## Report on RBI Master Direction Miscellaneous and Amendments
**1. Executive Summary:**
This report analyzes the Reserve Bank of India (RBI) Master Direction - Miscellaneous, specifically focusing on updates made up to November 12, 2018, based solely on the provided text. This Master Direction consolidates instructions and circulars related to foreign exchange management. Key findings include clarifications on remittances to non-residents, repatriation of assets for NRIs returning to India, regulations surrounding resident bank accounts with NRI joint holders, guidelines for routing funds raised abroad, and more. Several amendments aim to align the Master Direction with updated regulations, clarify existing provisions, and address evolving needs in foreign exchange management.
**2. Introduction:**
This report provides an overview of the RBI Master Direction - Miscellaneous based solely on the provided text. The report aims to inform relevant stakeholders of the key components and amendments to this Master Direction, as it pertains to various foreign exchange transactions and regulations.
**3. Policy Overview:**
This report analyzes an *amendment* to the core RBI Master Direction Miscellaneous.
* **Core Objectives (inferred from the provided text):** The core objective of the Master Direction, based on the text, is to consolidate and clarify existing regulations and instructions related to foreign exchange management in India. It aims to provide authorized dealers (Category I banks and authorized banks) with a single reference point for various foreign exchange transactions, ensuring compliance with the Foreign Exchange Management Act (FEMA), 1999.
**4. Background and Rationale:**
The text implies that the amendment is aimed at addressing the following:
* **Alignment with updated regulations:** Adapting the Master Direction to reflect changes in tax laws (specifically regarding remittances to non-residents) and other relevant regulations (like updates to FEMA notifications and Companies Act).
* **Clarification of existing provisions:** Providing clarity on topics like repatriation of income for returning NRIs and permissible transactions under the Liberalized Remittance Scheme (LRS).
* **Addressing emerging needs:** Introducing guidelines for specific scenarios, such as joint accounts with NRI relatives and the routing of funds raised abroad by Indian companies' overseas entities.
* **Incorporation of relevant court directives:** Ensuring compliance with directives from the Supreme Court (Constitution of Special Investigating Team) pertaining to sharing of information.
**5. Key Provisions / Changes:**
This section focuses on the key changes introduced by the amendments to the original policy, as detailed in the provided text.
* **Remittances to Non-Residents:** The RBI clarifies that it will not be issuing instructions under FEMA clarifying tax issues related to remittances to non-residents. Authorised Dealers are now solely responsible for complying with applicable tax laws. The specific impact is that AD banks now need to be fully conversant with prevailing tax laws for remittances to non-residents.
* **Repatriation of Income and Sale Proceeds of Assets Held Abroad by NRIs:** Clarification is provided regarding Section 6(4) of FEMA, allowing residents to hold, own, transfer, or invest in foreign assets acquired while they were non-residents. They can utilize eligible assets abroad and the income from these assets or sale proceeds thereof for payments or investments without RBI approval, as long as the funds come from eligible assets and the transactions comply with FEMA. Additionally, investors can retain and reinvest income earned on investments under LRS.
* **Resident Bank Account Maintained by Residents in India Joint Holder Liberalization:** The change involves permitting resident individuals to include NRI close relatives as joint holders in all types of resident bank accounts (previously just savings accounts) on an "Either or Survivor" basis, subject to conditions. These conditions include the account being treated as a resident account, restrictions on crediting NRI funds to the account, and the NRI operating the account only for the resident's benefit. This expands the permitted use of joint accounts but adds stricter rules.
* **Meeting of Medical Expenses of NRI Close Relatives by Resident Individuals:** This clarifies that payments made by residents for medical expenses of NRI relatives visiting India are covered under "services related thereto" under FEMA regulations. This clarifies that such resident-to-resident transactions related to NRI medical needs fall under specific FEMA regulation, allowing for easier processing.
* **Routing of Funds Raised Abroad to India:** New stipulations are introduced, preventing Indian companies or their AD Category I banks from issuing guarantees or creating contingent liabilities for borrowings by their overseas entities, unless explicitly permitted. Funds raised abroad with such support cannot be used in India unless compliant with FEMA regulations. This aims to restrict the indirect routing of foreign funds into India in violation of FEMA.
* **Constitution of Special Investigating Team Sharing of Information:** Authorised Persons are directed to fully cooperate with the Special Investigation Team (SIT) constituted as per the Supreme Court's directive, by providing all required information and documents. This is a directive to comply with the Supreme Court and ensure transparency with the SIT.
* **Crystallization of Inoperative Foreign Currency Deposits Reserve Bank Depositor Education and Awareness Fund Scheme, 2014:** AD banks are now required to crystallize (convert to INR) inoperative foreign currency deposits after three years. This means AD banks must convert inoperative foreign currency deposits to INR after 3 years and handle these funds according to the Depositor Education and Awareness Fund Scheme.
* **Operational guidelines on International Financial Services Centre IFSC:** A financial institution or a branch of a financial institution set up in the IFSC is treated as a person resident outside India. Therefore, their transaction with a person resident in India will be treated as a transaction between a resident and non resident.
* **Regularisation of assets held abroad by a person resident in India under Foreign Exchange Management Act, 1999:** Clarifies that assets held abroad for which taxes and penalties have been paid under the Black Money Act will not be subject to FEMA proceedings. Permission is not required to dispose of the asset and bring back the proceeds through banking channels within 180 days from the date of declaration.
* **Operating framework for facilitating Outward Remittance services by non bank entities through Authorized Dealer Category I banks in India:** The nonbank entities may obtain specific approval for each tieup arrangement from the Reserve Bank for facilitating outward remittance services through Authorized Dealer Category I banks in India to effect outward remittances.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders affected by these amendments include:
* Authorised Dealer Category I banks and Authorised banks
* Non-Resident Indians (NRIs) and their resident relatives in India
* Indian companies with overseas holding, associate, or subsidiary companies
* Individuals involved in foreign exchange transactions, including outward remittances.
* Non-bank entities facilitating outward remittance services.
**7. Implementation Aspects (Inferred):**
* **Responsible agency/bodies:** The Reserve Bank of India (RBI) is the primary responsible body. Authorised Dealer Category I banks are responsible for implementing the regulations and ensuring compliance.
* **Timelines or procedures:**
* Conversion of inoperative foreign currency deposits: within three years.
* Disposal of assets declared under the Black Money Act and repatriation of proceeds: within 180 days.
* Application to RBI for permission to hold declared assets: within 180 days.
* AD Category I banks need to ensure that each outward remittance transaction is in compliance with the provisions of governing regulations in India.
* **Specific to the Changes:** AD banks need to update their procedures for joint accounts with NRI relatives to reflect the new conditions. They also need to ensure full cooperation with the SIT when requested.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these amendments are:
* **Enhanced regulatory clarity:** Reducing ambiguity in the interpretation of FEMA regulations, especially concerning NRIs and specific transaction types.
* **Improved compliance:** Ensuring better adherence to tax laws and FEMA regulations by Authorised Dealers and other stakeholders.
* **Streamlined processes:** Facilitating legitimate foreign exchange transactions while preventing illicit activities.
* **Greater transparency:** Enhancing cooperation with investigative agencies.
* **Better alignment with international standards:** Adhering to FATF compliance.
* **Facilitation of Outward Remittance services:** This allows non-bank entities to facilitate outward remittances through Authorized Dealer Category I banks in India.
**9. Conclusion:**
The amendments to the RBI Master Direction - Miscellaneous represent a continuous effort by the RBI to refine and update foreign exchange regulations in India. They address specific issues, provide greater clarity, and align with evolving economic and regulatory landscapes. The changes impact a wide range of stakeholders, including banks, NRIs, and Indian companies with international operations. Strict compliance and implementation of these changes are critical to maintaining stability and transparency in the Indian foreign exchange market.
Key Entities Referenced
RBIFED20171814: Reference number for the policy document.
FED Master Direction No. 19201516: Master Direction identifier related to foreign exchange.
January 1, 2016: Original publication date of the Master Direction.
November 12, 2018: Update date of the Master Direction.
September 10, 2018: Update date of the Master Direction.
July 28, 2017: Update date of the Master Direction.
June 16, 2017: Update date of the Master Direction.
All Authorised Dealer Category I banks and Authorised banks: Addressees of the Master Direction.
Reserve Bank of India: The central bank of India, issuer of the Master Direction.
A.P DIR Series Circulars: Series of circulars issued by the Reserve Bank of India.
Authorised Persons: Entities authorized to deal in foreign exchange under FEMA.
Section 11 of the Foreign Exchange Management Act FEMA, 1999: Legal basis for the Reserve Bank of India to issue directions to Authorised Persons.
Foreign Exchange Management Act FEMA, 1999: Indian legislation governing foreign exchange transactions.
Ajay Kumar Misra: Chief General Manager in Charge at Reserve Bank of India.
Master Direction Miscellaneous: Category of the Master Direction.
Central Board of Direct Taxes CBDT: Government agency responsible for direct tax administration.
NRIs: Non-Resident Indians.
Liberalised Remittance Scheme: Scheme allowing resident individuals to remit funds abroad.
Notification No. FEMA 5R2016 RB dated April 01, 2016: Notification related to FEMA regulations.
Section 2 77 of the Companies Act, 2013: Section of the Companies Act defining 'relative'.
FEMA 52000RB dated May 03, 2000: Previous FEMA notification.
NonResident Ordinary Rupee NRO account: Type of bank account for non-resident Indians.
Honble Supreme Court: The Supreme Court of India.
Government of India: The governing body of India.
Special Investigation Team SIT: Team constituted to investigate illegal assets.
Honble Justice M.B. Shah: Chairman of the Special Investigation Team.
Union of India: The federal government of India.
State Government: The governments of the individual states within India.
Reserve Bank Depositor Education and Awareness Fund Scheme, 2014: Scheme by Reserve Bank of India.
International Financial Services Centre IFSC: Jurisdiction providing financial services to non-residents and residents.
Foreign Exchange Management International Financial Services Centre Regulations: Regulations related to IFSC.
Black Money Undisclosed Foreign Income and Assets and Imposition of Tax Act, 2015: Act related to undisclosed foreign income.
Authorized Dealer Category I banks in India: Banks authorized to deal in foreign exchange in India.
KYC AML standards CFT: Know Your Customer Anti-Money Laundering Combating Financing of Terrorism standards.
USD 5000: Transaction limit in USD.
USD 10000: Transaction limit in USD for overseas education.
LRS: Liberalised Remittance Scheme.
FATF: Financial Action Task Force.
Online Payment Gateway Service Providers OPGSP: Service providers for online payment gateways.
AP DIR Series Circular No: Series of circulars issued by the Reserve Bank of India.
RBI/FED/2017-18/14
FED Master Direction No. 19/2015-16 January 1, 2016
(Updated as on November 12, 2018)
(Updated as on September 10, 2018)
(Updated as on July 28, 2017)
(Updated as on June 16, 2017)
To,
All Authorised Dealer Category – I banks and Authorised banks
Madam / Dear Sir,
Master Direction - Miscellaneous
Reserve Bank of India has issued Master Directions consolidating relevant A.P (DIR
Series) Circulars issued so far within the ambit of the relevant regulations, amended
up to date. The circulars/ instructions have been grouped into the Master Directions
on the basis of the classes of transactions they pertain to. Instructions which do not
figure in any of the other Master Directions have been compiled under this Master
Direction. The List of the Circulars is given as an appendix.
2. Within the contours of the Regulations, Reserve Bank of India also issues
directions to Authorised Persons under Section 11 of the Foreign Exchange
Management Act (FEMA), 1999. These directions lay down the modalities as to how
the foreign exchange business has to be conducted by the Authorised Persons with
their customers/ constituents with a view to implementing the regulations framed.
3. It may be noted that, whenever necessary, Reserve Bank shall issue directions to
Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in
the Regulations or the manner in which relative transactions are to be conducted by
the Authorised Persons with their customers/ constituents. The Master Direction
issued herewith shall be amended suitably simultaneously.
Yours faithfully,
(Ajay Kumar Misra)Chief General Manager in Charge
Master Direction - Miscellaneous
1) Remittances to non-residents – Deduction of Tax at Source
On the Central Board of Direct Taxes (CBDT) revising the existing instructions to be
followed while allowing remittances to the non-residents, Reserve Bank of India has
clarified that it will not be issuing instructions under Foreign Exchange Management
Act, 1999 (FEMA), clarifying tax issues. The Authorised Dealers are required to
comply with the requirement of the tax laws, as applicable.
2) Repatriation of income and sale proceeds of assets held abroad by NRIs
who have returned to India for permanent settlement and repatriation of
income and sale proceeds of assets acquired abroad through remittances
under Liberalised Remittance Scheme – Clarification
(a) in terms of sub-section 4 of Section (6) of FEMA, a person resident in India is free
to hold, own, transfer or invest in foreign currency, foreign security or any
immovable property situated outside India if such currency, security or property was
acquired, held or owned by such person when he was resident outside India or
inherited from a person who was resident outside India.
(b) Sub-section 4 of Section (6) of FEMA covers the following transactions:
i. Foreign currency accounts opened and maintained by such a person when he
was resident outside India;
ii. Income earned through employment or business or vocation outside India
taken up or commenced while such person was resident outside India, or from
investments made while such person was resident outside India, or from gift
or inheritance received while such a person was resident outside India;
iii. Foreign exchange including any income arising therefrom, and conversion or
replacement or accrual to the same, held outside India by a person resident in
India acquired by way of inheritance from a person resident outside India.
iv. A person resident in India may freely utilise all their eligible assets abroad as
well as income on such assets or sale proceeds thereof received after their
return to India for making any payments or to make any fresh investments
1abroad without approval of Reserve Bank, provided the cost of such
investments and/ or any subsequent payments received therefor are met
exclusively out of funds forming part of eligible assets held by them and the
transaction is not in contravention to extant FEMA provisions.
(b) an investor can retain and reinvest the income earned on investments made
under the Liberalised Remittance Scheme.
3) Resident bank account maintained by residents in India - Joint holder -
liberalization
Individuals resident in India are permitted to include non-resident Indian (NRI) close
relative (s) (NRI as defined in regulation 2(vi) of 1 Notification No. FEMA 5(R)/2016-
RB dated April 01, 2016 as amended from time to time and relative as defined in 2
Section 2 (77) of the Companies Act, 2013) as a joint holder(s) in 3 all types of
resident bank accounts on “Either or Survivor” basis subject to the following
conditions:
a. Such account will be treated as resident bank account for all purposes and all
regulations applicable to a resident bank account shall be applicable.
b. Cheques, instruments, remittances, cash, card or any other proceeds
belonging to the NRI close relative shall not be eligible for credit to this
account.
c. The NRI close relative shall operate such account only for and on behalf of
the resident for domestic payment and not for creating any beneficial interest
for himself.
d. Where the NRI close relative becomes a joint holder with more than one
resident in such account, such NRI close relative should be the close relative
of all the resident bank account holders.
e. Where due to any eventuality, the non-resident account holder becomes the
survivor of such an account, it shall be categorized as Non-Resident Ordinary
Rupee (NRO) account as per the extant regulations.
1 FEMA 5/2000-RB dated May 03, 2000 has been replaced with FEMA 5(R)/2016-RB dated April 01, 2016.
2 “Section 6 of the Companies Act, 1956” has been replaced with “Section 2(77) of the Companies Act, 2013”
3 “Resident savings account” replaced with “all types of resident bank accounts” as the instructions are
applicable to all types of resident accounts.
2f. Onus will be on the non-resident account holder to keep AD bank informed to
get the account categorized as NRO account and all such regulations as
applicable to NRO account shall be applicable.
g. The above joint account holder facility may be extended to all types of
resident accounts including savings bank account.
While extending this facility the AD bank should satisfy itself about the actual need
for such a facility and also obtain the following declaration duly signed by the non-
resident account holder:
“I am the joint account holder of SB/FD/RD/Current Account bearing No ……. which
stands in my name and in the name of Shri/Smt. ……….. who is my ………. (state
relationship). I hereby undertake that I shall not use the proceeds lying in the above
account for any transaction in contravention of the provisions of the Foreign
Exchange Management Act (FEMA) 1999, Rules/Regulations made thereunder and
the related circulars/instructions issued by the Reserve Bank from time to time. I
further undertake that if any such transaction is put through the said account in
contravention of the FEMA, 1999 or Rules/Regulations made thereunder, I shall be
held responsible for the same. I shall intimate my bank in the event of any change in
my Non-resident / Resident status.”
4) Meeting of Medical expenses of NRI close relatives by Resident Individuals
Where the medical expenses in respect of NRI close relative (NRI as defined in
regulation 2(vi) of 4 Notification No. FEMA 5(R)/2016-RB dated April 01, 2016 , as
amended from time to time and relative as defined in 5Section 2(77) of the
Companies Act, 2013) are paid by a resident individual when the NRI is on a visit to
India, such a payment, although being in the nature of a resident to resident
transaction, will be covered under the term “services related thereto” under
Regulation 2(i) Notification No. FEMA 16/ 2000- RB dated May 3, 2000, ibid.
5) Routing of funds raised abroad to India
(a) Indian companies or their AD Category – I banks are not allowed to issue any
direct or indirect guarantee or create any contingent liability or offer any security in
4 FEMA 5/2000-RB dated May 03, 2000 has been replaced with FEMA 5(R)/2016-RB dated April 01, 2016.
5 “Section 6 of the Companies Act, 1956” has been replaced with “Section 2(77) of the Companies Act, 2013”
3any form for such borrowings by their overseas holding/ associate/ subsidiary/ group
companies except for the purposes explicitly permitted in the relevant Regulations.
(b) Further, funds raised abroad by overseas holding/ associate/ subsidiary/ group
companies of Indian companies with support of the Indian companies or their AD
Category – I banks as mentioned at (i) above cannot be used in India unless it
conforms to the general or specific permission granted under the relevant
Regulations.
(c) Indian companies or their AD Category – I banks using or establishing structures
which contravene the above shall render themselves liable for penal action as
prescribed under FEMA, 1999.
6) Constitution of Special Investigating Team – sharing of information
In pursuance of the Hon’ble Supreme Court Judgment dated July 4, 2011,
Government of India constituted a Special Investigation Team (SIT) under the
Chairmanship of Hon’ble Justice M.B. Shah. In this regard, the Hon’ble Supreme
Court has directed that:
“All organisations, agencies, departments and agents of the State, whether at the
level of the Union of India, or the State Government, including but not limited to all
statutorily formed individual bodies, and other constitutional bodies extend all the
cooperation necessary for the functioning of the Special Investigation Team.
The Union of India and where needed the State Government will facilitate the
conduct of the investigations, in their fullest measures, by the Special Investigation
Team and functioning, by extending all necessary financial, material, legal,
diplomatic and intelligence resources, whether such investigations or portions of
such investigations occur inside the country or abroad.” All Authorised Persons are
advised to ensure that information/ documents required by the SIT are made
available, as and when required.
7) Crystallization of Inoperative Foreign Currency Deposits – Reserve Bank
(Depositor Education and Awareness Fund) Scheme, 2014
With the objective of aligning the instructions in respect of foreign currency accounts
with the Reserve Bank (Depositor Education and Awareness Fund) Scheme, 2014,
Authorised Dealer banks are required to crystallise, that is, convert the credit
4balances in any inoperative foreign currency denominated deposit into Indian Rupee,
in the manner indicated below:
(a) In case a foreign currency denominated deposit with a fixed maturity date
remains inoperative for a period of three years from the date of maturity of the
deposit, at the end of the third year, the authorised bank shall convert the
balances lying in the foreign currency denominated deposit into Indian Rupee
at the exchange rate prevailing as on that date. Thereafter, the depositor shall
be entitled to claim either the said Indian Rupee proceeds and interest
thereon, if any, or the foreign currency equivalent (calculated at the rate
prevalent as on the date of payment) of the Indian Rupee proceeds of the
original deposit and interest, if any, on such Indian Rupee proceeds.
(b) In case of foreign currency denominated deposit with no fixed maturity
period, if the deposit remains inoperative for a period of three years (debit of
bank charges not to be reckoned as operation), the authorised bank shall,
after giving a three month notice to the depositor at his last known address as
available with it, convert the deposit from the foreign currency in which it is
denominated to Indian Rupee at the end of the notice period at the prevailing
exchange rate. Thereafter, the depositor shall be entitled to claim either the
said Indian Rupee proceeds and interest thereon, if any, or the foreign
currency equivalent (calculated at the rate prevalent as on the date of
payment) of the Indian Rupee proceeds of the original deposit and interest, if
any, on such Indian Rupee proceeds.
8) Operational guidelines on International Financial Services Centre (IFSC)
In terms of the Foreign Exchange Management (International Financial Services
Centre) Regulations, a financial institution or a branch of a financial institution set up
in the IFSC and permitted / recognised as such by the Government or a Regulatory
Authority will be treated as person resident outside India. Therefore, their transaction
with a person resident in India will be treated as a transaction between a resident
and non- resident and shall be subject to the provisions of Foreign Exchange
Management Act, 1999 and the Rules/ Regulations/ Directions issued thereunder.
The financial transaction in this context shall mean making or receiving payment,
drawing, issuing or negotiating any bills of exchange or promissory note, transferring
5any security or acknowledging any debt. Similarly, financial service shall mean any
activity which a financial institution is permitted to carry on by the respective Act of
the Parliament or Government of India or any Regulatory Authority empowered to
regulate the concerned financial institution.
9) Regularisation of assets held abroad by a person resident in India under
Foreign Exchange Management Act, 1999
To effectively deal with assets held abroad by persons resident in India in violation of
the Foreign Exchange Management Act, 1999 (FEMA) for which declarations have
been made and taxes and penalties have been paid under the provisions of the
Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act,
2015, it is clarified that:
a) No proceedings shall lie under the Foreign Exchange Management Act,
1999 (FEMA) against the declarant with respect to an asset held abroad for
which taxes and penalties under the provisions of Black Money Act have been
paid.
b) No permission under FEMA will be required to dispose of the asset so
declared and bring back the proceeds to India through banking channels
within 180 days from the date of declaration.
c) In case the declarant wishes to hold the asset so declared, she/ he may
apply to the Reserve Bank of India within 180 days from the date of
declaration if such permission is necessary as on date of application. Such
applications will be dealt by the Reserve Bank of India as per extant
regulations. In case such permission is not granted, the asset will have to be
disposed of within 180 days from the date of receipt of the communication
from the Reserve Bank conveying refusal of permission or within such
extended period as may be permitted by the Reserve Bank and proceeds
brought back to India immediately through the banking channel.
10) Operating framework for facilitating Outward Remittance services by non-
bank entities through Authorized Dealer (Category I) banks in India
The non-bank entities may obtain specific approval for each tie-up arrangement from
the Reserve Bank for facilitating outward remittance services through Authorized
Dealer (Category I) banks in India to effect outward remittances.
6The governing conditions for this arrangement are as under:
1. The Authorized Dealer (Category I) bank through which the service is being
offered shall be responsible for ensuring that each outward remittance
transaction is in compliance with the provisions of governing regulations in India.
2. The said Authorized Dealer (Category I) bank shall be responsible for ensuring
compliance to KYC/ AML standards/ CFT issued by the Reserve Bank.
3. The remittances facilitated under this model shall comprise small value
transactions, not exceeding USD 5000 per transaction, 6except for overseas
education where the limit shall be USD 10000 per transaction. Remittances by
resident individuals will be subject to the limit prescribed under the Liberalised
Remittance Scheme (LRS).
4. Only current account transactions, in the nature of personal remittances, shall be
permitted under this model. The transactions permitted are as follows:
(a) Private Visits,
(b) Remittance by tour operators / travel agents to overseas agents /
principals / hotels,
(c) Business Travel,
(d) Fee for participation in global conferences and specialized training,
(e) Remittance for participation in international events / competitions
(towards training, sponsorship and prize money).
(f) Film shooting,
(g) Medical Treatment abroad,
(h) Disbursement of crew wages,
(i) Overseas Education,
(j) Remittance under educational tie up arrangements with universities
abroad,
(k) Remittance towards fees for examinations held in India and abroad and
additional score sheets for GRE, TOEFL etc.,
6 Inserted with effect from 07.09.2018
7(l) Employment and processing, assessment fees for overseas job
applications,
(m) Emigration and Emigration Consultancy Fees,
(n) Skills/ credential assessment fees for intending migrants,
(o) Visa fees,
(p) Processing fees for registration of documents as required by the
Portuguese/ other Governments,
(q) Registration/ Subscription/ Membership fees to International
Organizations.
5. Trade transactions are permitted subject to limits and other conditions prescribed
for imports under Online Payment Gateway Service Providers (OPGSP)
6. The remittances shall be permitted only for fund transfers from one bank account
to another bank account.
7. Remittances shall be only made to beneficiaries in jurisdictions which are FATF
compliant.
8. The remitting service provider shall be a duly licensed entity by regulator of
destination jurisdictions to facilitate remittances to beneficiaries in such
jurisdictions.
9. The remitter’s moneys should be kept distinct from service provider’s operating
account and such moneys should be duly protected from insolvency risks of the
facilitating service provider. The onus of ensuring the security of the remitters
funds shall be on the Authorized Dealer (Category I) bank.
10. The Authorized Dealer (Category I) bank may submit to the Reserve Bank every
year a certificate stating that the conditions prescribed in the approval are
adhered to.
8Appendix
Sl No Subject AP (DIR Date
Series)
Circular No
1 Remittances to non-residents – Deduction of 151 30.06.2014
Tax at Source:
2 Clarification on section 6(4) of FEMA; 37 19.10.2011
Repatriation of income and sale proceeds of 90 09.01.2014
assets acquired abroad through remittances
under Liberalised Remittance Scheme
3 Resident bank account maintained by 87 09.01.2014
residents in India with NRI close relatives as
Joint holders
4 Resident individuals meeting medical 20 16.09.2011
expenses of NRI close relatives by Resident
Individuals
5 Routing of funds raised abroad to India 41 25.09.2014
6 Sharing of information with Special 18 30.07.2014
Investigating Team
7 Crystallization of Inoperative Foreign 136 28.05.2014
Currency Deposits – Reserve Bank
(Depositor Education and Awareness Fund)
Scheme
8 Operational guidelines on International 92 31.03.2015
Financial Services Centre (IFSC)
9 Regularisation of assets held abroad by a 18 30.09.2015
person resident in India under Foreign
Exchange Management Act, 1999
9