RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
Notification No. FEMA 14(R)/2016-RB
May 02, 2016
Foreign Exchange Management (Manner of Receipt and Payment)
Regulations, 2016
In exercise of the powers conferred by Section 47 of the Foreign Exchange
Management Act, 1999 (42 of 1999), and in supersession of
Notification No.
FEMA.14/ 2000-RB dated May 3, 2000, as amended from time to time, dealing with
Manner of Receipt and Payment,
Notification No. FEMA.16/2000-RB dated May 3,
2000, as amended from time to time, dealing with Receipt from and Payment to a
person Resident outside India and
Notification No. FEMA. 17/ 2000-RB dated May
3, 2000, as amended from time to time, dealing with Transactions in Indian
Rupees with Residents of Nepal and Bhutan, the Reserve Bank of India makes the
following Regulations in respect of Manner of Receipt and Payment, namely
1. Short title and commencement :
- These Regulations may be called the Foreign Exchange Management (Manner of
Receipt and Payment) Regulations, 2016.
- They shall come into effect from the date of their publication in the Official
Gazette.
2. Definitions :
In these Regulations, unless the context requires otherwise, -
- 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999);
- 'Authorised Dealer' means a person authorized as an authorized dealer under
subsection (1) of Section 10 of the Act
- 'Authorised Bank' means a bank, other than an authorized dealer, authorized by
the Reserve Bank to accept deposits from persons resident outside India;
- 'FCNR / NRE account' means an FCNR or NRE account opened and maintained in
accordance with the Foreign Exchange Management (Deposits) Regulations, 2016;
The words and expressions used but not defined in these Regulations shall have
the same meaning respectively assigned to them in the Act.
3. Manner of Receipt in Foreign Exchange : -
(1) Every receipt in foreign exchange by an authorized dealer, whether by way of
remittance from a foreign country or by way of reimbursement from his branch or
correspondent outside India against payment for export from India, or against
any other payment, shall be as mentioned below:
(A) Members of the Asian Clearing Union
(i) Bangladesh, Myanmar, Pakistan, Sri Lanka & Republic of Maldives -
- Receipt for export of eligible goods and services by debit to the Asian Clearing
Union Dollar account and / or Asian Clearing Union Euro account in India of a
bank of the member country in which the other party to the transaction is
resident or by credit to the Asian Clearing Union Dollar account and / or Asian
Clearing Union Euro Account of the authorized dealer maintained with the
correspondent bank in that member country ;
- Receipt may also be made in any freely convertible currency in all other cases.
- In respect of exports from India to Myanmar, payment may be received in any
freely convertible currency or through ACU mechanism from Myanmar.
(ii) Nepal and Bhutan –
- Receipt may be in Rupees
- Receipts for export of goods to Nepal may be made in free foreign exchange,
provided the importer resident in Nepal has been permitted by the Nepal Rashtra
Bank to make payment in free foreign exchange. However such receipts shall not
be routed through the ACU mechanism.
(iii) Islamic Republic of Iran
- Receipt for export of eligible goods and services, in any freely convertible
currency and / or in accordance with the directions issued by the Reserve Bank
to the authorized dealers from time to time.
- Receipt in any freely convertible currency and / or in accordance with the
directions issued by the Reserve Bank to the authorized dealers from time to
time in all other cases.
(B) All countries other than those mentioned in A above
(i) Receipt in rupees from the account of a bank situated in any country other
than a member country of the Asian Clearing Union.
(ii) Receipt in any freely convertible currency.
(2) (a) In respect of an export from India, receipt shall be made in a currency
appropriate to the place of final destination as mentioned in the declaration
form irrespective of the country of residence of the buyer.
(b) Any other mode of receipt of export proceeds for an export from India in
accordance with the directions issued by the Reserve Bank of India to authorized
dealers from time to time.
(3) Authorised dealers have been permitted to allow receipts for export of
goods/ software to be received from a Third party (a party other than the buyer)
as per the guidelines issued by the Reserve Bank.
4. Manner of Receipts in certain cases : -
(1) Notwithstanding anything contained in Regulation 3, receipt for export may
also be made by the exporter as under, namely :
- in the form of a bank draft, cheque, pay order, foreign currency notes/
travelers cheque from a buyer during his visit to India, provided the foreign
currency so received is surrendered within the specified period to the
authorized dealer of which the exporter is a customer ;
- by debit to FCNR/ NRE account maintained by the buyer with an Authorised Dealer
or an Authorised Bank in India;
- in rupees from the credit card servicing bank in India against the charge slip
signed by the buyer where such payment is made by the buyer through a credit
card;
- from a rupee account held in the name of an Exchange House with an authorized
dealer if the amount does not exceed fifteen lakh rupees per export transaction
or an amount prescribed by RBI, in consultation with Government of India in this
regard;
- In accordance with the directions issued by the Reserve Bank to Authorised
Dealers, where the export is covered by the arrangement between the Central
Government and the Government of a foreign country or by the credit arrangement
entered into by the Exim Bank with a financial institution in a foreign state;
- in the form of precious metals i.e. gold/ silver/ platinum equivalent to value
of jewellery exported by Gem & Jewellery units in Special Economic Zones and
Export Oriented Units on the condition that the sale contract provides for the
same and the value is declared in the relevant EDF.
(2) In addition to 4 (1) (i) & (iii) above, any person resident in India may
also receive any payment for other than exports by means of postal order issued
by a post office outside India or by a postal money order issued by such post
office.
5. Manner of payment in foreign exchange : -
(1) A payment in foreign exchange by an Authorised Dealer, whether by way of
remittance from India or by way of reimbursement to his branch or correspondent
outside India against payment for import into India, or against any other
payment, shall be as mentioned below :
(A) Members of the Asian Clearing Union
(i) Bangladesh, Myanmar, Pakistan, Sri Lanka & Republic of Maldives –
- Payment for import of eligible goods and services by credit to Asian Clearing
Dollar account and / or Asian Clearing Union Euro account in India of a bank of
the member country in which the other party to the transaction is resident or by
debit to the Asian Clearing Union Dollar account and / or Asian Clearing Union
Euro account of the authorized dealer maintained with the correspondent bank in
that member country ;
- Payment may also be made in any freely convertible currency in all other cases.
- In respect of imports to India from Myanmar, payment may be made in any freely
convertible currency or through ACU mechanism from Myanmar.
(ii) Nepal and Bhutan –
Payment may be in Rupees
(iii) Islamic Republic of Iran
Payment for import of eligible goods and services, in any freely convertible
currency and / or in accordance with the directions issued by the Reserve Bank
to the authorized dealers from time to time.
Payment in any freely convertible currency and / or in accordance with the
directions issued by the Reserve Bank to the authorized dealers from time to
time in all other cases.
(B) All countries other than those mentioned in A above.
(i) Payment in rupees from the account of a bank situated in any country other
than a member country of the Asian Clearing Union
(ii) Payment in any freely convertible currency.
(2) In respect of import into India –
- Where the goods are shipped from a member country of the Asian Clearing Union
(other than Nepal and Bhutan) but the supplier is resident of a country other
than a member country of the Asian Clearing Union, payment may be made in a
manner specified for countries in Group B of Regulation 5;
- In all other cases, payment shall be made in a currency appropriate to the
country of shipment of goods;
- Any other mode of payment in accordance with the directions issued by the
Reserve Bank of India to authorized dealers from time to time.
(3) Authorised Dealers have been permitted to allow payments for import of
goods/ software to be made to a Third Party (a party other than the supplier) as
per the guidelines issued by the Reserve Bank.
6. Manner of Payment in certain cases :-
(1) Notwithstanding anything contained in Regulation 5, a person resident in
India may make payment for import of goods.
In foreign exchange through an international card held by him/ in rupees from
international credit card/ debit card through the credit/ debit card servicing
bank in India against the charge slip signed by the importer/ as prescribed by
Reserve Bank from time to time.
Provided that –
- the transaction for which the payment is so made is in conformity with the
provisions of the Act, rules and regulations made thereunder; and
the import is also in conformity with the provision of the Foreign Trade Policy
in force.
(2) Any person resident in India may also make payment as under :
- in rupees towards meeting expenses on account of boarding, lodging and services
related thereto or travel to and from and within India of a person resident
outside India who is on a visit to India;
- by means of a crossed cheque or a draft as consideration for purchase of gold or
silver in any form imported by such person in accordance with the terms and
conditions imposed under any order issued by the Central Government under the
Foreign Trade (Development and Regulations) Act, 1992 or under any other law,
rules or regulations for the time being in force;
- a company or resident in India may make payment in rupees to its non whole time
director who is resident outside India and is on a visit to India for the
company's work and is entitled to payment of sitting fees or commission or
remuneration, and travel expenses to and from and within India, in accordance
with the provisions contained in the company's Memorandum of Association or
Articles of Association or in any agreement entered into by it or in any
resolution passed by the company in general meeting or by its Board of
Directors, provided the requirement of any law, rules, regulations, directions
applicable for making such payments are duly complied with.
(A. K. Pandey)
Chief General Manager
Published in the Official Gazette of Government of India – Extraordinary –
Part-II, Section 3, Sub-Section (i) dated 03.05.2016- G.S.R.No.480(E)
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