Executive Summary:
This circular from the Reserve Bank of India (RBI) informs Authorised Dealers (ADs) about the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015, which supersedes the 2000 regulations. The new regulations, effective December 29, 2015, define the limits for possession and retention of foreign currency. AD Category I banks are instructed to inform their constituents about these changes.
Key Points / Main Content:
* **Possession and Retention Limits:**
* Authorised persons can possess foreign currency and coins without limit within their authorised scope.
* Any person can possess foreign coins without limit.
* Indian residents can retain foreign currency notes, bank notes, and travellers' cheques up to US$2000 (or equivalent) if acquired:
* As payment for services rendered abroad.
* As honorarium or gift from a non-resident visiting India, or for services rendered or lawful obligations settled.
* As honorarium or gift received while visiting abroad.
* As unspent foreign exchange acquired for travel abroad.
* **Non-Permanent Residents:**
* Individuals resident in India but not permanently, may possess foreign currency without limit if it was acquired while they were residing outside India and brought into India according to applicable regulations.
* 'Not permanently resident' means residing for employment of a specified duration (regardless of length) or for a specific job/assignment not exceeding three years.
* **Regulatory Information:**
* The new regulations are notified as Notification No. FEMA. 11R/2015-RB dated December 29, 2015, c.f. G.S.R. No. 1006(E) dated December 29, 2015, and came into effect on December 29, 2015.
* These directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.
Impact Analysis:
* **AD Category I Banks:**
* *Impact:* Must understand and implement the new regulations regarding possession and retention of foreign currency.
* *Action Required:* Inform their constituents about the updated regulations.
* **Authorised Persons:**
* *Impact:* Can possess foreign currency and coins without limit within their authorised scope.
* *Action Required:* Ensure compliance with the regulations.
* **Indian Residents:**
* *Impact:* Subject to specific limits on retaining foreign currency notes, bank notes, and travellers' cheques acquired through specific means.
* *Action Required:* Be aware of and comply with the new limits and conditions for possessing and retaining foreign currency.
* **Non-Permanent Residents:**
* *Impact:* Permitted to possess foreign currency without limit under specific conditions related to when and how the currency was acquired.
* *Action Required:* Ensure compliance with the conditions for possessing foreign currency acquired while residing outside India.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the issuing authority of the circular.
Mumbai, Maharashtra: City in India where the Reserve Bank of India is located.
Foreign Exchange Management Act, 1999: Indian legislation governing foreign exchange transactions and regulations.
Foreign Exchange Management Possession and Retention of Foreign Currency Regulations, 2015: Regulations concerning the possession and retention of foreign currency, which are the subject of this circular.
Authorised Dealers Category I: A category of financial institutions authorized by the Reserve Bank of India to deal in foreign exchange.
Notification No. FEMA. 11R2015RB: Official notification number for the Foreign Exchange Management Possession and Retention of Foreign Currency Regulations, 2015.
B P Kanungo: Principal Chief General Manager at Reserve Bank of India, the signatory of the circular.
US 2000: The maximum amount of foreign currency notes, bank notes, and foreign currency travellers' cheques a person resident in India can retain.
RESERVE BANK OF INDIA
Mumbai - 400 001
RBI/2015-16/312 February 04, 2016
A.P. (DIR Series) Circular No.47/2015-16 [(1)/11(R)]
To
All Category - I Authorised Dealers and Authorised Banks
Madam/ Sir
Foreign Exchange Management (Possession and Retention of Foreign Currency)
Regulations, 2015
Attention of Authorised Dealers (ADs) is invited to Foreign Exchange Management
(Possession and Retention of Foreign Currency) Regulations, 2015 notified vide
Notification No. FEMA. 11(R)/2015-RB dated December 29, 2015, c.f. G.S.R. No.1006
(E) dated December 29, 2015, which supersedes the Foreign Exchange Management
(Possession and Retention of Foreign Currency) Regulations, 2000 and all
amendments thereto.
2. Synopsis of the new regulations is given as under:
A. Following are the limits for possession or retention of foreign currency or foreign
coins, namely :-
i. possession without limit of foreign currency and coins by an authorised person
within the scope of his authority ;
ii. possession without limit of foreign coins by any person;
iii. retention by a person resident in India of foreign currency notes, bank notes and
foreign currency travellers' cheques not exceeding US$ 2000 or its equivalent in
aggregate, provided that such foreign exchange in the form of currency notes,
bank notes and travellers cheques;
a. was 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; orb. was 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
c. was acquired by him by way of honorarium or gift while on a visit to any
place outside India; or
d. represents unspent amount of foreign exchange acquired by him from an
authorised person for travel abroad.
B. A person resident in India but not permanently resident therein may possess
without limit foreign currency in the form of currency notes, bank notes and
travellers cheques, if such foreign currency was acquired, held or owned by him
when he was resident outside India and, has been brought into India in
accordance with the regulations made under the Act.
Explanation: for the purpose of this clause, 'not permanently resident' means a
person resident in India for 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.
3. The new regulations have been notified vide Notification No. FEMA. 11(R)/2015-RB
dated December 29, 2015, c.f. G.S.R. No.1006 (E) dated December 29, 2015 and shall
come into force with effect from December 29, 2015.
4. AD Category- I banks may bring the contents of the circular to the notice of their
constituents concerned.
5. The directions contained in this circular have been issued under Section 10(4) and
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions/ approvals, if any, required under any other law.
Yours faithfully,
(B P Kanungo)
Principal Chief General Manager