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Foreign Exchange Management (Offshore Banking Unit) Regulations, 2002
FEMA
Notification No. 71 dated 7th September 2002
In
exercise of the powers conferred by Section 6, Section 7, Section 8, Section 9
and Section 47 of the Foreign Exchange Management Act, 1999 (Act 42 of 1999) and
all other powers enabling it in this behalf, the Reserve Bank of India makes the
following Regulations, namely:
CHAPTER
I
1.
Short title and commencement:
i.
These Regulations shall be called the Foreign Exchange Management
(Offshore Banking Unit) Regulations, 2002
ii.
They shall come into force from the dated of their publication in the
Official Gazette.
2.
Definitions:
In
these Regulations, unless the context requires otherwise -
i.
�Act� means the Foreign Exchange Management Act, 1999 (Act 42 of
1999);
ii.
�Offshore Banking Unit� means a branch of a bank in India located in
the Special Economic Zone and holds an authorisation issued under clause (a) of
sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949);
iii.
�Regulations� means the Regulations made under the Act;
vi.
�Special Economic Zone� means the Special Economic Zone notified by
the Government of India;
v.
Word and expressions used but not defined in these Regulations shall have
the same meanings respectively assigned to them in the Act.
CHAPTER
II
Part
I
3.
Notwithstanding the status, as an authorised dealer, of the bank setting
up the Offshore Banking Unit, and save as otherwise directed by the Reserve
Bank, the Offshore Banking Unit shall not be regarded as an authorised dealer
for the purpose of the Act, rules or regulations made thereunder.
4.
Save as otherwise provided in these or any other Regulations or directed
by the Reserve Bank, nothing contained in any other Regulation shall apply to an
offshore Banking Unit.
5.
Save as otherwise provided in these Regulations or with the permission of
the Reserve Bank, an Offshore Banking Unit shall not conduct any activity or
undertake any transaction with residents in India.
Part
II
Transactions
which may be undertaken by an Offshore Banking Unit
6.
An Offshore Banking Unit may undertake foreign transactions with any
authorised dealer in India only on principal-to-principal basis.
7.
An Offshore Banking Unit may undertake transaction in foreign change with
a unit located in Special Economic Zone to the extent the latter is eligible to
enter into or undertake such transaction, within the ceilings and subject to the
conditions specified in the Regulations governing such transaction.
8.
Engagement of an Offshore Banking Unit in any of the forms of business
specified in sub-section (1) of section 6 of the Banking Regulation Act, 1949
shall be only in foreign exchange and shall be subject to these Regulations and
the conditions of licence issued under the said Act.
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