction was undertaken, for verification by theReserve Bank. In case the applicant refuses to comply with any such requirement or makesunsatisfactory compliance therewith, the Authorised Dealer shall refuse, in writing, to undertakethe transaction and shall, if he has reasons to believe that any contravention / evasion iscontemplated by the person, report the matter to the Reserve Bank.

14.3 Authorised Dealers have specifically been advised that they may release foreign exchangeup to USD 100,000 each for employment, emigration, maintenance of close relatives, educationand medical treatment abroad without insisting on any supporting documents but on the basis of self declaration incorporating certain basic details of the transactions and submission of FormA2. In addition, the existing facility of release of exchange by Authorised Persons up to USD10,000 or its equivalent in one financial year for one or more private visits to any country (except Nepal and Bhutan) will continue to be available on a self declaration basis.

A.15 Endorsement on Passport

It is not mandatory for Authorised Dealers to endorse the amount of foreign exchange sold for

travel abroad on the passport of the traveller. However, if requested by the traveller, they mayrecord under their stamp, date, signature and details of foreign exchange sold for travel.

A.16 International Credit Cards

16.1 The restrictions contained in Rule 5 of the Foreign Exchange Management (CurrentAccount Transactions) Rules, 2000 will not be applicable for use of International Credit Cards(ICCs) by residents for making payment towards expenses, while on a visit outside India.

16.2 Residents can use ICCs on internet for any purpose for which exchange can be purchasedfrom an Authorised Dealer in India, e.g. for import of books, purchase of downloadablesoftware or import of any other item permissible under Foreign Trade Policy (FTP).

16.3 ICCs cannot be used on internet or otherwise for purchase of prohibited items, like lotterytickets, banned or proscribed magazines, participation in sweepstakes, payment for call-back services, etc., since no drawal of foreign exchange is permitted for such items/activities.

16.4 There is no aggregate monetary ceiling separately prescribed for use of ICCs throughinternet.



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16.5 Resident individuals maintaining foreign currency accounts with an Authorised Dealer inIndia or a bank abroad, as permissible under extant Foreign Exchange Regulations, are free toobtain ICCs issued by overseas banks and other reputed agencies. The charges incurred againstthe card either in India or abroad, can be met out of funds held in such foreign currencyaccount/s of the card holder or through remittances, if any, from India only through a bank where

the card holder has a current or savings account. The remittance for this purpose should also bemade directly to the card issuing agency abroad, and not to a third party.

16.6 The applicable limit will be the credit limit fixed by the card issuing banks. There is nomonetary ceiling fixed by the Reserve Bank for remittances, if any, under this facility.

16.7 Use of ICC for payment in foreign exchange in Nepal and Bhutan is not permitted.

A.17 International Debit Cards

17.1 Banks authorised to deal in foreign exchange are issuing International Debit Cards (IDCs)

which can be used by a resident for drawing cash or making payment to a merchantestablishment overseas during his visit abroad. It is clarified that IDCs can be used only for permissible current account transactions and the item-wise limits as mentioned in the Schedulesto the Rules, as amended from time to time, are equally applicable to payments made through useof these cards.

17.2 The IDCs cannot be used on internet for purchase of prohibited items like lottery tickets, banned or proscribed magazines, participation in sweepstakes, payment for call-back services,etc., i.e. for such items/activities for which drawal of foreign exchange is not permitted.

17.3 The International Banking Divisions/Foreign Exchange Departments of AD banks were

required to submit a statement as on December 31, each year in the prescribed proforma, in casethe aggregate forex utilization by the IDC holders exceeds USD 100,000 in a calendar year. Therequirement of submission of the above statement by the AD banks has been discontinued fromthe calendar year 2010 onwards.

A.18 Store Value Cards/Charge Cards/Smart Cards, etc.

Certain Authorised Dealer banks are also issuing Store Value Card/Charge Card/Smart Card toresidents traveling on private/business visit abroad which are used for making payments atoverseas merchant establishments and also for drawing cash from ATM terminals. No prior permission from the Reserve Bank is required for issue of such cards. However, the use of such

cards is limited to permissible current account transactions and subject to the prescribed limitsunder the Rules, as amended from time to time.

A.19 Acquisition of foreign securities under Employees Stock Option Plan (ESOP)

Resident individuals who are either employees or director of an Indian office or branch of aforeign company in which foreign holding is not less than 51 per cent are permitted to acquire



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foreign securities under ESOP Scheme without any monetary limit. They are also permitted tofreely sell the shares provided the proceeds thereof are repatriated to India.

A.20 Income- tax clearance

Remittances to non-residents will be allowed to be made by the Authorised Dealers on production of an undertaking by the remitter and a Certificate from a Chartered Accountant inthe formats (Annex - 4) prescribed by the Central Board of Direct Taxes, Ministry of Finance,Government of India in their Circular No.10/2002 dated October 9, 2002. [cf. A. P. (DIR Series)Circular No.56 dated November 26, 2002].

What are the other facilities available to NRIs/PIO?

A. Investment facilities for NRIs

NRI may, without limit, purchase on repatriation basis:

y Government dated securities / Treasury billsy Units of domestic mutual funds;y Bonds issued by a public sector undertaking (PSU) in India.y Non-convertible debentures of a company incorporated in India.y Perpetual debt instruments and debt capital instruments issued by banks in India.y Shares in Public Sector Enterprises being dis-invested by the Government of India,

provided the purchase is in accordance with the terms and conditions stipulated in thenotice inviting bids.



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y Shares and convertible debentures of Indian companies under the FDI scheme (includingautomatic route & FIPB), subject to the terms and conditions specified in Schedule 1 tothe FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended from time totime.

y Shares and convertible debentures of Indian companies through stock exchange under

Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 3to the FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended from time totime.

NRI may, without limit, purchase on non-repatriation basis :

y Government dated securities / Treasury billsy Units of domestic mutual fundsy Units of Money Market Mutual Fundsy National Plan/Savings Certificatesy Non-convertible debentures of a company incorporated in Indiay

Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedules3 and 4 to the FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended fromtime to time.

y Exchange traded derivative contracts approved by the SEBI, from time to time, out of INR funds held in India on non-repatriable basis, subject to the limits prescribed by theSEBI.

Note : NRIs are not permitted to invest in small savings or Public Provident Fund (PPF).

B. Investment in immovable Property

y NRI / PIO4 / Foreign National who is a person resident in India (citizen of Pakistan,Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank) may acquire immovable property in India other thanagricultural land/ plantation property or a farm house out of repatriable and / or non-repatriable funds.

y The payment of purchase price, if any, should be made out of

(i) funds received in India through normal banking channels by way of inward remittancefrom any place outside India or

(ii) funds held in any non-resident account maintained in accordance with the provisionsof the Act and the regulations made by the Reserve Bank.

Note : No payment of purchase price for acquisition of immovable property shall be made either by traveller¶s cheque or by foreign currency notes or by other mode other than those specifically permitted as above.



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y NRI may acquire any immovable property in India other than agricultural land / farmhouse plantation property, by way of gift from a person resident in India or from a personresident outside India who is a citizen of India or from a person of Indian origin residentoutside India

y NRI may acquire any immovable property in India by way of inheritance from a person

resident outside India who had acquired such property in accordance with the provisionsof the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India

y An NRI may transfer any immovable property in India to a person resident in India.y NRI may transfer any immovable property other than agricultural or plantation property

or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.

In respect of such investments, NRIs are eligible to repatriate:

y The sale proceeds of immovable property in India if the property was acquired out of

foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account.y The amount to be repatriated should notexceed the amount paid for the property in

foreign exchange received through normal banking channel or by debit to NRE account(foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.

y In the event of sale of immovable property, other than agricultural land / farm house / plantation property in India, by NRI / PIO, the repatriation of sale proceeds is restrictedto not more than two residential properties subject to certain conditions.

y If the property was acquired out of Rupee sources, NRI or PIO may remit an amount upto USD one million per financial year out of the balances held in the NRO account(inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for allthe bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to taxcompliance.

y Refund of (a) application / earnest money / purchase consideration made by house- building agencies/seller on account of non-allotment of flats / plots and (b) cancellationof booking/deals for purchase of residential/commercial properties, together with interest,net of taxes, provided original payment is made out of NRE/FCNR (B) account/inwardremittances.

Repayment of Housing Loan of NRI / PIOs b y cl ose relatives of the borrower in India

Housing Loan in rupees availed of by NRIs/ PIOs from ADs / Housing Financial Institutions inIndia, can be repaid by the close relatives in India of the borrower.

C. Facilities to returning NRIs/PIO



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y Returning NRIs/PIO may continue to hold, own, transfer or invest in foreign currency,foreign security or any immovable property situated outside India, if such currency,security or property was acquired, held or owned when resident outside India

F oreign Currency Account

y A person resident in India who has gone abroad for studies or who is on a visit to aforeign country may open, hold and maintain a Foreign Currency Account with a bank outside India during his stay outside India, provided that on his return to India, the balance in the account is repatriated to India. However, short visits to India by the studentwho has gone abroad for studies, before completion of his studies, shall not be treated ashis return to India.

y A person resident in India who has gone out of India to participate in an exhibition/tradefair outside India may open, hold and maintain a Foreign Currency Account with a bank outside India for crediting the sale proceeds of goods on display in the exhibition/tradefair. However, the balance in the account is repatriated to India through normal banking

channels within a period of one month from the date of closure of the exhibition/tradefair.

Resident F oreign Currency Account

y Returning NRIs /PIOs may open, hold and maintain with an authorised dealer in India aResident Foreign Currency (RFC) Account to transfer balances held in NRE/FCNR(B)accounts.

y Proceeds of assets held outside India at the time of return, can be credited to RFCaccount.

y The funds in RFC accounts are free from all restrictions regarding utilisation of foreigncurrency balances including any restriction on investment in any form outside India.

y RFC accounts can be maintained in the form of current or savings or term depositaccounts, where the account holder is an individual and in the form of current or termdeposits in all other cases.

1A Non Resident Indian (NRI) is a person resident outside India, who is a citizen of India or is a

person of Indian origin.2 A Person of Indian Origin (PIO) for this purpose is defined in Regulation 2 of FEMA Notification ibid as a citizen of any country other than Bangladesh or Pakistan, if (a) he at anytime held Indian passport; or (b) he or either of his parents or any of his grandparents was acitizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955);or (c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b).



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3 'Close relative' means relative as defined in Section 6 of the Companies Act, 1956.

4 'A Person of Indian Origin' means an individual (not being a citizen of Pakistan or Bangladesh

or Sir Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who (i) at any time, held an

Indian Passport or (ii) who or either of whose father or mother or whose grandfather or

grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act,1955 (57 of 1955).

1. Remittance facilities for Non Resident Indians (NRIs) / Persons of Indian Origin(PIO) and Foreign Nationals

The Regulations for transfer of assets outside India by a person, whether resident in Indiaor not, are given in the Notification Nos. FEMA 13/2000-RB and FEMA 21/2000- RBdated May 3, 2000 and the related amendments to these Notifications. Accordingly,remittance of funds from the sale of capital assets in India held by a person, whether resident in or outside India, requires approval of the Reserve Bank except to the extent provided in FEMA or Rules or Regulations made there under.

2. Definition of NRI/PIO

NRI for this purpose is defined as a person resident outside India who is citizen of India.In terms of Regulation 2 of FEMA Notification No.13 dated May 3, 2000, Non-Resident Indian (NRI) means a person resident outside India who is a citizen of India.Person of Indian Origin (PIO) means a citizen of any country other than Bangladesh or Pakistan who had (a) at any time held Indian passport or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or theCitizenship Act, 1955 or (c) the person is a spouse of an Indian citizen or a personreferred to in (a) or (b).

3. Remittance of current income

3.1 Remittance outside India of current income like rent, dividend, pension, interest, etc.in India of the account holder is a permissible debit to the NRO account. AuthorisedDealer banks may also allow repatriation of current income like rent, dividend, pension,interest, etc. of NRIs who do not maintain an NRO account in India based on anappropriate certification by a Chartered Accountant, certifying that the amount proposedto be remitted is eligible for remittance and that applicable taxes have been paid/providedfor.



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3.2 NRIs/PIO have the option to credit the current income to their Non-Resident(External) Rupee account, provided the Authorized Dealer bank is satisfied that the creditrepresents current income of the non-resident account holder and income tax thereon has been deducted / provided for.

3.3 Foreign nationals who come to India on employment and become residents in termsof section 2 (v) of FEMA, 1999, and are eligible to open/hold a resident savings bank account, are permitted to re-designate their resident account maintained in India as NROaccount on leaving the country after their employment to enable them to receive their legitimate dues subject to certain conditions.

4. Remittance of assets by a foreign national of non-Indian origin

4.1 A foreign national of non-Indian origin who has retired from an employment in Indiaor who has inherited assets from a person resident in India or who is a widow of an

Indian citizen who was resident in India, may remit an amount not exceeding USD onemillion, per financial year (April-March), subject to the satisfaction of the AuthorisedDealer bank, on production of documentary evidence in support of acquisition /inheritance of assets, an undertaking by the remitter and certificate by a CharteredAccountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002.

4.2 These remittance facilities are not available to citizens of Nepal and Bhutan.

5. Remittance of assets by NRI/PIO

5.1 A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) may remit anamount up to USD one million, per financial year, out of the balances held in his Non-Resident (Ordinary) Rupee (NRO) account / sale proceeds of assets (inclusive of assetsacquired by way of inheritance or settlement), for all bonafide purposes, subject to thesatisfaction of the Authorized Dealer bank, and on production of an undertaking by theremitter and certificate by a Chartered Accountant in the formats prescribed by theCentral Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002.

5.2 NRI/PIO may remit sale proceeds of immovable property purchased by him out of Rupee funds (or as a person resident in India) as indicated in paragraph 5.1 abovewithout any lock-in-period.

5.3 In respect of remittance of sale proceeds of assets acquired by way of inheritance or legacy or settlement for which there is no lock-in period, NRI / PIO may submit to theAuthorised Dealer documentary evidence in support of inheritance or legacy of assets, anundertaking by the remitter and certificate by a Chartered Accountant in the prescribedformats. Settlement is also a mode of inheritance from the parent, the only difference being that the property under the settlement passes to the beneficiary on the death of theowner/parent without any legal procedures/hassles and helps in avoiding delay and



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inconvenience in applying for probate, etc. In case settlement is done without retainingany life interest in the property i.e. during the lifetime of the owner/parent, it would betantamount to regular transfer by way of gift. Therefore, if the property is received by NRI/PIO by way of settlement without the settler retaining life interest, it may bereckoned as transfer by way of gift and the remittance of sale proceeds of such property

would be guided by the extant instructions on remittance of balance in the NRO account.

5.4 (a) The remittance facility in respect of sale proceeds of immovable property is notavailable to citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepaland Bhutan.

(b) The facility of remittance of sale proceeds of other financial assets is not available tocitizens of Pakistan, Bangladesh, Nepal and Bhutan.

6. Remittance of Salary

6.1 A citizen of a foreign state resident in India, being an employee of a foreign companyand on deputation to the office/ branch/ subsidiary/ joint venture in India of such foreigncompany or being an employee of a company incorporated in India, may open, hold andmaintain a foreign currency account with a bank outside India and receive/ remit thewhole salary payable to him for the services rendered, by credit to such account, provided that income tax chargeable under the Income Tax Act, 1961 is paid on theentire salary as accrued in India.

6.2 A citizen of India, employed by a foreign company outside India and on deputation tothe office/ branch/ subsidiary/ joint venture in India of such foreign company, may open,hold and maintain a foreign currency account with a bank outside India and receive thewhole salary payable to him for the services rendered to the office/ branch/ subsidiary/ joint venture in India of such foreign company, by credit to such account, provided thatincome tax chargeable under the Income Tax Act, 1961 is paid on the entire salary asaccrued in India.

[The above provisions on remittance of Salary should be read with Schedule III (7)

of FEM (Current Account Transactions) Rules, 2000]

7. Repatriation of sale proceeds of residential property purchased by NRIs / PIO out

of foreign exchange

7.1 Repatriation of sale proceeds of residential property purchased by NRI / PIO is permitted to the extent of the amount paid for acquisition of immovable property inforeign exchange received through banking channels. The facility is restricted to notmore than two such properties. The balance amount can be credited to the NRO accountand can be remitted under USD one million facility as mentioned in paragraph 5.1.

7.2 Authorised Dealer banks may permit repatriation of amounts representing the refundof application / earnest money / purchase consideration made by the house building



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agencies / seller on account of non-allotment of flat / plot / cancellation of bookings /deals for purchase of residential / commercial property, together with interest, if any (netof income tax payable thereon), provided the original payment was made out of NRE /FCNR (B) account of the account holder, or remittance from outside India throughnormal banking channels and the Authorized Dealer bank is satisfied about the

genuineness of the transaction. Such funds may also be credited to the NRE / FCNR (B)account of the NRI / PIO, if they so desire.

7.3 Authorised Dealer banks may allow repatriation of sale proceeds of residentialaccommodation purchased by NRIs/PIO out of funds raised by them by way of loansfrom the authorized dealer banks / housing finance institutions to the extent of suchloan/s repaid by them out of foreign inward remittances received through normal bankingchannel or by debit to their NRE / FCNR(B) accounts.

8. Facilities for students

8.1 Students going abroad for studies are treated as Non- Resident Indians (NRIs) and areeligible for all the facilities available to NRIs under FEMA.

8.2 As non-residents, they will be eligible to receive remittances from India (i) up toUSD 100,000 from close relatives in India, on self declaration, towards maintenance,which could include remittances towards their studies also (ii) up to USD 1 million per financial year, out of sale proceeds of assets / balances in their NRO account maintainedwith an Authorised Dealer bank in India and (iii) upto USD 200,000 per financial year under the Liberalized Remittance Scheme.

8.3 All other facilities available to NRIs under FEMA are equally applicable to thestudents.

8.4 Educational and other loans availed of by them as residents in India will continue to be available as per FEMA regulations.

9. Income-tax clearance

The remittances will be allowed to be made by the Authorized Dealer banks on production of an undertaking by the remitter and a certificate from a CharteredAccountant in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India in their Circular No.10/2002 dated October 9, 2002. [cf.A. P. (DIR Series) Circular] No.56 dated November 26, 2002].

10. International Credit Cards

Authorised Dealer banks have been permitted to issue International Credit Cards to NRIs/PIO, without prior approval of the Reserve Bank. Such transactions may be settled by inward remittance or out of balances held in the cardholder¶s FCNR(B) / NRE / NROaccounts.



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Annex-1

Statement / returns to be submitted to the Reserve Bank

Master Circular on Remittance Facilities for Non-Resident Indians/Persons of Indian

Origin / Foreign Nationals

Particulars of statement Periodicity Relevant instructions

Facilities to NRIs/PIO and Foreign Nationals ± Liberalisation- Remittance from NRO account.

QuarterlyA.P. (DIR Series) Circular No.

12 dated November 16, 2006

Annex-2

Operational Instructions for Authorised Dealer Banks

1. General

1.1 Authorised Dealer banks may carefully study the provisions of the Act / Regulations / Notifications issued under the Foreign Exchange Management Act, 1999 (the Act).

1.2 Reserve Bank will not prescribe the documents which should be verified by theAuthorised Dealer banks while permitting remittances for various transactions. In this

regard Authorised Dealer banks may refer to sub-section (5) of Section 10 of the Act.

1.3 In terms of the provisions contained in sub-section 5 of section 10 of the Act, beforeundertaking any transaction in foreign exchange on behalf of any person, AuthorisedDealer bank is required to obtain a declaration and such other information from the person (applicant) on whose behalf the transaction is being undertaken that willreasonably satisfy him that the transaction is not designed to contravene or evade the provisions of the Act or any of the Rules or Regulations made or Notifications or directions or orders issued under the Act. Authorised Dealer banks should preserve theinformation/ documents obtained by them from the applicant before undertaking thetransactions for verification by the Reserve Bank.

1.4 In case the person on whose behalf the transaction is being undertaken refuses or does not give satisfactory compliance of the requirements of an Authorised Dealer bank,he shall refuse in writing to undertake the transactions. Where an Authorised Dealer bank has reasons to believe that a contravention or evasion of the Act or the Rules or Regulations made or Notifications issued there under was contemplated in the transactionthat he has refused to undertake, he shall report the matter to the Reserve Bank.



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1.5 With a view to maintaining uniform practices, Authorized Dealer banks may consider requirements or documents to be obtained by their branches to ensure compliance withthe provisions of sub-section (5) of section 10 of the Act.

2. Remittance of current income

2.1 Remittance outside India of current income like rent, dividend, pension, interest, etc.in India of the account holder is a permissible debit to the NRO account. AuthorisedDealer banks may allow repatriation of current income like rent, dividend, pension,interest, etc. of NRIs who do not maintain an NRO account in India based on anappropriate certification by a Chartered Accountant, certifying that the amount proposedto be remitted is eligible for remittance and that applicable taxes have been paid/providedfor.

2.2 NRIs/PIO have the option to credit the current income to their Non-Resident(External) Rupee account, provided the Authorised Dealer bank is satisfied that the credit

represents current income of the non-resident account holder and income tax thereon has been deducted / provided for.

3. Restrictions

1. The remittance facility in respect of sale proceeds of immovable property is notavailable to citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.

2. The facility of remittance of sale proceeds of other financial assets is not available tocitizens of Pakistan, Bangladesh, Nepal and Bhutan.

4. Tax compliance

Authorised dealer banks can allow remittances to non-residents only on production of anundertaking by the remitter and a Certificate from a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India intheir Circular No.10/2002 dated October 9, 2002. [cf. A.P. (DIR Series) Circular No.56 dated

November 26, 2002].



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