1. Frequently asked questions (FAQ) on Foreign Exchange Facilities for Residents

2. Release of Foreign Exchange for private visit abroad - Endorsement on Passport

3. Release of Foreign Exchange for visits abroad - Currency Component

4. Release of Foreign Exchange for Travel outside India

Part I	Foreign Exchange Management ( Current account Transactions Rules), 2000
Part II	Release of Foreign Exchange for Travel by Authorised Dealers
Part III	Release of Foreign Exchange for Travel by Full Fledged Money Changers (FFMCs)
5. Foreign Exchange Management Act , 1999 Foreign Travel

 

Foreign Exchange Facilities for Residents
~ Frequently asked questions (FAQ)
(As on September 1, 2001)

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Introduction

The legal framework for administration of exchange control in India is provided by the Foreign Exchange Management Act, 1999. Under the Act, freedom has been granted for buying and selling of foreign exchange for undertaking current account transactions. However, the Central Government has been vested with powers in consultation with Reserve Bank to impose reasonable restrictions on current account transactions. Accordingly, the Government has issued Notifications GSR.381(E) dated May 3, 2000, and S.O. 301(E) dated March 30, 2001, imposing certain restrictions on current account transactions in public interest.

These details are available on the Bank’s website besides with the authorised dealers and regional offices of the Exchange control Department. Our experience so far has been that the residents like to get information on several matters relating to various current account transactions and other incidental issues. This pamphlet contains answers to all such questions in simple language. While preparing replies to questions, special care has been taken to ensure that the replies are drafted in simple words and reference to technical details are avoided.

I hope that the pamphlet will prove immensely useful to public as a part of basic guidelines and for further details, members of public should approach any authorised dealer or regional office of the Exchange Control Department. 

P. K. Biswas
Chief General Manager-in-Charge
Reserve Bank of India
Central Office
Mumbai
June 12, 2001

The Foreign Exchange Management Act,1999 (FEMA), has come into force with effect from June 1, 2000. With introduction of the new Act (in place of FERA) certain structural changes have been introduced and now all transactions involving foreign exchange have been classified either as Capital or Current Account transactions. All transactions undertaken by a resident that do not alter his assets or liabilities outside India are current account transactions. In terms of Section 5 of the FEMA, persons are free to buy or sell foreign exchange for any current account transaction except for those transactions on which Central Government has imposed restrictions, vide its Notification No.G.S.R.381(E) dated May 3, 2000 (as amended from time to time). Full text of the said Notification is available in the Official Gazette. Incidentally, no release of foreign exchange is admissible for any kind of travel to Nepal and Bhutan or for any transaction with persons resident in Nepal and Bhutan.

Some of the commonly or frequently asked questions by residents in connection with foreign exchange facilities or restrictions have been answered in following paragraphs.

How much exchange is available for a business trip?

Authorised dealers can release foreign exchange up to US$25,000 for a business trip to any country other than Nepal and Bhutan. Release of foreign exchange exceeding US$25,000 for a travel abroad (other than Nepal and Bhutan) for business purposes, irrespective of period of stay, requires prior permission from Reserve Bank. Visits in connection with attending of an international conference, seminar, specialised training, study tour, apprentice training, etc., are treated as business visits. Visit abroad for medical treatment and/or check up also falls within this category.
 

Can one obtain additional foreign exchange for medical treatment outside India?

A person visiting abroad for medical treatment can also obtain foreign exchange upto the amount recommended by the doctor or hospital abroad for his treatment. This exchange is to meet the expenses involved in treatment and in addition to the amount referred to in paragraph 1 above.
 

How much exchange is available for studies outside India?

Release of foreign exchange for studies abroad up to the estimate given by an institution abroad or US$30,000 per academic year, whichever is higher, does not require prior permission from the Reserve Bank.
 

How much foreign exchange can one buy when going for tourism to a country outside India?

In connection with private visits abroad, viz., for tourism purposes, etc., foreign exchange up to US$5,000, in any one calendar year may be obtained from an authorised dealer. The ceiling of US$5,000 is applicable in aggregate and foreign exchange may be obtained for one or more than one visits provided the aggregate foreign exchange availed of in one calendar year does not exceed the prescribed ceiling of US$5,000 {The facility was earlier called B.T.Q or F.T.S.}. This US$5,000 (BTQ) can be availed of by a person alongwith foreign exchange for travel abroad for any purpose, including for employment or immigration or studies. However, no foreign exchange is available for visit to Nepal and/or Bhutan for any purpose.
 

How much foreign exchange is available to a person going abroad on employment?

Person going abroad for employment can draw foreign exchange upto US$5,000 from any authorised dealer in India.
 

How much foreign exchange is available to a person going abroad on immigration?

Person going abroad for immigration can draw foreign exchange upto US$5,000 per person from any authorised dealer in India. This amount is only to meet the incidental expenses in the country of migration. No amount of foreign exchange can be remitted outside India to become eligible or for earning points or credits for immigration. All such remittances require prior permission of the Reserve Bank.
 

Is there any purpose for which going abroad requires prior approval from the Reserve Bank or Govt. of India?

Dance troupes, artistes, etc., who wish to undertake cultural tours abroad, should obtain prior approval from the Ministry of Human Resources Development, Government of India, New Delhi.
 

From where one can buy foreign exchange?

Foreign exchange can be purchased from any authorised dealer. Besides authorised dealers, full-fledged money changers are also permitted to release exchange for business and private visits.
 

How much foreign exchange can be purchased in foreign currency notes while buying exchange for travel abroad?

Travellers are allowed to purchase foreign currency notes/coins only up to US$ 2000. Balance amount can be taken in the form of traveller’s cheque or banker’s draft. Exceptions to this are (a) travellers proceeding to Iraq and Libya can draw foreign exchange in the form of foreign currency notes and coins not exceeding US$ 5000 or its equivalent; (b) travellers proceeding to the Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States can draw entire foreign exchange released in form of foreign currency notes or coins.

Do same Rules apply to persons going for studies abroad?

For the purpose of studies abroad, exchange for maintenance expenses is released in the form of (i) currency notes up to US$ 500, (ii) the balance foreign exchange may be taken in form of traveller’s cheques or bank draft payable overseas.

How much in advance one can buy foreign exchange for travel abroad

The foreign exchange acquired for any purpose has to be used within 60 days of purchase. In case it is not possible to use the foreign exchange within the period of 60 days it should be surrendered to an authorised dealer.

Can one pay by cash full rupee equivalent of foreign exchange being purchased for travel abroad

Foreign exchange for travel abroad can be purchased from banks against rupee payment in cash up to Rs.50,000/-. However, if the rupee equivalent exceeds Rs.50,000/-, the entire payment should be made by way of a crossed cheque/banker’s cheque/pay order/demand draft only.

Within what period a traveller who has returned to India is required to surrender foreign exchange?

On return from a foreign trip travellers are required to surrender unspent foreign exchange held in the form of currency notes within 90days and travellers’ cheques within 180 days of return. However, they are free to retain foreign exchange upto US$2,000, in form of foreign currency notes or TCs for future use.

On return to India can one retain some foreign exchange?

Residents are permitted to hold foreign currency up to US$2,000 or its equivalent provided the foreign exchange was -

1. acquired by him while on a visit to any place outside India by way of payment for services not arising from any business in or anything done in India;

   or

2. acquired by him, from any person not resident in India and who is on a visit to India, as honorarium or gift or for services rendered or in settlement of any lawful obligation,

   or

3. acquired by him by way of honorarium or gift while on a visit to any place outside India;

   or

4. acquired by him from an authorised person for travel abroad and represents the unspent amount thereof.

Is one required to surrender foreign coins also to an authorised dealer?

There is no restriction on residents holding foreign coins.

How much foreign exchange can one send as gift / donation to a person resident outside India?

Any person resident in India can remit upto US$5,000 in any one year as a gift to a person residing outside India or as donation to a charitable/educational/religious /cultural organisation outside India. Remittances exceeding the limit require prior permission from the Reserve Bank.
 

Is one permitted to use International Credit Card (ICC) for undertaking foreign exchange transactions?

Use of the International Credit Cards (ICCs)/ATMs/ Debit Cards can be made for making personal payments like subscription to foreign journals, internet subscription, etc., and for travel abroad in connection with various purposes only to the extent of the limits specified above. However, the cards can be freely used in India. Use of these instruments for payment in foreign exchange in Nepal and Bhutan is not permitted.

While coming into India how much Indian currency can be brought in?

A person coming in to India from abroad can bring in with him Indian currency notes within the limits given below:

1. upto Rs. 5,000 from any country other than Nepal or Bhutan, and

2. any amount in denomination not exceeding Rs.100 from Nepal or Bhutan.

While going abroad how much Indian currency can be taken out?

A person going out of India can take out with him Indian currency notes within the limits given below:

1. upto Rs.5000 to any country other than Nepal or Bhutan, and

2. any amount in denomination not exceeding Rs.100 to Nepal or Bhutan .

While coming into India how much foreign exchange can be brought in?

A person coming into India from abroad can bring with him foreign exchange without any limit provided if foreign currency notes, or travellers cheques exceed US$ 10,000/- or its equivalent and/or the value of foreign currency exceeds US$ 5,000/- or its equivalent, it should be declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.

While going abroad how much foreign exchange can a person carry?

Residents are free to carry the foreign exchange purchased from an authorised dealer or money changer in accordance with the Rules. In addition, they can also carry up to US$ 2,000, if already held by them (see item13 above) in accordance with the Regulations.

Is one required to follow complete export procedure when a gift parcel is sent outside India?

A person resident in India is free to send (export) any gift article of value not exceeding Rs. 1,00,000 provided export of that item is not prohibited under the extant EXIM Policy.

How much jewellery one can carry while going abroad?

Taking personal jewellery out of India is governed by Baggage Rules framed under Export-Import Policy by the Government of India.

Can a resident open a foreign currency denominated account in India

Persons resident in India are permitted to maintain foreign currency accounts in India under following two Schemes:

1. EEFC Accounts –

   To avoid exchange loss on conversion of foreign exchange into Indian Rupee & Rupee into foreign exchange, residents can retain upto 50% of foreign currency remittances received from abroad in a foreign currency account, viz., EEFC account, with an authorised dealer in India . Funds held in EEFC account can be utilised for current account transactions and also for approved capital account transactions as specified by the extant Rules/Regulations/Notifications/Directives issued by the Government/RBI from time to time.
    

2. RFC Accounts :-

Returning Indians, i.e., those Indians, who were non-residents earlier, and are returning now for permanent stay, are permitted to open, hold and maintain with an authorised dealer in India a Resident Foreign Currency (RFC) Account to keep their foreign currency assets. Assets held outside India at the time of return can be credited to such accounts. The funds in RFC account are free from all restrictions regarding utilisation of foreign currency balances including any restriction on investment outside India. The facility is also available to residents provided foreign exchange to be credited to such account is received out of certain specified type of funds/accounts.

Can a person resident in India hold assets outside India?

In terms of sub-section 4, of Section (6) of the Foreign Exchange Management Act, 1999, a person resident in India is free 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 by such person when he was resident outside India or inherited from a person who was resident outside India.

General Information

For further details/guidance, please approach any bank authorised to deal in foreign exchange or contact Regional Offices of the Exchange Control Department of the Reserve Bank.

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Release of Foreign Exchange for private visit abroad - Endorsement on Passport : A.P.(DIR Series) Circular No.12 (November 23, 2001)

RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI-400 001

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November 23, 2001

A.P.(DIR Series) Circular No.12
A.P.(F.L. Series) Circular No.2

To
All Authorised Persons in Foreign Exchange

Dear Sirs/Madam,

Release of Foreign Exchange for private visit abroad - Endorsement on Passport

In terms A.P.(DIR Series) Circular No.20/A.P.(F.L. Series) Circular No.2 dated November 16, 2000, authorised persons are required to invariably endorse on the traveller's passport, the amount of foreign exchange sold for tourism and private purposes, under their stamp, date and signature.

2. With a view to further simplifying the procedures, it has now been decided that henceforth ADs and FFMCs need not make any endorsement on the passports of the travellers availing of foreign exchange for tourism and private purposes. Accordingly, on the basis of a declaration given by the traveller regarding the amount of foreign exchange availed of during a calendar year, ADs/FFMCs may release exchange for travel for tourism and private purposes. Travellers can, however, seek endorsement on their passports, of foreign exchange released, at their option, if they consider it necessary for their record.

3. Authorised persons may bring the contents of this circular to the notice of their constituents concerned.

4. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).

Yours faithfully,

Grace Koshie
Chief General Manager

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Release of Foreign Exchange for visits abroad - Currency Component
A.P.(DIR Series) Circular No. 11

Reserve Bank of India
Exchange Control Department
Central Office Mumbai - 400 001

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November 13, 2001

A.P.(DIR Series) Circular No. 11
A.P.(FL Series) Circular No. 1

To
All Authorised Persons in Foreign Exchange

Dear Sirs/Madam 

Release of Foreign Exchange for visits abroad - Currency Component

Authorised dealers as well as Full Fledged Money Changers are permitted to sell foreign exchange in the form of foreign currency notes and coins upto US$ 500 or its equivalent to travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States. It has been decided to increase this ceiling to US$ 2,000 (US Dollar Two thousand only) to the travellers proceeding to these countries without prior permission from the Reserve Bank. Authorised dealers and Full Fledged Money changers may accordingly sell foreign exchange in the form of foreign currency notes and coins upto US$ 2,000 or its equivalent out of the overall foreign exchange released to them.

2. Authorised persons may bring the contents of circular to the notice of their constituents concerned.

3. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).

Yours faithfully,

Grace Koshie
Chief General Manager

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Release of Foreign Exchange for Travel outside India

Exchange Control Department
Reserve Bank of India
Central Office
Mumbai

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EC.CO.PCD.No.17/15.02.76/2001-02                                                            August 13, 2001

To all Authorised Dealers in Foreign Exchange

Sirs,

Master Circular – Release of Foreign Exchange for Travel outside India

As you are aware Foreign Exchange Management Act, 1999 has been introduced with effect from June 1, 2000. In terms of Section 5 of the Act, any person may sell or draw foreign exchange to and from authorised person for a current account transaction. However, Central Government has been empowered to impose certain restrictions for current account transactions in public interest and in consultation with Reserve Bank. Accordingly, Government of India issued Notification No. GSR 381(E) dated May 3, 2000 as amended vide its Notification No.SO 301(E) dated March 30, 2001. Copy of the Notification (as amended upto March 30, 2001) is annexed.

2. Reserve Bank had issued various circulars containing directions for authorised persons for release of foreign exchange for travel outside India.

3. In order to enable the Authorised Dealers (ADs) and Full Fledged Money Changers (FFMCs) to have all the existing instructions on the subject of "Release of foreign exchange for travel outside India" as on July 1, 2001, at one place, a Master Circular has been prepared.

4. This Master Circular consolidates the directions contained in the under noted circulars, as on July 1, 2001.

i)	A.P.(DIR Series) Circular No.1	….	June 1, 2000
	A.P. (F.L.Series) Circular No.1
ii)	A.P.(DIR Series) Circular No.19	….	October 30, 2000
iii)	A.P.(DIR Series) Circular No.20	….	November 16, 2000
	A.P.(F.L.Series) Circular No.2

Any contravention or non-observance of the directions consolidated in this circular will be liable to be proceeded against under the provisions of the Act.

Yours faithfully,
Grace Koshie
Chief General Manager

 

Master Circular for Release of Foreign Exchange for Travel Outside India

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	Contents
Part I	Foreign Exchange Management ( Current account Transactions Rules), 2000
Part II	Release of Foreign Exchange for Travel by Authorised Dealers
Part III	Release of Foreign Exchange for Travel by Full Fledged Money Changers (FFMCs)

Part I NOTIFICATION

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New Delhi, the 3rd May 2000
(as amended by Notification S.O.301(E) dated March 30,2001)

G.S.R.381(E).--In exercise of the powers conferred by Section 5 and sub-section (1) and clause (a) of sub-section (2) of Section 46 of the Foreign Exchange Management Act, 1999, and in consultation with the Reserve Bank, the Central Government having considered it necessary in the pubic interest, makes the following rules, namely :---

1. Short title and commencement.---(1) These rules may be called the Foreign Exchange Management (Current Account Transactions) Rules, 2000;

(2) They shall come into effect on the 1st day of June, 2000.

2. Definitions.---In these rules, unless the context otherwise requires :

1. "Act" means the Foreign Exchange Management Act, 1999 (42 of 1999);

2. "Drawal" means drawal of foreign exchange from an authorised person and includes opening of Letter of Credit or use of International Credit Card or International Debit Card or ATM Card or any other thing by whatever name called which has the effect of creating foreign exchange liability;

3. "Schedule" means a schedule appended to these rules;

4. The words and expressions not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act.

3. Prohibition on drawal of Foreign Exchange.---Drawal of foreign exchange by any person for the following purpose is prohibited, namely :

1. a transaction specified in the Schedule I; or

2. a travel to Nepal and/or Bhutan; or

3. a transaction with a person resident in Nepal or Bhutan.

Provided that the prohibition in clause (c) may be exempted by RBI subject to such term and conditions as it may consider necessary to stipulate by special or general order.

4. Prior approval of Govt. of India.---No person shall draw foreign exchange for a transaction included in the Schedule II without prior approval of the Government of India :

Provided that this Rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter.

5. Prior approval of Reserve Bank.

No person shall draw foreign exchange for a transaction included in the Schedule III without prior approval of the Reserve Bank;

Provided that this Rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter.

6 (1) Nothing contained in rule 4 or rule 5 shall apply to drawal made out of funds held in Exchange Earners’ Foreign Currency (EEFC) account of the remitter.

(2) Notwithstanding anything contained in sub-rule (1), restrictions imposed under rule 4 or rule 5 shall continue to apply where the drawal of foreign exchange from the Exchange Earners Foreign Currency (EEFC) Account is for the purpose specified in items 10 and 11 of Schedule II, or item 3, 4, 11, 16 & 17 of Schedule III as the case may be.

Schedule I

(See Rule 3)

1. Remittance out of lottery winnings.

2. Remittance of income from racing/riding etc. or any other hobby.

3. Remittance for purchase of lottery tickets, banned/proscribed magazines, football pools, sweepstakes, etc.

4. Payment of commission on exports made towards equity investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of Indian companies.

5. Remittance of dividend by any company to which the requirement of dividend balancing is applicable.

6. Payment of commission on exports under Rupee State Credit Route.

7. Payment related to "Call Back Services" of telephones.

8. Remittance of interest income on funds held in Non-Resident Special Rupee( Account) Scheme.

Schedule II
(See Rule 4)

Purpose of Remittance	Ministry/Department of Govt. of India whose approval is required
1. Cultural Tours	Ministry of Human Resources Development, (Department of Education and Culture)
2. Advertisement in foreign print media , for the purposes other than promotion of tourism, foreign investments and international bidding (exceeding US$ 10,000) by a State Government and its Public Sector Undertakings	Ministry of Finance, (Department of Economic Affairs)
3. Remittance of freight of vessel charted by a PSU	Ministry of Surface Transport, (Chartering Wing)
4. Payment of import by a Govt. Department or a PSU on c.i.f. basis (i.e. other than f.o.b. and f.a.s. basis)	Ministry of Surface Transport, (Chartering Wing)
5. Multi-modal transport operators making remittance to their agents abroad	Registration Certificate from the Director General of Shipping
6. Remittance of hiring charges of transponders	Ministry of Finance, (Department of Economic Affairs)
7. Remittance of container detention charges exceeding the rate prescribed by Director General of Shipping	Ministry of Surface Transport (Director General of Shipping)
8. Remittances under technical collaboration agreements where payment of royalty exceeds 5% on local sales and 8% on exports and lump-sum payment exceeds US$ 2 million	Ministry of Industry and Commerce
9. Remittance of prize money/sponsorship of sports activity abroad by a person other than International/National/State Level sports bodies. If the amount involved exceeds US$ 100,000	Ministry of Human Resources Development (Department of Youth Affairs and Sports)
10. Payment for securing Insurance for health from a company abroad	Ministry of Finance, (Insurance Division)
11. Remittance for membership of P & I Club	Ministry of Finance, (Insurance Division)

Schedule III
(See Rule 5)

1. Remittance by artiste e.g. wrestler, dancer, entertainer etc. (This restriction is not applicable to artistes engaged by tourism related organisations in India like ITDC, State Tourism Development Corporations etc. during special festivals or those artistes engaged by hotels in five star categories, provided the expenditure is met out of EEFC account).

    

2. Release of exchange exceeding US$ 5,000 or its equivalent in one calendar year, for one or more private visits to any country (except Nepal and Bhutan).

    

3. Gift remittance exceeding US$ 5,000 per remitter/donor per annum.

    

4. Donation exceeding US$ 5000 per remitter/donor per annum.

    

5. Exchange facilities exceeding US$ 5,000 for persons going abroad for employment.

    

6. Exchange facilities for emigration exceeding US$ 5,000 or amount prescribed by country of emigration.

    

7. Remittance for maintenance of close relatives abroad,

 

1. exceeding 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 is a citizen of a foreign state other than Pakistan.

2. Exceeding US$ 5,000 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 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.

8. Release of foreign exchange, exceeding US$ 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.

    

9. Release of exchange for meeting expenses for medical treatment abroad exceeding the estimate from the doctor in India or hospital/doctor abroad.

    

10. Release of exchange for studies abroad exceeding the estimate from the institution abroad or US$ 30,000, per academic year, whichever is higher.

     

11. Commission to agents abroad for sale of residential flats/commercial plots in India, exceeding 5% of the inward remittance.

     

12. Short term credit to overseas offices of Indian companies.

     

13. Remittance for advertisement on foreign television by a person whose export earnings are less than Rs.10 lakhs during each of the preceding two years.

     

14. Remittance of royalty and payment of lump-sum fee under the technical collaboration agreement which has not been registered with Reserve Bank.

     

15. Remittance exceeding US$ 100,000/= per project, for any consultancy service procured from outside India

     

16. Remittances for use and/or purchase of trade mark/franchise in India.

     

17. Remittance exceeding US$100,000/=, by an entity in India by way of reimbursement of pre-incorporation expenses.

Part II Release of Foreign Exchange by Authorised Dealers

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A.1 General

(a) For release of foreign exchange to the persons resident in India for travel abroad, authorised dealers should be guided by the Rules made by the Govt. of India under Section 5 of Foreign Exchange Management Act, 1999. In terms of item (b) of Rule 3 of the Govt. Notification No. GSR 381 (E) dated 3rd May 2000, no release of foreign exchange is admissible for travel to Nepal and Bhutan. For release of foreign exchange exceeding certain limits, as specified in Schedule III to the Notification, prior approval of Reserve Bank should be obtained. All applications for release of exchange exceeding the limits prescribed in Schedule III to the Govt. Notification should be referred to the Regional Office of the Exchange Control Department under whose jurisdiction the applicant is functioning/ residing.

(b) In terms of clause (b) of Rule (2) of the Government of India Notification No. GSR. 381(E) dated 3rd May, 2000, "Drawal" includes use of International Credit Cards, International Debit Cards, ATM cards, etc. It is, therefore, clarified that use of these instruments is also subject to the restrictions imposed under the Notification. Further, in terms of clause (h) of Section 2 of Foreign Exchange Management Act, 1999, "currency", inter-alia, includes International Credit Cards. The Reserve Bank has also, vide its Notification No FEMA 15/2000-RB dated 3rd May 2000, notified ATM Cards and Debit Cards as "Currency". Accordingly, payments made by Credit Cards, ATM Cards and Debit Cards etc. being only different methods of payment, all Rules, Regulations made and Directions issued under the Act apply to Credit Cards, ATM Cards, Debit Cards etc. also.

A.2 Sale of Exchange

1. Where permits/ approvals have been issued by the Reserve Bank/ Government of India, foreign exchange may be sold within the period of validity stated on the permit/approval and the sale be endorsed on the reverse of the permit / original approval.

    

2. Authorised dealers need not endorse on the traveller's passport Foreign Exchange sold for travel abroad where the traveller is going abroad for a purpose other than private visit. Wherever foreign exchange is sold for a private visit it should invariably be endorsed on the traveller's passport under the authorised dealer’s stamp, date and signature.

Note:

1. Authorised dealers may , if requested by the traveller, record under their stamp and signature details of foreign exchange sold for travel , other than the private visit abroad .

2. In case of a child travelling on a parent's passport, the endorsement should be made on the joint passport.

3. 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 cheques should be duly maintained.

4. Out of the overall foreign exchange being sold to a traveller, exchange in the form of foreign currency 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, Russian Federation and other Republics of Commonwealth of Independent States	not exceeding US $ 500 or its equivalent
(ii)	Travellers proceeding to Iraq or Libya,	not exceeding US $ 5000 or its equivalent
(iii)	Travellers proceeding to Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States.	Full exchange released

 

5. The forms A2 relating to sale of foreign exchange for travel abroad 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.

A.3. Medical Treatment

A person who has fallen sick after proceeding abroad may also be released foreign exchange for medical treatment outside India in accordance with Rule 5 of Govt. of India Notification No GSR 381(E) dated 3rd May, 2000.

A.4 Cultural Tours

Dance troupes, artistes, etc. who wish to undertake tours abroad for cultural purposes should apply to Ministry of Human Resources Development (Department of Education and Culture), Government of India, for recommendation regarding their foreign exchange requirements. Authorised dealers may release foreign exchange, on the strength of the sanction from the Ministry, 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 foreign exchange for travel outside India for any purpose.

A.6 Follow-up of utilisation of foreign exchange in certain cases

Where an authorised dealer has released exchange on the basis of estimates, e.g. for medical treatment or medical check up abroad etc. the authorised dealer is required to follow-up and ensure that the details of actual expenses are invariably submitted by the applicant to the branch of the authorised dealer which released foreign exchange, within a fortnight of his returning to India. Non-submission of the details within reasonable time should be reported to the Regional Office of Reserve Bank under whose jurisdiction the applicant is residing.

A.7 Period of surrender of foreign exchange

In case the foreign exchange purchased for any purposes is not used for the purposes or for any other purpose for which purchase or acquisition of foreign exchange is permitted under the provisions of FEMA, 1999 or Rules or Regulations made thereunder, the same or the unused portion thereof 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 authorised person for surrendering foreign exchange after 60 days, the authorised person should not refuse to purchase the foreign exchange on the ground that the prescribed period of 60 days has expired.

A.8 Unspent Foreign Exchange

Unspent foreign exchange brought back to India by a traveller should be surrendered to an authorised person against payment in rupees 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 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. However, a returning traveller is also permitted to retain with him , foreign currency travellers cheques and Notes upto an aggregate amount of US $ 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.

Note: Where a person approaches an authorised person for surrender of foreign exchange after the prescribed period authorised person should not refuse to purchase the foreign exchange on the ground that the prescribed period has expired

A.9 Remittances for Tour Arrangements, etc.

1. Authorised dealers may remit foreign exchange upto a reasonable limit, at the request of a traveller towards his hotel accommodation, tour arrangements, etc., in the countries proposed to be visited by him, provided it is out of the foreign exchange purchased by the traveller from an authorised person (including exchange drawn for private travel abroad ) in accordance with the Rules, Regulations and Directions in force.

    

2. Authorised dealers may effect remittances at the request of agents in India who have tie up arrangements with hotels/agents, etc., abroad for providing hotel accommodations or making other tour arrangements for travellers from India provided the authorised dealer is satisfied that the remittance is being made out of the foreign exchange purchased by the concerned traveller from an authorised person (including exchange drawn for private travel abroad) in accordance with the Rules, Regulations and Directions in force.

    

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 accommodations or making other tour arrangements for travellers from India provided :-

1. the credits to the account are by way of depositing

 

1. collections made in foreign exchange from travellers, and

2. refunds received from outside India on account of cancellation of bookings/tour arrangements, etc., and

2. the debits in foreign exchange are for making payments towards hotel accommodation, tour arrangements, etc., outside India, in accordance with (ii) above.

A.10 Payment in Rupees

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 Rs50,000, 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 Rs50,000 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.

A.11 Advance Remittance

Authorised dealers may allow advance remittance for any current account transaction for which the release of foreign exchange is admissible, provided the amount of advance remittance does not exceed US $ 25,000 or its equivalent. Where the amount exceeds US $ 25,000 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 repute situated 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 his obligations under the contract or agreement with the remitter in India.

Part III Release of Foreign Exchange by Full Fledged Money Changers (FFMCs)

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A.1 General

Attention of the Full Fledged Money Changers (FFMCs) is invited to para 4 of AD(MA Series) Circular No.11 dated 16th May 2000 wherein it has been indicated that the directions contained therein shall be applicable, mutatis-mutandis to money changers and they shall continue to be governed by the provisions of FLM/RLM as amended from time to time. In terms of FEMA, 1999, the current regulations stand modified as under :

A.2 Quantum of exchange permitted to be released for the approved purposes

(a) Exchange not exceeding US $ 5000 or its equivalent per person in one calendar year for one or more private visits to any country (except Nepal and Bhutan) as against the quantum of exchange now allowed under BTQ (para 10 of FLM).

(b) Exchange not exceeding US $ 25000 to a person irrespective of period of stay for business travel as against various scales of exchange existing as of now (para 11 of FLM).

A.3 Documentation

The Reserve Bank will not, henceforth, prescribe the documents which should be verified by the Money Changers while releasing foreign exchange. In this connection attention of Money Changers is drawn to sub-section (5) of Section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999) which provides that an authorised person shall before undertaking any transaction in foreign exchange on behalf of any person require that person 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 Act or any rule, regulation, notification, direction or order issued thereunder. Money Changers are advised to keep on record any information/documentation on the basis of which the transaction was undertaken for verification by the Reserve Bank. The said clause further provides that where the said person (applicant) refuses to comply with any such requirement or makes unsatisfactory compliance therewith, the authorised person shall refuse in writing to undertake the transaction and shall if he has reasons to believe that any contravention/evasion is contemplated by the person, report the matter to Reserve Bank.

A. 4 Endorsement on Passport

Where a person is going abroad for business purposes it is not mandatory for authorised persons to endorse the amount of foreign exchange sold for the purpose, on the traveller's passport. Authorised persons may, however, if requested by the traveller, record under their stamp, date and signature details of foreign exchange sold for such travel. Wherever foreign exchange is sold for a private visit it should invariably be endorsed on the traveller's passport under the authorised person’s stamp, date and signature.

A.5 FFMCs shall continue to be governed by all other provisions of FLM.

Foreign Exchange Management Act , 1999 Foreign Travel
A.P. (DIR Series) Circular No.20 (November 16, 2000)

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RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI - 400 001

November 16, 2000

A.P. (DIR Series) Circular No.20
A.P.(F.L .Series) Circular No.2

To
All Authorised Persons in Foreign Exchange

Dear Sirs,

Foreign Exchange Management Act , 1999 : Foreign Travel

Attention of the Full Fledged Money Changers (FFMCs) is invited to paragraph 1 of A.P. (DIR Series) Circular No.1/A.P.(F.L. Series) Circular No.1 dated June 1, 2000 advising them to release foreign exchange not exceeding U.S.$.5,000 or its equivalent , (paragraph 10 of FLM) per person, in one calendar year for one or more private visits and not exceeding U.S.$.25,000 or its equivalent (paragraph 11 of FLM) for business travel to countries other than Nepal and Bhutan.

2. It is advised that where a person is going abroad for business purposes it is not mandatory for authorised persons to endorse the amount of foreign exchange sold for the purpose, on the traveller's passport. Authorised persons may, however, if requested by the traveller, record under their stamp, date and signature details of foreign exchange sold for such travel. Wherever foreign exchange is sold for a private visit it should invariably be endorsed on the traveller's passport under the authorised person’s stamp, date and signature.

3. Authorised persons may bring the contents of this circular to the notice of their constituents concerned.

4. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act 1999 (42 of 1999) and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.

Yours faithfully

K. J. UDESHI

Chief General Manager