| Date: |
07-12-2000
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| Notification No: |
RBI A P D (Series)Circular No 22/2000
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
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| Subject: |
Remittance towards Schemes involving money circulation
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Remittance towards Schemes involving money circulation
References
have been received in Reserve Bank in the recent past from individuals/
authorised dealers seeking approvals/ clarifications for effecting remittances
in foreign currency towards purchase of websites. Many such schemes offer
earnings in US Dollars and/ or in other foreign currency, on incremental basis,
depending on the number of new clients/customers added to the chain, thereby
making the operation of such schemes akin to money circulation. It is clarified
that authorised dealers should not allow remittances to operators of such
schemes and/or to any other overseas company carrying on such types of
activities.
2.
Authorised dealers may, however, allow remittance if they are satisfied
that the website is being sold unconditionally and the remitter is purchasing it
for developing it for his present/future business and not for the purpose of
adding further members to the chain. For this purpose authorised dealers should
satisfy themselves about the bonafides of the overseas company and/ or the
operators and the scheme, through proper documents.
3.
Authorised dealers may bring the contents of this circular to the notice
of their constituents concerned.
4.
The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the Foreign Exchange
Management Act, 1999 (42 of 1999) and any contravention or non-observance of
these directions is subject to the penalties prescribed under the said Act.
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