Foreign Travel New Instructions for FOREX Release
Attention
of authorised dealers is invited to the Government of India Notification No. GSR.
381(E) dated 3rd May 2000 notifying the Foreign Exchange Management
(Current Account Transactions) Rules, 2000 in terms of which drawal of exchange
for certain current account transactions has been prohibited and restrictions
have been placed on certain other transactions. In terms of Rule 5, the
transactions specified in Schedule III to the Notification require prior
approval of the Reserve Bank. Accordingly, authorised dealers may follow
directions contained in the Annexure to this circular as far as applications for
release of foreign exchange for travel abroad are concerned.
2.
It is clarified that the directions contained in the Annexure should be
read together with the Rules notified by the Government of India, Ministry of
Finance vide Notification dated 3rd May 2000, referred to above.
3.
In terms of clause (b) of Rule (2) of the Government of India
Notification No. GSR. 381(E) dated 3rd May 2000 �Drawal� includes
use of International Credit Cards, International Debit Cards, ATM cards etc. It
is, therefore, clarified that use of these instruments is also subject to the
restrictions imposed under the Notification. Further, in terms of clause (h) of
Section 2 of Foreign Exchange Management Act, 1999, �currency�, inter-alia,
includes International Credit Cards. The Reserve Bank has also vide its
Notification No FEMA 15/RB-2000 dated 3rd May 2000 notified ATM Cards and Debit
Cards as �Currency�. Accordingly, payments made by Credit Cards, ATM Cards
and Debit Cards etc. being only different methods of payment, all Rules,
Regulations made and Directions issued under the Act apply to Credit Cards, ATM
Cards, Debit Cards etc. also.
4.
It is clarified that where a person is going abroad for a purpose other
than a private visit it is not mandatory for authorised dealers to endorse the
amount of foreign exchange sold for such travel on the traveller's passport.
However, wherever foreign exchange is sold for a private visit i.e. travellers
availing Basic Travel Quota (BTQ) it should invariably be endorsed on the
traveller's passport under the authorised dealer�s stamp, date and signature.
5.
Advance Remittance Authorised dealers may allow advance remittance for
any current account transaction for which the release of foreign exchange is
admissible, provided the amount of advance remittance does not exceed US $
25,000 or its equivalent. Where the amount exceeds US $ 25,000 or its
equivalent, a guarantee from a bank of international repute situated outside
India or a guarantee from an authorised dealer in India, if such a guarantee is
issued against the counter-guarantee of a bank of International repute situated
outside India, should be obtained from the overseas beneficiary. The authorised
dealer should also follow up to ensure that the beneficiary of the advance
remittance has fulfilled his obligations under the contract or agreement with
the remitter in India.
6.
The Directions contained in the Annexure to this circular supersede the
instructions contained in Part A of Chapter 8 of Exchange Control Manual, (1993
edition), and its Annexures I, II and IV.
7.
Authorised dealers may bring the contents of the circular to the notice
to their constituents concerned.
8.
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). Any contravention or non-observance of these directions is subject to the
penalties prescribed under the Act.
Annexure
Foreign
Travel
A.1
General:
For
release of foreign exchange to the persons resident in India for travel abroad,
authorised dealers should be guided by the Rules made by the Govt. of India
under Section 5 of Foreign Exchange Management Act, 1999. In terms of item (b)
of Rule 3 of the Govt. Notification No. GSR 381 (E) dated 3rd May 2000, no
release of foreign exchange is admissible for travel to Nepal and Bhutan. For
release of foreign exchange exceeding certain limits, as specified in Schedule
III to the Notification, prior approval of Reserve Bank should be obtained. All
applications for release of exchange exceeding the limits prescribed in Schedule
III to the Govt. Notification should be referred to the Regional Office of the
Exchange Control Department under whose jurisdiction the applicant is
functioning/ residing.
A.2
Sale of Exchange:
a.
Where permits/ approvals have been issued by the Reserve Bank/ Government
of India, foreign exchange may be sold within the period of validity stated on
the permit/approval and the sale be endorsed on the reverse of the permit /
original approval.
b.
Authorised dealers need not endorse on the traveller's passport Foreign
Exchange sold for travel abroad where the traveller is going abroad for a
purpose other than private visit. Wherever foreign exchange is sold for a
private visit it should invariably be endorsed on the traveller's passport under
the authorised dealer�s stamp, date and signature.
A.
Authorised dealers may, if requested by the traveller, record under
their stamp and signature details of foreign exchange sold for travel , other
than the private visit abroad .
B.
In case of a child travelling on a parent's passport, the endorsement
should be made on the joint passport.
C.
In case of issue of traveller�s cheques, the traveller should sign
the cheques in the presence of an authorised official and the purchaser's
acknowledgement for receipt of the traveller�s cheques should be duly
maintained.
D.
Out of the overall foreign exchange being sold to a traveller, exchange
in the form of foreign currency notes and coins may be sold up to the limit
indicated below:
(i)
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Travellers
proceeding to countries other than Iraq, Libya, Islamic Republic of Iran,
Russian Federation and other Republics of Commonwealth of Independent
States
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not
exceeding US $ 500 or its equivalent
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(ii)
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Travellers
proceeding to Iraq or Libya,
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not
exceeding US $ 5000 or its equivalent
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(iii)
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Travellers
proceeding to Islamic Republic of Iran, Russian Federation and other
Republics of Commonwealth of Independent States.
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Full
exchange released
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E.
The forms A2 relating to sale of foreign exchange for travel abroad
should be retained for a period of one year by the authorised persons together
with the related documents for the purpose of verification by their Internal
auditors.
A.3
A
person who has fallen sick after proceeding abroad may also be released foreign
exchange for medical treatment outside India in accordance with Rule 5 of Govt.
of India Notification No GSR 381(E) dated 3rd May, 2000.
A.4
Cultural Tours:
Dance
troupes, artistes, etc. who wish to undertake tours abroad for cultural purposes
should apply to Ministry of Human Resources Development (Department of Education
and Culture), Government of India, for recommendation regarding their foreign
exchange requirements. Authorised dealers may release foreign exchange, on the
strength of the sanction from the Ministry, to the extent and subject to
conditions indicated therein.
A.5
Private visits:
Foreign
exchange for private visit can also be released to a person who is availing of
foreign exchange for travel outside India for any purpose.
A.6
Follow up of utilisation of foreign exchange in certain cases:
Where
an authorised dealer has released exchange on the basis of estimates, e.g. for
medical treatment or medical check up abroad etc. the authorised dealer is
required to follow up and ensure that the details of actual expenses are
invariably submitted by the applicant to the branch of the authorised dealer
which released foreign exchange, within a fortnight of his returning to India.
Non-submission of the details within reasonable time should be reported to the
Regional Office of Reserve Bank under whose jurisdiction the applicant is
residing.
A.7
Period of surrender of foreign exchange:
In
case the foreign exchange purchased for any purposes is not used for the
purposes or for any other purpose for which purchase or acquisition of foreign
exchange is permitted under the provisions of FEMA 1999 or Rules or Regulations
made thereunder, the same or the unused portion thereof is required to be
surrendered to an authorised person within a period of 60 (sixty) days from the
date of its purchase. (cf. Notification No. FEMA 9/2000-RB Dated 3rd May 2000)
Note:
In cases where a person approaches an authorised person for surrendering
foreign exchange after 60 days, the authorised person should not refuse to
purchase the foreign exchange on the ground that the prescribed period of 60
days has expired
A.8
Unspent Foreign Exchange:
Unspent
foreign exchange brought back to India by a traveller should be surrendered to
an authorised person against payment in rupees within 90 days from the date of
return of the traveller if the unspent foreign exchange is in the form of
currency notes. If such foreign exchange is in the form of traveller cheques,
the same should be surrendered to an authorised person within 180 days from the
date of return. Exchange so brought back can be utilised by the traveller for
his subsequent visit abroad during the period specified above. However, a
returning traveller is also permitted to retain with him, foreign currency
travellers cheques and Notes upto an aggregate amount of US$ 2000 and foreign
coins without any ceiling. (cf. Notification No. FEMA 11/2000-RB dated 3rd May
2000). Foreign exchange so retained can be utilised by the traveller for his
subsequent visit abroad.
Note:
Where a person approaches an authorised person for surrender of
foreign exchange after the prescribed period authorised person should not
refuse to purchase the foreign exchange on the ground that the prescribed
period has expired.
A.9
Remittances for Tour Arrangements etc.:
l.
Authorised dealers may remit foreign exchange upto a reasonable limit, at
the request of a traveller towards his hotel accommodation, tour arrangements,
etc., in the countries proposed to be visited by him, provided it is out of the
foreign exchange purchased by the traveller from an authorised person (including
exchange drawn for private travel abroad) in accordance with the Rules,
Regulations and Directions in force.
ll.
Authorised dealers may effect remittances at the request of agents in
India who have tie up arrangements with hotels/agents, etc., abroad for
providing hotel accommodations or making other tour arrangements for travellers
from India provided the authorised dealer is satisfied that the remittance is
being made out of the foreign exchange purchased by the concerned traveller from
an authorised person (including exchange drawn for private travel abroad) in
accordance with the Rules, Regulations and Directions in force.
lll.
Authorised dealer may open foreign currency accounts in the name of
agents in India who have tie up arrangements with hotels/agents, etc., abroad
for providing hotel accommodations or making other tour arrangements for
travellers from India provided
a. the credits to the account are by
way of depositing:
i.
collections made in foreign exchange from travellers and
ii. refunds received from outside India on account of
cancellation of bookings/tour arrangements, etc., and
b.
the debits in foreign exchange are for making payments towards hotel
accommodation, tour arrangements, etc., outside India, in accordance with (ii)
above.
A.10
Payment in Rupees:
Authorised
dealers may accept payment in cash up to Rs 50,000 (Rupees fifty thousand only)
against sale of foreign exchange for travel abroad (for private visit or for any
other purpose). Wherever the sale of foreign exchange exceeds the amount
equivalent to Rs. 50,000, the payment must be received only by a (i) crossed
cheque drawn on the applicant�s bank account, or (ii) crossed cheque drawn on
the bank account of the firm/company sponsoring the visit of the applicant, or
(iii) Banker�s Cheque/ Pay Order/ Demand Draft.
Note:
Where the rupee equivalent of foreign exchange drawn exceeds Rs. 50,000 either
for any single drawal or more than one drawal reckoned together for a single
journey/ visit it should be paid by cheque or draft as explained above.
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