RBI/2010-11/493
A.P. (DIR Series) Circular No. 56
April 29, 2011
To
All Authorised Dealers in Foreign Exchange
Madam/ Sir
Foreign Exchange Management Act, 1999-
Advance Remittance for Import of Goods - Liberalisation
Attention of Authorised Dealer Category – I (AD Category-I) banks is invited to
A. P. (DIR Series) Circular No.106 dated June 19, 2003,
A. P. (DIR Series)
Circular No.15 dated September 17, 2003 and
A.P. (DIR Series) Circular No.09
dated August 21, 2008 in terms of which AD Category – I banks are required to
obtain an unconditional, irrevocable standby Letter of Credit (LC) or a
guarantee from an international bank of repute situated outside India or a
guarantee of an AD Category – I bank in India, if such a guarantee is issued
against the counter guarantee of an international bank of repute situated
outside India, for an advance remittance exceeding USD 100,000 or its
equivalent.
- With a view to liberalising the procedure, it has been decided to enhance the
aforesaid limit of USD 100,000 to USD 200,000 or its equivalent, with immediate
effect for importers (other than a Public Sector Company or a
Department/Undertaking of Central/State Governments where the requirement of
bank guarantee is to be specifically waived by the Ministry of Finance,
Government of India for advance remittances exceeding USD 100,000 or its
equivalent).
- All the other instructions including the facility to waive the requirement of
the standby LC/ bank guarantee for advance remittance up to USD 5,000,000 or its
equivalent, where the AD Category – I bank is satisfied about the track record
and bonafides of the importer based on their internal Board approved policy,
contained in
A.P. (DIR Series) Circular No. 09 dated August 21, 2008, shall
remain unchanged.
- Authorised Dealers may bring the contents of this circular to the notice of
their constituents and customers concerned.
- 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 are without prejudice to permissions / approvals, if any, required
under any other law.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager- in Charge