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FOREIGN
CURRENCY REMITTANCES |
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Q. What is the
limit upto which foreign currency notes and coins may be sold to a traveller?
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a. |
Travellers proceeding to countries other
than Iraq, Libya, Islamic Republic of Iran, Russian Federation and other
Republics of Commonwealth of Independent States. |
Not exceeding USD 2000 or its equivalent. |
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b. |
Travellers proceeding to Iraq or Libya |
Not exceeding USD 5000 or its equivalent. |
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c. |
Travellers proceeding to Islamic Republic of
Iran, Russian federation and other Republics of Commonwealth of
Independent States. |
Full exchange may be released. |
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Q. What is the
limit upto which branches may accept payment in cash against the sale of foreign
exchange for travel abroad (for private visit or for any other purpose)?
A. Wherever the sale of foreign exchange exceeds the amount equivalent to
Rs.50,000, the payment must be received only by a
i. 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.
Note: Where the rupee equivalent of foreign exchange drawn exceeds Rs
50,000 either for any single drawal or more than one drawal reckoned together
for a single journey/visit, it should be paid by cheque or draft, as explained
above. |
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Q. What is
the period upto which form A2 should be retained at the branch and what is the
limit upto which branches need not obtain form A2?
A. The form A2 relating to sale of foreign exchange for travel abroad,
should be retained for a period of one year by the authorised dealers, together
with the related documents, for the purpose of verification by their Internal
Auditors. Such forms need not be obtained by the authorised dealers for
remittance applications less than USD 5,000. A simplified application form
prescribed by RBI to be used in such cases. |
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Q. What is
the time limit for surrendering the unutilised foreign exchange purchased by the
person?
A. 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 Regulation.
The unutilised portion of foreign exchange is required to be surrendered to an
authorised person within a period of 60 (sixty) days from the date of its
purchase (cf. Notification No. FEMA 9/2000-RB Dated 3rd. May 2000).
Note: In cases where a person approaches an authorized person for
surrendering foreign exchange after 60 days, the authorized person should not
refuse to purchase the foreign exchange merely on the ground that the prescribed
period of 60 days has expired. |
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Q. Is it permissible for the
traveller to retain the unspent foreign exchange purchased by him?
A. a. The unspent foreign exchange brought back to India by a traveller
should be surrendered to an authorised person within 90 days from the date of
return of the traveller, if the unspent foreign exchange is in the form of
currency notes. If such foreign exchange is in the form of traveller’s cheques,
the same should be surrendered to an authorised person within 180 days from the
date of return. Exchange so brought back can be utilised by the traveller for
his subsequent visit abroad during the period specified above.
b. However, a returning traveller is also permitted to retain with him,
foreign currency traveller’s cheques and currency notes upto an aggregate amount
of USD 2000 and foreign coins without any ceiling (cf. Notification No. FEMA
11/2000-RB dated 3rd May 2000). Foreign exchange so retained, can be utilised by
the traveller for his subsequent visit abroad. |
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Q. Is it necessary to endorse the
amount of foreign exchange sold for travel in the passport of the traveller?
A. It is not mandatory for branches to endorse the amount of foreign
exchange sold for travel abroad. However, if requested by the traveller, they
may record under their stamp, date and signature, details of foreign exchange
sold for travel. |
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Q. What are the transactions listed
under Schedule III for which branches are permitted to release foreign exchange
to persons resident in India?
A. a. Release of exchange upto USD 10,000 or its equivalent in one
calendar year, for one or more private visits to any country (except Nepal and
Bhutan).
b. Gift remittance upto USD 5,000 per remitter/donor per annum.
c. Donation upto USD 5000 per remitter/donor per annum.
d. Remittance upto USD 100,000 for persons going abroad for employment.
e. Exchange facilities for emigration exceeding USD 100,000 or amount
prescribed by country of emigration.
f. Remittance for maintenance of close relatives abroad,
i. upto the net salary (after deduction of taxes, contribution to
provident fund and other deductions) of a person who is resident but not
permanently resident in India and -
a. is a citizen of a foreign State other than Pakistan; or
b. is a citizen of India, who is on deputation to the office or branch or
subsidiary or joint venture in India of such foreign company.
ii. upto USD 100,000 per year, per recipient, in all other cases.
Explanation: For the purpose of this item, a person resident in India on
account of his employment or deputation of a specified duration (irrespective of
length thereof) or for a specific job or assignment; the duration of which does
not exceed three years, is a resident but not permanently resident.
g. Release of foreign exchange, upto USD 25,000 to a person irrespective
of period of stay, for business travel, or attending a conference or specialised
training or for maintenance expenses of a patient going abroad for medical
treatment or check-up abroad, or for accompanying as attendant to a patient
going abroad for medical treatment/check-up.
h. Release of exchange for meeting expenses for medical treatment abroad
upto the estimate from the doctor in India or hospital/doctor abroad.
i. Release of exchange for studies abroad for the estimate amount from
the institution abroad or USD 100,000, per academic year, whichever is higher.
j. Commission, per transaction, to agents abroad for sale of residential
flats or commercial plots in India upto USD 25,000 or 5% of the inward
remittance whichever is more.
k. Remittance upto USD 1,000,000 per project, for any consultancy service
procured from outside India.
l. Remittances for purchase of trade mark or franchise in India.
m. Remittance upto USD 100,000 by an entity in India by way of
reimbursement of pre-incorporation expenses. |
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Q. What is
Liberalised Remittance Scheme of USD 25,000?
A. Under this Scheme, authorized dealers may freely allow remittances by
individuals upto USD 25,000 per calendar year for any permissible current or
capital account transactions or a combination of both. Resident individuals are
free to acquire and hold immovable property or shares or any other asset outside
India without prior approval of the Reserve Bank. 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 Reserve Bank of
India. The foreign currency accounts may be used for putting through all
transactions connected with or arising from remittances eligible under this
Scheme. |
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Q. What is the procedure to be
followed for release of Foreign Exchange for travel? |
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Application for release of
foreign exchange and declaration-cum-undertaking (under Section 10(5),
Chapter III of FEMA, 1999)
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Form A2 in duplicate (RBI's
standard form A2) will be obtained only if the foreign exchange is released
in excess of USD 5000.
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Xerox copies of Passport and
Visa will be required to be obtained and kept on record for release of
exchange to foreign travellers who do not hold an account with the branch.
This is essential for exercising due diligence and proper identification of
remitters. For release of exchange to account holders, where the identity is
already established, there is no need for obtaining Xerox copies of Passport
and Visa. However, the same should be seen/verified by our branches for
their satisfaction and necessary details like passport no. place and date of
issue and expiry date can be noted on the standard application form
mentioned at (a) above.
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There is no need to ask the
customer to produce/show the Air tickets for the purpose of verification.
Further, the exchange released is not required to be endorsed on the
passport by the branch unless it is specifically requested by the traveller.
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Q. What is the
procedure for Advance Remittances against other than Imports?
A. If advance remittance is made for purposes other than import of goods,
viz. engagement of foreign nationals, consultancy services, advertisement
charges etc., a guarantee from an Overseas 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
repute situated outside India must be obtained from the beneficiary when the
amount exceeds USD 100,000/- or equivalent. |
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