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Date: 20-Dec-2023 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by Section 47 of the Foreign Exchange Management Act, 1999 42 of 1999 and in supersession

Issued by Reserve Bank of India · Foreign Exchange Department

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Executive Summary & Key Takeaways

What it means

  • The gazette notification No. FEMA 14(R)/2023-RB, issued by the Reserve Bank of India, introduces the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023.
  • These regulations govern the methods for receiving and making payments between residents in India and those outside India.
  • The regulations supersede the earlier Notification No. FEMA 14(R)/2016-RB dated May 02, 2016, except for actions taken before this supersession.
  • The regulations came into effect on the date of their publication in the Official Gazette, December 20, 2023.

Key Changes

  • The regulations stipulate that payments between Indian residents and non-residents should generally be conducted through authorized banks or authorized persons.
  • Trade transactions with Nepal and Bhutan can be settled in Indian Rupees, with exceptions for specific export scenarios where the Nepal Rashtra Bank permits foreign currency payments.
  • Trade transactions with ACU (Asian Clearing Union) member countries (excluding Nepal and Bhutan) should occur through the ACU mechanism or as per RBI directives.
  • Trade transactions with countries outside the ACU can be conducted in Indian Rupees or any foreign currency.
  • Non-trade (current account) transactions between Indian residents and non-resident visitors in India must be settled in Indian Rupees.
  • Payments and receipts can be processed through bank accounts opened as per the rules, regulations, or directions issued under the Foreign Exchange Management Act, 1999.

Impact Analysis

Businesses involved in international trade

  • Action Items: Review existing payment procedures, update systems to comply with the new regulations, and communicate changes to relevant departments (e.g., finance, sales, procurement).

Authorized Banks and Authorized Persons

  • Action Items: Update internal processes to reflect the new regulations, train staff on compliance requirements, and ensure systems are capable of handling transactions as per the updated guidelines.

Individuals

  • Action Items: Be aware of the payment restrictions while in India. Use authorized channels for any foreign exchange transactions.

Overseas Investors

  • Action Items: Evaluate and align the payment methods as per the regulations.

Key Entities Referenced

Reserve Bank of India (RBI): The central bank of India, responsible for issuing and regulating foreign exchange management regulations. Foreign Exchange Management Act, 1999: The primary legislation governing foreign exchange management in India. Authorized Bank: A bank authorized to deal in foreign exchange as per the Foreign Exchange Management (Deposit) Regulations, 2016. Authorized Person: An entity authorized by the Reserve Bank to deal in foreign exchange. Asian Clearing Union (ACU): A payment arrangement among some countries in the Asia-Pacific region, aimed at facilitating trade among member countries. Nepal Rashtra Bank: The central bank of Nepal. Central Government: The government of India, responsible for framing the Foreign Trade Policy.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 xxxGIDHxxx सी.जी.-एम.एच.-अ.-21122023-250803 xxxGIDExxx CG-MH-E-21122023-250803 असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 844] नई ददल्ली, बुधर्ार, ददसम्ब र 20, 2023/अग्रहायण 29, 1945 No. 844] NEW DELHI, WEDNESDAY, DECEMBER 20, 2023/AGRAHAYANA 29, 1945 भारतीय ररज़र् वबकैं (जर्देिी मद्रु ा जर्भाग) (केंद्रीय कायालव य) अजधसचू ना मुंबई, 20 ददसम् बर, 2023 जर्देिी मद्रु ा प्रबधं (प्राजि और भगु तान का तरीका) जर्जनयमार्ली, 2023 स.ंफेमा 14 (आर)/2023-आरबी.—जर्देिी मुद्रा प्रबंध अजधजनयम, 1999 (1999 का 42) की धारा 47 द्वारा प्रदत्त िजियों का प्रयोग करत े हुए और ददनाकं 02 मई 2016 की अजधसचू ना स.ं फेमा 14 (आर)/2016-आरबी का अजधक्रमण करत े हुए, इस तरह के अजधक्रमण से पहल े की गई या की िान े र्ाली चीिों को छोड़कर, ररज़र् व बैंक जनम्नजलजखत जर्जनयमार्ली बनाता ह,ै यथा: 1. सजं िि िीर्कव और प्रारंभ- (1) इन जर्जनयमों को जर्देिी मुद्रा प्रबंध (प्राजि और भगु तान का तरीका) जर्जनयमार्ली, 2023 कहा िाएगा। (2) र् ेसरकारी रािपत्र में उनके प्रकािन की तारीख से लागू होंगे। 2. पररभार्ाएँ (1) इन जर्जनयमों में, िब तक दक संदभ वसे अन्यथा अपेजित न हो, - i. 'अजधजनयम' का अथव ह ैजर्देिी मुद्रा प्रबंध अजधजनयम, 1999 (1999 का 42); ii. 'प्राजधकृत बैंक' का अथ व र्ही ह ै िो जर्देिी मुद्रा प्रबंध (िमा) जर्जनयमार्ली- 2016, समय-समय पर यथासंिोजधत, में ददया गया ह।ै 7835 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] (2) इन जर्जनयमों में प्रयुि दकन्तु पररभाजर्त नहीं दकए गए िब्दों और अजभव्यजियों के र्ही अथव होंगे िैसे उि अजधजनयम म ेंह।ैं 3. प्राजि और भगु तान का तरीका- (1) अजधजनयम या उसके अंतगवत बनाए गए जनयमों या जर्जनयमों अथर्ा िारी दकए गए जनदेिों में अन्यथा उपबंजधत दकसी तरीके को छोड़कर, भारत में जनर्ासी कोई भी व्यजि भारत के बाहर जनर्ासी व्यजि को न तो भुगतान करेगा और न ही उससे भुगतान प्राि करेगा: बिते, ररज़र्व बैंक भारत म ें जनर्ासी व्यजि से आर्ेदन प्राि होने पर उसे भुगतान करने या प्राि करन े की अनुमजत उि अजधजनयम के तहत दे सकता ह।ै (2) भारत में जनर्ासी व्यजि और भारत के बाहर जनर्ासी व्यजि के बीच प्राजि और भुगतान, दकसी प्राजधकृत बैंक अथर्ा प्राजधकृत व्यजि के माध्यम से और नीच े जनर्दष्टव तरीके से दकया िाएगा, िब तक दक अन्यथा उपबंध न दकया गया हो: (I) व्यापाररक लने दने - (क) जनम्नजलजखत देिों को पात्र र्स्ट्तओंु और सेर्ाओं के जनयावत अथर्ा उनसे आयात के बदले प्राजि/ भुगतान जनम्नानुसार दकया िाएगा: (i) नपे ाल और भटू ान - भारतीय रुपये म,ें बिते भारत से जनयावत के मामले में िहां नेपाल में जस्ट्थत आयातक को नेपाल राष्ट्र बैंक द्वारा जर्देिी मद्रु ा में भुगतान करने की अनुमजत प्रदान की गयी हो, उि जनयावत की राजि के बदल े इस प्रकार की प्राजियाँ जर्देिी मुद्रा में हो सकती ह;ैं (ii) नपे ाल और भटू ान को छोड़कर एसीय ू के सदस्ट्य दिे - एसीयू तंत्र के माध्यम से अथर्ा ररज़र्व बैंक द्वारा समय- समय पर प्राजधकृत व्यापाररयों को िारी दकए गए जनदेिों के अनुसार: बिते, आयातों के मामल े म,ें िब एसीयू के सदस्ट्य देि (नेपाल और भूटान के अलार्ा) से माल भारत भेिा िाता ह,ै लेदकन आपूर्तवकताव एसीयू के सदस्ट्य देिों से जभन्न दकसी देि का जनर्ासी ह,ै तब भुगतान नीचे (iii) में जनर्दष्टव तरीके से दकया िाए। (iii) एसीय ूके सदस्ट्य देिों स ेजभन्न दिे – भारतीय रुपय ेमें या दकसी जर्देिी मुद्रा में। (ख) इस उप-जर्जनयम में जनजहत दकसी बात के बार्ज़ूद, प्राजियां और भुगतान केन्द्र सरकार द्वारा बनाई गई मौिूदा जर्देि व्यापार नीजत में दकए िाने र्ाले प्रार्धानों के अनुसार भी दकए िा सकत े ह।ैं स्ट्पष्टीकरण: 'एसीयू' (एजियाई समािोधन संघ) िब्द का र्ही अथव होगा िैसा एसीयू करार के अनुच्छेद 1 में ददया गया ह ैऔर एसीयू-तंत्र का अथव भी उसी के अनरूु प लगाया िाएगा। (II) व्यापाररक लने दने स ेजभन्न लने देन - प्राजि और भुगतान जनम्नानुसार दकया िाएगा- (i) नपे ाल और भटू ान - भारतीय रुपये म,ें बिते भूटान म ेंदकए गए पारदेिीय जनर्ेि के मामले में भगु तान जर्देिी मुद्रा में भी दकया िा सकता ह;ै (ii) अन्य देि - भारतीय रुपये या दकसी जर्देिी मुद्रा में। (3) भारत म ें जनर्ासी व्यजि और भारत के बाहर जनर्ासी व्यजि, िो भारत की यात्रा पर आया हो, के बीच व्यापाररक लेनदेन से जभन्न दकसी भी चालू खाता लेनदेन के जलए भारत में भगु तान या प्राजि केर्ल भारतीय रुपय े में की िा सकती ह।ै बिते, जर्जनयम 3 के अतं गतव कोई भी भुगतान या प्राजि उि अजधजनयम के अंतगवत बनाए गए जनयमों, जर्जनयमों या िारी जनदेिों के अनुसार खोले गए दकसी बैंक खात े में डेजबट/ क्रेजडट के माध्यम से भी दकया िा सकता ह।ै डॉ. आददत्य गेहा, प्रभारी मुख्य महाप्रबंधक [जर्ज्ञापन-III/4/असा./626/2023-24][भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3 RESERVE BANK OF INDIA (Foreign Exchange Department) (CENTRAL OFFICE) NOTIFICATION Mumbai, the 20th December, 2023 Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 No. FEMA 14(R)/2023-RB.In exercise of the powers conferred by Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in supersession of Notification No. FEMA 14(R)/2016-RB dated May 02, 2016, except as respects things done or omitted to be done before such supersession, the Reserve Bank makes the following regulations, namely: 1. Short title and commencement. - (1) These regulations shall be called the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023. (2) They shall come into force on the date of their publication in the Official Gazette. 2. Definitions. - (1) In these regulations, unless the context otherwise requires,- i. 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999); ii. 'Authorised Bank' shall have the same meaning as given in the Foreign Exchange Management (Deposit) Regulations, 2016 as amended from time to time. (2) The words and expressions used but not defined in these regulations shall have the same meanings respectively assigned to them in the Act. 3. Manner of receipt and payment. – (1) Save as otherwise in a manner as provided in the Act or the rules or regulations made or directions issued under the Act, no person resident in India shall make or receive payment from a person resident outside India: Provided that the Reserve Bank may, on an application made to it, permit a person resident in India to make or receive payment under the Act. (2) The receipt and payment between a person resident in India and a person resident outside India shall, unless provided otherwise, be made through an Authorised Bank or Authorised Person and in the manner as specified below: (I) Trade transactions - (a) receipt/payment for export to or import from the countries given below of eligible goods and services shall be made as under: (i) Nepal and Bhutan - in Indian Rupees provided that in case of exports from India where the importer in Nepal has been permitted by the Nepal Rashtra Bank to make payment in foreign currency, such receipts towards the amount of the export may be in foreign currency; (ii) Member countries of ACU, other than Nepal and Bhutan - through ACU mechanism or as per the directions issued by the Reserve Bank to authorised dealer from time to time: Provided that in case of imports where the goods are shipped to India from a member country of the ACU (other than Nepal and Bhutan) but the supplier is resident of a country other than a member country of the ACU, the payment may be made in a manner as specified at (iii) below. (iii) Countries other than member countries of ACU - In Indian Rupees or in any foreign currency. (b) Notwithstanding anything contained in this sub-regulation, receipts and payments may also be made in a manner as may be provided in the extant Foreign Trade Policy framed by the Central Government. Explanation: The expression ‘ACU’ (Asian Clearing Union) shall have the same meaning assigned to it under Article I of the ACU agreement and the ACU mechanism shall be construed accordingly. (II) Transactions other than trade transactions - receipt and payment shall be made as under: (i) Nepal and Bhutan - In Indian Rupees provided that in case of overseas investment in Bhutan, payment may also be made in foreign currency; (ii) Other Countries – In Indian Rupees or any foreign currency.4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] (3) Payment and receipt in India for any current account transaction, other than a trade transaction, between any person resident in India and a person resident outside India, who is on a visit to India, may be made only in Indian Rupees. Provided that any payment or receipt under regulation 3 may also be made by debit/ credit to a bank account maintained in terms of the rules, regulations or directions issued under the Act. Dr. ADITYA GAIHA, Chief General Manager-in-Charge [ADVT.-III/4/Exty./626/2023-24] Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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