Master Circular No.01/2011-12
July 1, 2011
All Authorised Persons in Foreign Exchange
Madam / Sir,
Master Circular on Miscellaneous Remittances from India –
Facilities for Residents
Miscellaneous remittance facilities for residents are allowed in terms of
section 5 of the Foreign Exchange Management Act, 1999, read with Government of
India Notification No. G.S.R 381(E) dated May 3, 2000, as amended from time to
- This Master Circular consolidates the existing instructions on the subject of
';Miscellaneous Remittances from India - Facilities for Residents'; at one
place. The list of underlying circulars/notifications consolidated in this
Master Circular is furnished in Appendix-1.
- This Master Circular is being issued with a sunset clause of one year. This
circular will stand withdrawn on July 1, 2012 and be replaced with an updated
Master Circular on the subject.
Chief General Manager-in-Charge
Release of Foreign Exchange by Authorised Dealers
1.1 For release of foreign exchange to persons resident in India for various
current account transactions, Authorised Dealer banks are to be guided by the
Rules made by the Government of India under Section 5 of the Foreign Exchange
Management Act, 1999 (as indicated in item 1 of Appendix 2)which are detailed in
the Foreign Exchange Management (Current Account Transactions) Rules, 2000
(Annex-1) notified by the Government of India vide Notification No. G.S.R.381
(E) dated 3rd May 2000 (Rules). In terms of the said Rules, drawal of foreign
exchange for certain categories of transactions as listed in Schedule I is
expressly prohibited. Exchange facilities for transactions included in Schedule
II to the Rules may be permitted by the Authorised Dealer banks provided the
applicant has secured the approval from the Ministry/Department of the
Government of India as specified therein. In respect of transactions included in
Schedule III, prior approval of the Reserve Bank would be required for
remittance exceeding the specified limits. The release of foreign exchange up to
the threshold ceilings specified in Schedule III stands delegated to the
Authorised Dealer banks. All applications for release of foreign exchange
exceeding the limits as prescribed in Schedule III to the Rules should be
referred to the Regional Office concerned of the Foreign Exchange Department of
the Reserve Bank, under whose jurisdiction the applicant is functioning /
1.2 “Drawal” of foreign exchange also includes use of International Credit Cards
(ICC), International Debit Cards (IDC), ATM cards, etc. “Currency”, interalia,
includes ICC, IDC and ATM Cards. Accordingly, all Rules, Regulations made and
Directions issued under the Act apply to the use of ICC, IDC and ATM Cards.
1.3 In order to provide adequate foreign exchange facilities and efficient
customer service, the Reserve Bank has decided to grant licences to certain
entities by authorising them as Authorised Dealer – Category II to undertake a
range of non-trade current account transactions. Accordingly, Authorised Dealer
– Category II are authorised to release / remit foreign exchange for the
following non-trade current account transactions:
- Private visits,
- Remittance by tour operators / travel agents to overseas agents / principals
- Business travel,
- Fee for participation in global conferences and specialized training,
- Remittance for participation in international events / competitions (towards
training, sponsorship and prize money),
- Film shooting,
- Medical treatment abroad,
- Disbursement of crew wages,
- Overseas education,
- Remittance under educational tie up arrangements with universities abroad,
- Remittance towards fees for examinations held in India and abroad and
additional score sheets for GRE, TOEFL, etc.
- Employment and processing, assessment fees for overseas job applications,
- Emigration and emigration consultancy fees,
- Skills / credential assessment fees for intending migrants,
- Visa fees,
- Processing fees for registration of documents as required by the Portuguese
/ other Governments, registration / subscription / membership fees to
1.4 Release of foreign exchange is not admissible for travel to and transaction
with residents of Nepal and Bhutan. (cf. Clause (b) of Rule 3 of the Rules (as
indicated in item 2 of Appendix 2).
A.2 Sale of Exchange
2.1 Authorised Persons may release foreign exchange for travel purposes on the
basis of a declaration given by the traveller regarding the amount of foreign
exchange availed of during the financial year.
2.2 In case of issue of travellers cheques, the traveller should sign the
cheques in the presence of an authorised official and the purchaser’s
acknowledgement for receipt of the travellers cheques should be held on record.
2.3 Out of the overall foreign exchange being sold to a traveller, exchange in
the form of foreign currency notes and coins may be sold up to the limit
- Travellers proceeding to countries other than Iraq, Libya, Islamic Republic
of Iran, Russian Federation and other Republics of Commonwealth of Independent
States - not exceeding USD 3000 or its equivalent.
- Travellers proceeding to Iraq or Libya - not exceeding USD 5000 or its
- Travellers proceeding to Islamic Republic of Iran, Russian Federation and
other Republics of Commonwealth of Independent States - full exchange may be
2.4 The form A2 relating to sale of foreign exchange should be retained for a
period of one year by the Authorised Persons, together with the related
documents, for the purpose of verification by their Internal Auditors. However,
in respect of remittance applications for miscellaneous non-trade current
account transactions of amount not exceeding USD 5,000, Authorised Dealers may
obtain simplified Application-cum-Declaration form (Form A2) as shown at Annex
2.5 In cases where the remittances are allowed on the basis of self declaration,
the onus of furnishing the correct details in the application will remain with
the applicant who has certified the details relating to the purpose of such
A.3 Medical Treatment
3.1 With a view to enable residents to avail of foreign exchange for medical
treatment abroad without any hassles and any loss of time, Authorised Dealers
may release foreign exchange up to an amount of USD 100,000 or its equivalent,
on the basis of self declaration that the applicant is buying exchange for
medical treatment outside India, without insisting on any estimate from a
3.2 For amount exceeding the above limit, estimate from the doctor in India or
hospital/ doctor abroad, is required to be submitted to the Authorised Dealers.
3.3 A person who has fallen sick after proceeding abroad may also be released
foreign exchange by an Authorised Dealer for medical treatment outside India.
A.4 Cultural Tours
Dance troupes, artistes, etc., who wish to undertake tours abroad for cultural
purposes should apply to the Ministry of Human Resources Development (Department
of Education and Culture), Government of India, for their foreign exchange
requirements. Authorised Dealers may release foreign exchange, on the strength
of the sanction from the Ministry concerned, to the extent and subject to
conditions indicated therein.
A.5 Private Visits
Foreign exchange for private visit can also be released to a person who is
availing of foreign exchange for travel outside India for any purpose up to the
limits specified in Schedule III to the Rules.
A.6 Business Visits
Foreign exchange may be released for undertaking business travel or attending a
conference or specialised training or for maintenance expenses of a patient
going abroad for medical treatment or check up abroad or for accompanying as
attendant to a patient going abroad for medical treatment / check up to the
limits specified in Schedule III to the Rules.
A.7 Period of surrender of foreign exchange
7.1 In case the foreign exchange purchased for a specific purpose is not
utilized for that purpose, it could be utilized for any other eligible purpose
for which drawal of foreign exchange is permitted under the relevant Rules /
7.2 General permission is available to any resident individual to surrender
received / realised / unspent / unused foreign exchange to an Authorised Person
within a period of 180 days from the date of receipt / realisation / purchase /
acquisition / date of return of the traveller, as the case may be.
7.3 The liberalized uniform time limit of 180 days is applicable only to
resident individuals and in areas other than export of goods and services.
7.4 In all other cases, the regulations / directions on surrender requirement
shall remain unchanged. (cf. Notification No. FEMA 9/2000-RB dated May 3, 2000,
as amended from time to time).
A.8 Unspent Foreign Exchange
8.1 As stated above, unspent foreign exchange brought back to India by a
resident individual should be surrendered to an Authorised Person within 180
days from the date of return of the traveller. Exchange so brought back can be
utilized by the individual for his/her subsequent visit abroad.
8.2 However, a returning traveller is permitted to retain with him, foreign
currency travellers cheques and currency notes up to an aggregate amount of USD
2000 and foreign coins without any ceiling beyond 180 days. (cf. Notification
No. FEMA 11/2000-RB dated May 3, 2000). Foreign exchange so retained, can be
utilized by the traveller for his subsequent visit abroad.
8.3 A person resident in India can open, hold and maintain with an Authorised
Dealer in India, a Resident Foreign Currency (Domestic) Account, out of foreign
exchange acquired in the form of currency notes, bank notes and travellers
cheques from any of the sources like, payment for services rendered abroad, as
honorarium, gift, services rendered or in settlement of any lawful obligation
from any person not resident in India.
8.4 The account may also be opened / credited with foreign exchange earned
abroad, including proceeds of export of goods and/or services, royalty,
honorarium, etc., and/or gifts received from close relatives (as defined in the
Companies Act) and repatriated to India through normal banking channels by
8.5 The eligible credits to the Resident Foreign Currency (Domestic) Account,
out of foreign exchange acquired in the form of currency notes, bank notes and
travellers cheques, are as under :-
- acquired by him from an Authorised Person for travel abroad and represents
the unspent amount thereof or
- 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
and by way of honorarium or gift or
- acquired by him, from any person not resident in India, and who is on a
visit to India, as honorarium, gift, for services rendered or in settlement of
any lawful obligation.
Note: Where a person approaches an Authorised Person for surrender of unspent/
unutilized foreign exchange after the prescribed period of 180 days, Authorised
Person should not refuse to purchase the foreign exchange merely on the ground
that the prescribed period has expired.
A.9 Remittances for Tour Arrangements, etc.
9.1 Authorised Dealers may remit foreign exchange up to a reasonable limit, at
the request of a traveller towards his hotel accommodation, tour arrangements,
etc., in the countries proposed to be visited by him or for making other tour
arrangements for travellers from India, provided in each case the Authorised
Dealer is satisfied that the remittance is being made out of the foreign
exchange purchased by the traveller concerned from an Authorised Person
(including exchange drawn for private travel abroad), in accordance with the
Rules, Regulations and Directions in force.
9.2 Authorised Dealers may effect remittances at the request of agents in India
who have tie-up arrangements with hotels / agents, etc., abroad for providing
hotel accommodation or making other tour arrangements for travel from India,
provided the Authorised Dealer is satisfied that the remittance is being made
out of the foreign exchange purchased by the traveller concerned from an
Authorised Person (including exchange drawn for private travel abroad) in
accordance with the Rules, Regulations and Directions in force.
9.3 Authorised Dealer may open foreign currency accounts in the name of agents
in India who have tie up arrangements with hotels / agents, etc., abroad for
providing hotel accommodation or making other tour arrangements for travellers
from India provided:-
- the credits to the account are by way of depositing
- collections made in foreign exchange from travellers; and
- refunds received from outside India on account of cancellation of bookings /
tour arrangements, etc., and
- the debits in foreign exchange are for making payments towards hotel
accommodation, tour arrangements, etc., outside India, in accordance with
paragraph 9.2 above.
9.4 Authorised Dealer may allow tour operators to remit the cost of rail/ road/
water / transportation charges outside India without any prior approval from the
Reserve Bank, net of commission/mark up due to the agent. The sale of
passes/ticket in India can be made either against the payment in Indian Rupees
or in foreign exchange released for visits abroad. The cost of passes/tickets
collected in Indian Rupees need not be adjusted in the travellers’ entitlement
of foreign exchange for private visit.
9.5 In respect of consolidated tours arranged by travel agents in India for
foreign tourists visiting India and neighbouring countries like Nepal,
Bangladesh, Sri Lanka, etc., against advance payments / reimbursement through an
Authorised Dealer, part of the foreign exchange received in India against such
consolidated tour arrangement, may require to be remitted from India to these
neighbouring countries for services rendered by travel agents and hoteliers in
these countries. Authorised Dealer may allow such remittances after verifying
that the amount being remitted to the neighbouring countries (inclusive of
remittances, if any, already made against the tour) does not exceed the amount
actually remitted to India and the country of residence of the beneficiary is
A.10 Payment in Rupees
Authorised Dealers may accept payment in cash up to Rs. 50,000 (Rupees fifty
thousand only) against sale of foreign exchange for travel abroad (for private
visit or for any other purpose). Wherever the sale of foreign exchange exceeds
the amount equivalent to Rs.50,000, the payment must be received only by
- a crossed cheque drawn on the applicant’s bank account, or
- crossed cheque drawn on the bank account of the firm/company sponsoring the
visit of the applicant, or
- Banker’s Cheque / Pay Order / Demand Draft or
- Debit / credit / prepaid cards provided
- KYC/AML guidelines are complied with
- sale of foreign currency / issue of foreign currency TCs is within the limits
(credit / prepaid cards) prescribed by the bank and
- the purchaser of foreign currency / foreign currency TCs and the
credit/debit/prepaid card holder is one and the same person.
Note: Where the rupee equivalent of foreign exchange drawn exceeds Rs 50,000
either for any single drawal or more than one drawal reckoned together for a
single journey/visit, it should be paid by cheque or draft.
A.11 Advance Remittance – Import of services
Authorised Dealers (Category-I banks) may allow advance remittance for import of
services. However, where the amount exceeds USD 500,000 or its equivalent, a
guarantee from a bank of International repute situated outside India or a
guarantee from an Authorised Dealer in India, if such a guarantee is issued
against the counter-guarantee of a bank of International repute situated outside
India, should be obtained from the overseas beneficiary. The Authorised Dealer
should also follow up to ensure that the beneficiary of the advance remittance
has fulfilled his obligations under the contract or agreement with the remitter
In the case of a Public Sector Company or a Department /Undertaking of the
Government of India /State Governments, approval from the Ministry of Finance,
Government of India for advance remittance for import of services without bank
guarantee for an amount exceeding USD 100,000 (US Dollars one hundred thousand
only) or its equivalent is required.
A.12 Issue of Guarantee- Import of services
Authorised Dealer may issue guarantee on behalf of their customers importing
services, provided :
- the guarantee amount does not exceed USD 500,000
- the AD Category –I Bank is satisfied about the bonafides of the transaction.
- the AD Category –I Bank ensures submission of documentary evidence for import
of services in the normal course.
- the guarantee is to secure a direct contractual liability arising out of a
contract between a resident and a non-resident.
In the case of a Public Sector Company or a Department /Undertaking of the
Government of India /State Governments, approval from the Ministry of Finance,
Government of India for issue of guarantee for an amount exceeding USD 100,000
(US Dollars one hundred thousand only) or its equivalent is required.
In case of invocation of the guarantee, the Authorised Dealer is required to
submit to the Chief General Manager-in-Charge, Foreign Exchange Department,
Foreign Investments Division (EPD), Reserve Bank of India, Central Office,
Mumbai- 400001 a report on the circumstances leading to the invocation of the
A.13 Liberalised Remittance Scheme of USD 200,000 for Resident Individuals
13.1 Under this Scheme, Authorised Dealers may freely allow remittances by
resident individuals up to USD 200,000 per financial year (April-March) for any
permitted current or capital account transactions or a combination of both.
13.2 The facility is available to all resident individuals including minors.
13.3 Remittances under the facility can be consolidated in respect of family
members subject to individual family members complying with the terms and
conditions of the Scheme.
13.4 Remittances under the Scheme are allowed only in respect of permissible
current or capital account transactions or a combination of both. All other
transactions which are otherwise not permissible under FEMA and those in the
nature of remittance for margins or margin calls to overseas exchanges /
overseas counterparty are not allowed under the Scheme.
13.5 Resident individuals are free to acquire and hold immovable property or
shares (of listed companies or otherwise) or debt instruments or any other asset
outside India without prior approval of the Reserve Bank.
13.6 The limit of USD 200,000 under the Scheme also include remittances towards
gift and donation by a resident individual.
13.7 Remittances under the Scheme can be used for purchasing objects of art
subject to the provisions of other applicable laws such as the extant Foreign
Trade Policy of the Government of India.
13.8 The Scheme can also be used for remittance of funds for acquisition of
ESOPs. The Scheme is in addition to acquisition of ESOPs linked to ADR / GDR and
acquisition of qualification shares.
13.9 A resident individual can invest in units of Mutual Funds, Venture Capital
Funds, unrated debt securities, promissory notes, etc. under this Scheme.
Further, the resident can invest in such securities out of the bank account
opened abroad under the Scheme (see 13.12).
13.10 An individual who has availed of a loan abroad while as a non resident can
repay the same on return to India under the Scheme as a resident.
13.11 The Scheme can be used for outward remittance in the form of a DD either
in the resident individual’s own name or in the name of beneficiary with whom he
intends putting through the permissible transactions at the time of private
visit abroad, against self declaration of the remitter in the format prescribed.
13.12 Individuals can also open, maintain and hold foreign currency accounts
with a bank outside India for making remittances under the Scheme without prior
approval of the Reserve Bank. The foreign currency accounts may be used for
putting through all transactions connected with or arising from remittances
eligible under this Scheme.
13.13 Banks should not extend any kind of credit facilities to resident
individuals to facilitate remittances under the Scheme.
13.14 The scheme is not available for remittances for any purpose specifically
prohibited under Schedule I or any item restricted under Schedule II of Foreign
Exchange Management (Current Account Transaction) Rules, 2000.
13.15 The facility is not available for making remittances directly or
indirectly to Bhutan, Nepal, Mauritius and Pakistan.
13.16 The Scheme is not available for remittance to countries identified by
Financial Action Task Force (FATF) as non co-operative countries and territories
as available on FATF website www.fatf-gafi.org. or as notified by the Reserve
13.17 For undertaking transactions under the Scheme, resident individuals may
use the application-cum-Declaration Form as at Annex-3 and it is mandatory to
have PAN number to make remittances under the Scheme.
13.18 AD Category – I banks are required to furnish the information on
remittances made under this scheme on a monthly basis, in the revised format as
at Annex-7, to the Chief General Manager-in-Charge, Foreign Exchange Department,
(FID-EPD), Reserve Bank of India, Central Office, 11th Floor, Central Office
Building, Mumbai - 400 001, on or before fifth of the following month to which
it relates. A soft copy of the statement (in Excel format) may also be sent by
email. This statement in the revised format should be forwarded through Online
Returns Filing System (ORFS) for which purpose all the AD Category – I Banks
have been given user ID and password by the Reserve Bank.
14.1 The Reserve Bank will not, generally, prescribe the documents which should
be verified by the Authorised Dealers while releasing foreign exchange. In this
connection, attention of authorized dealers is drawn to sub-section (5) of
Section 10 of the FEMA, 1999 (as indicated in item 3 of Appendix 2) which
provides that an authorised person shall require any person desiring to transact
in foreign exchange to make such a declaration and to give such information as
will reasonably satisfy him that the transaction will not involve and is not
designed for the purpose of any contravention or evasion of the provisions of
the FEMA or any rule, regulation, notification, direction or order issued there
14.2 Authorised Dealers are also required to keep on record any information /
documentation, on the basis of which the transaction was undertaken, for
verification by the Reserve Bank. In case the applicant refuses to comply with
any such requirement or makes unsatisfactory compliance therewith, the
Authorised Dealer shall refuse, in writing, to undertake the transaction and
shall, if he has reasons to believe that any contravention / evasion is
contemplated by the person, report the matter to the Reserve Bank.
14.3 Authorised Dealers have specifically been advised that they may release
foreign exchange up to USD 100,000 each for employment, emigration, maintenance
of close relatives, education and medical treatment abroad without insisting on
any supporting documents but on the basis of self declaration incorporating
certain basic details of the transactions and submission of Form A2. In
addition, the existing facility of release of exchange by Authorised Persons up
to USD 10,000 or its equivalent in one financial year for one or more private
visits to any country (except Nepal and Bhutan) will continue to be available on
a self declaration basis.
A.15 Endorsement on Passport
It is not mandatory for Authorised Dealers to endorse the amount of foreign
exchange sold for travel abroad on the passport of the traveller. However, if
requested by the traveller, they may record under their stamp, date, signature
and details of foreign exchange sold for travel.
A.16 International Credit Cards
16.1 The restrictions contained in Rule 5 of the Foreign Exchange Management
(Current Account Transactions) Rules, 2000 will not be applicable for use of
International Credit Cards (ICCs) by residents for making payment towards
expenses, while on a visit outside India.
16.2 Residents can use ICCs on internet for any purpose for which exchange can
be purchased from an Authorised Dealer in India, e.g. for import of books,
purchase of downloadable software or import of any other item permissible under
Foreign Trade Policy (FTP).
16.3 ICCs cannot be used on internet or otherwise for purchase of prohibited
items, like lottery tickets, banned or proscribed magazines, participation in
sweepstakes, payment for call-back services, etc., since no drawal of foreign
exchange is permitted for such items/activities.
16.4 There is no aggregate monetary ceiling separately prescribed for use of
ICCs through internet.
16.5 Resident individuals maintaining foreign currency accounts with an
Authorised Dealer in India or a bank abroad, as permissible under extant Foreign
Exchange Regulations, are free to obtain ICCs issued by overseas banks and other
reputed agencies. The charges incurred against the card either in India or
abroad, can be met out of funds held in such foreign currency account/s of the
card holder or through remittances, if any, from India only through a bank where
the card holder has a current or savings account. The remittance for this
purpose should also be made directly to the card issuing agency abroad, and not
to a third party.
16.6 The applicable limit will be the credit limit fixed by the card issuing
banks. There is no monetary ceiling fixed by the Reserve Bank for remittances,
if any, under this facility.
16.7 Use of ICC for payment in foreign exchange in Nepal and Bhutan is not
A.17 International Debit Cards
17.1 Banks authorised to deal in foreign exchange are issuing International
Debit Cards (IDCs) which can be used by a resident for drawing cash or making
payment to a merchant establishment overseas during his visit abroad. It is
clarified that IDCs can be used only for permissible current account
transactions and the item-wise limits as mentioned in the Schedules to the
Rules, as amended from time to time, are equally applicable to payments made
through use of these cards.
17.2 The IDCs cannot be used on internet for purchase of prohibited items like
lottery tickets, banned or proscribed magazines, participation in sweepstakes,
payment for call-back services, etc., i.e. for such items/activities for which
drawal of foreign exchange is not permitted.
17.3 The International Banking Divisions/Foreign Exchange Departments of AD
banks were required to submit a statement as on December 31, each year in the
prescribed proforma, in case the aggregate forex utilization by the IDC holders
exceeds USD 100,000 in a calendar year. The requirement of submission of the
above statement by the AD banks has been discontinued from the calendar year
A.18 Store Value Cards/Charge Cards/Smart Cards, etc.
Certain Authorised Dealer banks are also issuing Store Value Card/Charge
Card/Smart Card to residents traveling on private/business visit abroad which
are used for making payments at overseas merchant establishments and also for
drawing cash from ATM terminals. No prior permission from the Reserve Bank is
required for issue of such cards. However, the use of such cards is limited to
permissible current account transactions and subject to the prescribed limits
under the Rules, as amended from time to time.
A.19 Acquisition of foreign securities under Employees Stock Option Plan (ESOP)
Resident individuals who are either employees or director of an Indian office or
branch of a foreign company in which foreign holding is not less than 51 per
cent are permitted to acquire foreign securities under ESOP Scheme without any
monetary limit. They are also permitted to freely sell the shares provided the
proceeds thereof are repatriated to India.
A.20 Income- tax clearance
Remittances to non-residents will be allowed to be made by the Authorised
Dealers on production of an undertaking by the remitter and a Certificate from a
Chartered Accountant in the formats (Annex - 4) prescribed by the Central Board
of Direct Taxes, Ministry of Finance, Government of India in their Circular
No.10/2002 dated October 9, 2002. [cf.
A. P. (DIR Series) Circular No.56 dated
November 26, 2002].