Exchane Control - - Foreign Exchange Management (Current Account Transactions) Rules 2000
[Source: G.S.R.381(E), May 3, 2000 (as amended by Notification S.O.301(E) dated March 30,2001, GSR 831(E) dated December 17,2002,GSR.397(E) dated May 1,2003 and GSR.731 (E) dated September 5,2003)

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 public interest, makes the following rules, namely :--

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.

"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;

Prohibition on drawal of Foreign Exchange (Rule 3)
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 terms and conditions as it may consider necessary to stipulate by special or general order.

Prior approval of Govt. of India.(Rule 4
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) and Resident Foreign Currency (Domestic) Account of the remitter

Prior approval of Reserve Bank. (Rule 5)
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) and Resident Foreign Currency (Domestic) Account of the remitter.

Rule 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.

Use of International Credit Card while outside India
Nothing contained in Rule 5 shall apply to the use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India. However, the restrictions on the use of the card for prohibited items will continue.

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, except commission upto 10% of invoice value of exports of tea and tobacco.

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 III
(See Rule 5)

1. Deleted

2. Release of exchange exceeding USD 10,000 or its equivalent in one calendar year, for one or more private visits to any country (except Nepal and Bhutan).

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

4. Donation exceeding USD 5000 per remitter/donor per annum.

5. Exchange facilities exceeding USD 100,000 for persons going abroad for employment.

6. Exchange facilities for emigration exceeding USD 100,000 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 –

      1. is a citizen of a foreign State other than Pakistan; or

      2. 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.

   2. exceeding 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.

8. Release of foreign exchange, exceeding 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.

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 USD 100,000, per academic year, whichever is higher.

11. Commission to agents abroad for sale of residential flats/ commercial plots in India, exceeding USD 25,000 or 5% of the inward remittance per transaction, whichever is higher.

12. Deleted

13. Deleted

14. Deleted

15. Remittance exceeding USD 1,000,000 per project, for any consultancy service procured from outside India.

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

17. Remittance exceeding USD 100,000 by an entity in India by way of reimbursement of pre-incorporation expenses.

18. Deleted