Executive Summary:
This circular from the Reserve Bank of India introduces the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2015, which supersedes the 2000 regulations. The regulations outline the duties of Indian residents concerning foreign exchange realisation and repatriation, as well as timelines for surrendering foreign exchange to authorised persons. The regulations came into effect on December 29, 2015.
Key Points / Main Content:
Duty to Realise Foreign Exchange:
* Residents in India must take reasonable steps to realise and repatriate foreign exchange due to them, avoiding actions that delay or prevent its receipt.
Manner of Repatriation:
* Realised foreign exchange must be brought into India and sold to an authorised person for rupees.
* Alternatively, it can be held in an account with an authorised dealer or used to discharge foreign exchange denominated debt, as specified by the Reserve Bank.
* Receiving rupee payment in India from a bank or exchange house outside India via an authorised dealer is considered repatriation.
Surrender Periods (Non-Individuals):
* Foreign exchange earned as remuneration, settlement of obligations, income on assets, inheritance, or gifts must be sold to an authorised person within seven days of receipt.
* In all other cases, the surrender period is ninety days from the date of receipt.
Surrender Periods (Unused Foreign Exchange - Non-Individuals):
* If foreign exchange acquired for a specific purpose is not used, it must be surrendered to an authorised person within sixty days of acquisition.
* For foreign travel, unspent currency notes and coins must be surrendered within ninety days, and traveller's cheques within one hundred eighty days from the date of return to India.
Surrender Periods (Resident Individuals):
* Received, realised, unspent, or unused foreign exchange (including currency notes, coins, and traveller's cheques) must be surrendered to an authorised person within 180 days from the date of receipt, realisation, purchase, acquisition, or date of return to India.
Exemption:
* These regulations do not apply to the currencies of Nepal and Bhutan.
Impact Analysis:
Authorised Dealers (AD Category I Banks):
* Impact: Need to understand and implement the new regulations related to foreign exchange realisation, repatriation, and surrender.
* Action Required: Bring the contents of this circular to the notice of their concerned constituents.
Indian Residents (Individuals and Non-Individuals):
* Impact: Subject to new regulations regarding the realisation, repatriation, and surrender of foreign exchange.
* Action Required: Comply with the specified timelines and procedures for realising, repatriating, and surrendering foreign exchange.
Authorised Persons:
* Impact: Responsible for handling the surrender of foreign exchange from residents and adhering to the new regulations.
* Action Required: Implement necessary procedures to comply with the regulations for accepting surrendered foreign exchange.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector and managing foreign exchange.
Mumbai, Maharashtra: The city in India where the Reserve Bank of India is located.
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 Realisation, repatriation and surrender of foreign exchange Regulations, 2015: Regulations pertaining to the management of foreign exchange, specifically concerning realisation, repatriation, and surrender, as notified by the Reserve Bank of India.
Authorised Dealers: Entities authorized by the Reserve Bank of India to deal in foreign exchange.
A.P. DIR Series: A series of circulars issued by the Reserve Bank of India related to Authorised Person Directions.
Nepal: A country in South Asia bordering India, mentioned in the context of foreign exchange regulations.
Bhutan: A country in South Asia bordering India, mentioned in the context of foreign exchange regulations.
RESERVE BANK OF INDIA
Mumbai - 400 001
RBI/2015-16/311 February 04, 2016
A.P. (DIR Series) Circular No.46/2015-16 [(1)/9(R)]
To
All Category - I Authorised Dealers and Authorised Banks
Madam/ Sir
Foreign Exchange Management (Realisation, repatriation and surrender of
foreign exchange) Regulations, 2015
Attention of Authorised Dealers (ADs) is invited to Foreign Exchange Management
(Realisation, repatriation and surrender of foreign exchange) Regulations, 2015
notified vide Notification No. FEMA. 9(R)/2015-RB dated December 29, 2015, c.f.
G.S.R. No.1005(E) dated December 29, 2015, which supersedes the Foreign
Exchange Management (Realisation, repatriation and surrender of foreign exchange)
Regulations, 2000 and all amendments thereto.
2. Synopsis of the new regulations is given as under:
A. Duty of persons to realise foreign exchange due:-
A person resident in India to whom any amount of foreign exchange is due or has
accrued shall, save as otherwise provided under the provisions of the Act, or the
rules and regulations made thereunder, or with the general or special permission
of the Reserve Bank, take all reasonable steps to realise and repatriate to India
such foreign exchange, and shall in no case do or refrain from doing anything, or
take or refrain from taking any action, which has the effect of securing -
(a) that the receipt by him of the whole or part of that foreign exchange is delayed;
or
(b) that the foreign exchange ceases in whole or in part to be receivable by him.
B. Manner of Repatriation :-
(1) On realisation of foreign exchange due, a person shall repatriate the same to
India, namely bring into, or receive in, India and -(a) sell it to an authorised person in India in exchange for rupees; or
(b) retain or hold it in account with an authorised dealer in India to the extent
specified by the Reserve Bank; or
(c) use it for discharge of a debt or liability denominated in foreign exchange to
the extent and in the manner specified by the Reserve Bank.
(2) A person shall be deemed to have repatriated the realised foreign exchange to
India when he receives in India payment in rupees from the account of a bank or
an exchange house situated in any country outside India, maintained with an
authorised dealer.
C. Period for surrender of realised foreign exchange:-
A person not being an individual resident in India shall sell the realised foreign
exchange to an authorised person, within the period specified below :-
i) foreign exchange due or accrued as remuneration for services rendered,
whether in or outside India, or in settlement of any lawful obligation, or an
income on assets held outside India, or as inheritance, settlement or gift, within
seven days from the date of its receipt;
ii) in all other cases within a period of ninety days from the date of its receipt.
D. Period for surrender in certain cases:-
(1) Any person not being an individual resident in India who has acquired or
purchased foreign exchange for any purpose mentioned in the declaration made
by him to an authorised person under sub-section (5) of Section 10 of the Act does
not use it for such purpose or for any other purpose for which purchase or
acquisition of foreign exchange is permissible under the provisions of the Act or
the rules or regulations or direction or order made thereunder, shall surrender
such foreign exchange or the unused portion thereof to an authorised person
within a period of sixty days from the date of its acquisition or purchase by him.
(2) Notwithstanding anything contained in sub-regulation (1), where the foreign
exchange acquired or purchased by any person not being an individual resident in
India from an authorised person is for the purpose of foreign travel, then, the
unspent balance of such foreign exchange shall, save as otherwise provided in the
regulations made under the Act, be surrendered to an authorised person -(i) within ninety days from the date of return of the traveller to India, when the
unspent foreign exchange is in the form of currency notes and coins; and
(ii) within one hundred eighty days from the date of return of the traveller to India,
when the unspent foreign exchange is in the form of travellers cheques.
E. Period for surrender of received/realised/unspent/unused foreign exchange
by Resident individuals.-
A person being an individual resident in India shall surrender the received/ realised/
unspent/ unused foreign exchange whether in the form of currency notes, coins and
travellers cheques, etc. to an authorised person within a period of 180 days from the
date of such receipt/ realisation/ purchase/ acquisition or date of his return to India,
as the case may be.
F. Exemption:-
Nothing in these regulations shall apply to foreign exchange in the form of
currency of Nepal or Bhutan.
3. The new regulations have been notified vide Notification No. FEMA. 9(R)/2015-RB
dated December 29, 2015, c.f. G.S.R. No.1005 (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 Sections 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