Foreign Exchange Control Manual, Annexure-II, Use of International Credit Cards.
Annexure II : Use of International Credit Cards
ANNEXURE II
International Credit Cards (ICCs) (Paragraph 8A.2)
- A. Instructions to card issuing banks or their subsidiaries in India
- Banks and their subsidiaries may issue International Credit Cards (
ICCs) to residents. They are also free to issue single card valid in India,
Nepal and Bhutan as well as other countries provided they have required
mechanism in place to segregate rupee transactions (i.e. transactions in
India, Nepal and Bhutan) and foreign currency transactions arising out of
use of such cards. In such cases, however, the card should bear
superscription ' Not valid for payment in Foreign Exchange in Nepal and
Bhutan'.
- The card issuing banks/subsidiaries should invariably obtain an
undertaking from the applicant, before issue of ICC, that the utilisation of
the card would be strictly in accordance with the Exchange Control
Regulations, and in the event of any failure on the part of the cardholder
to comply with the regulations, he would be liable for action under the
FERA, 1973.
- The card issuing banks/subsidiaries can accept payments directly from
the card holders in Indian rupees towards the settlement of bills/invoices
drawn in foreign exchange.
- Remittances towards settlement/reimbursement of ICC dues should be made
through an authorised dealer.
- The card issuing bank/subsidiary need not insist on submission of
documentary evidence like invoice/bills etc. if the remittance involved is
less than U.S.$ 250 or its equivalent and the authorised dealer is satisfied
about the bonafides of the remitter and the purpose of remittance.
- In case the amount of claim on account of use of ICC during visits
abroad exceeds the applicant's entitlement the card issuing bank/organisation
should provide the reimbursement and report the matter to the Regional
Office of the Exchange Control Department giving full details. However,
under no circumstances reimbursement should be delayed or refused on the
grounds of excess drawing .
- ICC can also be issued to software engineers going abroad on software
assignments provided the claims for such cards are met out of the foreign
currency accounts of the engineers concerned or from EEFC balances of their
employer in India.
- ICCs should not be issued to residents going abroad on employment
and/or emigration.
- Conditions governing the use of ICCs
- Residents are free to use ICCs for payments in rupees or foreign
exchange for goods and services procured in India.
- ICCs can also be utilised by residents for making personal remittances
which are permitted under the extant Exchange Control Regulations subject to
the applicable ceilings, if any, and compliance with conditions and
documentation prescribed for the purpose concerned.
- ICCs issued in India are not valid for payment in foreign exchange in
Nepal and Bhutan.
- Residents going abroad are free to use ICCs for all bonafide personal
expenses, including the purchase of goods for personal use provided , the
total exchange drawn during the trip abroad does not exceed their
entitlement. Import of goods so purchased abroad into India would be
governed by the Baggage Rules/Exim Policy in force. The entitlement of
exchange should be ascertained from the authorised dealer through whom
reimbursement would be provided. The residents may , if they so desire, draw
foreign exchange against ICCs in the form of foreign currency notes/travellers'
cheques to the extent of their entitlement from an authorised dealer
/full-fledged money changer. Sale of such foreign currency notes/travellers'
cheques out of entitlement would be governed by extant regulations and would
be subject to the applicable ceilings. Exchange sold in form of currency
notes/travellers' cheques should be endorsed on the passport.
- Residents who have been issued ICCs and are going abroad for employment
or on emigration are not permitted to use it for drawing exchange. They
should surrender their ICCs before they proceed abroad on
employment/emigration.
- ICCs can also be used for the following purposes:
- Import of software through Internet.
- Fees for training or education of scientific/technical nature through
Internet.
- Registration of Internet domain name, hosting charges for websites/home
pages overseas and access fees for Internet related services through website
.
- Advance payment not exceeding U.S.$ 15,000 for import of
software/database through internet may also be allowed .The cardholder
should furnish the details of software/database obtained through the
Internet, charges to be paid to the overseas organisation for downloading
the software/data and a declaration having received the software/data for
which the payment was made through ICC.
- The ICC cannot be used for effecting remittances for the purposes for
which release of exchange is not permissible under the extant regulations
like subscription to (a) magazines etc. which are on the proscribed/banned
list and (b) football pools, sweepstakes or lotteries, etc.
- Cardholders drawing exchange under BTQ against ICCs should on their
return to India get their passports endorsed from the authorised dealers
through whom the reimbursement will be provided.
A.D.(M.A. Series) Circular No.27