**Policy Summary: Amendment to Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016**
This notification, issued by the Reserve Bank of India (RBI), Foreign Exchange Department, Central Office, Mumbai, on November 13, 2019, introduces amendments to the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016. The notification number is FEMA 14R/2019-RB.
The amendments, enacted under the authority of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), primarily concern the inclusion of Special Non-Resident Rupee (SNRR) accounts in permissible methods of payment and receipt for international transactions.
Key changes include:
* **Definition of SNRR Account:** Insertion of a definition for "SNRR account," referencing sub-regulation (4) of regulation 5 of the Foreign Exchange Management (Deposit) Regulations, 2016.
* **Permissible Methods of Receipt:** Modification of regulation 4(1)(ii) to include debiting of SNRR accounts maintained by persons resident outside India (overseas buyers) with Authorised Dealers or Authorised Banks in India, as specified in Foreign Exchange Management (Deposit) Regulations, 2016, as a valid method of receiving payment.
* **Receipt in Rupees from SNRR Accounts:** Insertion of regulation 4(3) allowing for receipt of payment in rupees by a person resident in India from an SNRR account of a person resident outside India, provided that the underlying transactions comply with the Foreign Exchange Management Act, 1999, and associated rules and regulations.
* **Permissible Methods of Payment:** Modification of regulation 6(2) to include crediting SNRR accounts maintained by persons resident outside India (overseas sellers) with Authorised Dealers or Authorised Banks in India for imports into India, as specified in Foreign Exchange Management (Deposit) Regulations, 2016, as a valid method of making payment.
* **Payment in Rupees to SNRR Accounts:** Insertion of regulation 6(2)(v) allowing for payment in rupees to an SNRR account of a person resident outside India, provided that the underlying transactions comply with the Foreign Exchange Management Act, 1999, and associated rules and regulations.
These regulations take effect from the date of their publication in the Official Gazette. The principal regulations were initially published under G.S.R. 480(E) on May 3, 2016.
For further information, contact Ajay Kumar Misra, Chief General Manager-in-Charge, Reserve Bank of India.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the foreign exchange market.
Foreign Exchange Management Act, 1999: An act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Foreign Exchange Management Manner of Receipt and Payment Regulations, 2016: Regulations issued by the Reserve Bank of India pertaining to the manner of receipt and payment in foreign exchange.
Foreign Exchange Management Manner of Receipt and Payment Amendment Regulations, 2019: An amendment to the Foreign Exchange Management Manner of Receipt and Payment Regulations, 2016.
SNRR account: Special Non-Resident Rupee account, a type of account maintained by a person resident outside India.
Foreign Exchange Management Deposit Regulations, 2016: Regulations pertaining to deposits in foreign exchange.
FCNR account: Foreign Currency Non-Resident account
NRE account: Non-Resident External account
RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
Notification No. FEMA 14(R)/(1)/2019-RB November 13, 2019
Foreign Exchange Management (Manner of Receipt and Payment) (Amendment) Regulations, 2019
In exercise of the powers conferred by Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the
Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Manner of Receipt
and Payment) Regulations, 2016 (Notification No. FEMA 14 (R)/2016-RB dated May 02, 2016) (hereinafter referred
to as 'the Principal Regulations'), namely:-
1. Short title and commencement.
(i) These Regulations may be called the Foreign Exchange Management (Manner of Receipt and Payment)
(Amendment) Regulations, 2019.
(ii) They shall come into effect from the date of their publication in the Official Gazette.
2. In the Principal Regulations:
(a) in regulation 2, after clause (iv), the following new clause shall be inserted, namely, :-
(v) ‘SNRR account’ means a Special Non- Resident Rupee account referred to in sub. regulation (4) of
regulation 5 of Foreign Exchange Management (Deposit) Regulations, 2016.
(b) in regulation 4,
(i) in sub. regulation (1), for clause (ii), the following shall be substituted, namely:
“by debit to FCNR/ NRE/ SNRR account maintained by a person resident outside India
(overseas buyer) with an Authorised Dealer or an Authorised Bank in India, as specified in
Foreign Exchange Management (Deposits) Regulations, 2016;”
(ii) after sub. regulation (2), the following new sub. regulation shall be inserted, namely:
“(3) Payment may also be received in rupees by a person resident in India from SNRR
Account of person resident outside India after ensuring that the underlying transactions are
in conformity with the provisions of the Foreign Exchange Management Act, 1999 and the
rules, regulations and directions issued thereunder.”
(c) in regulation 6,
(i) in sub. regulation (2), after clause (iii), the following new clauses shall be inserted,
namely:
“(iv) by credit to SNRR account maintained by a person resident outside India (overseas
seller) with an Authorised Dealer or an Authorised Bank in India for imports into India, as
specified in Foreign Exchange Management (Deposit) Regulations, 2016.(v) in rupees to SNRR account of the person resident outside India after ensuring that the
underlying transactions are in conformity with the provisions of the Foreign Exchange
Management Act, 1999 and the rules, regulations and directions issued thereunder.”
(Ajay Kumar Misra)
Chief General Manager -in-Charge
Foot Note: The Principal Regulations were published in the Official Gazette vide No. G.S.R. 480(E) dated May 3,
2016 and subsequently amended as under
No. FEMA 14(R)/(1)/2019-RB dated November 13, 2019