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FEMA NotificationsPayment to a person resident outside India on
invocation of guarantee
In
pursuance of the provisions of Section 3 of the Foreign Exchange Management Act,
1999 (42 of 1999), and in partial modification of its Notification No. FEMA/
16/RB-2000 dated 3rd May 2000, (hereinafter referred to as �the
said Notification�), the Reserve Bank hereby directs that the said
Notification shall with immediate effect be amended as under, namely: -
After
paragraph (2) of the said Notification, the following paragraph shall be added,
namely: -
(2A)
a person resident in India being the principal debtor, to make payment to
a person resident outside India being a guarantor, such payment being by way of
reimbursement of the payment made to the resident creditor by the non-resident
guarantor under the guarantee furnished by him on behalf of the principal
debtor:
Provided that the amount payable by way of
reimbursement by the resident principal debtor shall not exceed the rupee
equivalent of the amount paid by the non-resident guarantor under the guarantee:
Provided
further that where the payment of the amount is made by the guarantor out of
funds held in NRNR/ NRO/ NRSR account/ s maintained with an authorised dealer in
India, the amount paid by way of reimbursement shall not be remitted outside
India or credited to NRE/ FCNR account of the non-resident.�
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