RBI/2008-09/383
A. P. (DIR Series) Circular No. 51
February 13, 2009
To,
All Category – I Authorised Dealer Banks
Madam / Sir,
Opening of Diamond Dollar Accounts – Liberalisation
Attention of Authorised Dealer Category - I (AD Category – I) banks is invited
to A. D. (M.A. Series) Circular No. 10 dated May 16, 2000 and Para 4A.19 of the
Foreign Trade Policy 2004-2009 regarding the Diamond Dollar Account Scheme in
terms of which firms and companies dealing in purchase / sale of rough or cut
and polished diamonds / precious metal jewellery plain, minakari and / or
studded with / without diamond and / or other stones, with a track record of at
least 3 years in import / export of diamonds / coloured gemstones / diamond and
coloured gemstones studded jewellery / plain gold jewellery, and having an
average annual turnover of Rs 5 crore or above during preceding three licensing
years, are allowed to open Diamond Dollar Accounts (DDA). The request for
opening of DDA is considered by the Reserve Bank on a case-to-case basis,
subject to the provisions of the prevailing Foreign Trade Policy of the
Government of India.
- With a view to liberalising the procedure, it has been decided to delegate
powers to AD Category – I banks to permit such firms and companies to open and
maintain DDA with AD Category – I banks, subject to the following terms and
conditions:
- The exporter should comply with the eligibility criteria stipulated in the
Foreign Trade Policy of the Government of India, issued from time to time.
- The DDA shall be opened in the name of the exporter and maintained in US
Dollars only.
- The account shall only be in the form of current account and no interest
should be paid on the balance held in the account.
- No intra-account transfer should be allowed between the DDAs maintained by
the account holder.
- An exporter firm / company shall be permitted to open and maintain not more
than 5 DDAs.
- The balances held in the accounts shall be subject to Cash Reserve Ratio
(CRR) and Statutory Liquidity Ratio (SLR) requirements.
- Exporter firms and companies maintaining foreign currency accounts, excluding
EEFC accounts, with banks in India or abroad, are not eligible to open Diamond
Dollar Accounts.
- The transactions in the DDA would be as under:
Permissible Credits
• Amount of pre-shipment and post-shipment finance availed in US Dollars.
• Realisation of export proceeds from shipments of rough, cut, polished diamonds
and diamond studded jewellery.
• Realisation in US Dollars from local sale of rough, cut and polished diamonds.
Permissible Debits
• Payment for import / purchase of rough diamonds from overseas / local sources.
• Payment for purchase of cut and polished diamonds, coloured gemstones and
plain gold jewellery from local sources.
• Payment for import/purchase of gold from overseas / nominated agencies and
repayment of USD loans availed from the bank.
• Transfer to rupee account of the exporter.
The above transactions are subject to the provisions of the Foreign Trade Policy
of Government of India, issued from time to time.
- The exporter firm / company shall make an application in the format annexed
to the AD Category – I bank for opening of the DDA. AD Category - I banks should
assess the track record of the firm / company at the end of every licensing year
(April-March). In case any firm / company fails to meet the eligibility
criteria, the account may be closed immediately.
- AD Category - I banks shall submit a monthly report to the Chief General
Manager-in-Charge, Foreign Exchange Department, Reserve Bank of India, Trade
Division, Amar Building, Mumbai – 400001, giving details of the name and address
of the firm / company in whose name the Diamond Dollar Account is opened, along
with the date of opening / closing the Diamond Dollar Account, by the 10th of
the following month to which it relates.
- Necessary amendments to the Foreign Exchange Management (Foreign Currency
Accounts by a Person Resident in India) Regulations, 2000 (Notification No.
FEMA. 10/2000-RB dated May 3, 2000) are being issued separately.
- AD Category - I banks 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 Sections
10(4) and 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,
(Salim Gangadharan)
Chief General Manager-in-Charge
Annex
[A. P. (DIR Series) Circular No. 51 dated February 13, 2009]
APPLICATION FOR OPENING DIAMOND DOLLAR ACCOUNT
To,
The Branch Manager
(name & address of bank/branch)
Dear Sir,
We are dealing in purchase / sale of rough or cut and polished diamonds /
precious metal jewellery plain, minakari and / or studded with / without diamond
and /or other stones, with a track record of at least 3 years in import / export
of diamonds / coloured gemstones / diamond and coloured gemstones studded
jewellery /plain gold jewellery, and having an average annual turnover of Rs 5
crore or above during preceding three licensing years.
- We wish to open a current account/s under the Diamond Dollar Account Scheme
with your bank in accordance with the provisions of (mention the relevant
paragraph) of the Foreign Trade Policy (period e.g. 2004-2009) of the Government
of India read with the Handbook of Procedures (mention the relevant Volume No.)
issued by Ministry of Commerce & Industry, Government of India.
- The relevant particulars are furnished below:
- Name of the Firm / Company :
- Address of the Registered Office :
- Principal business :
- IE Code No. :
- Annual Turnover of the last three
Years (enclose certificate of CA) :
- Details of the EEFC account, if any :
- We confirm that we are not maintaining any foreign currency account,
excluding EEFC account, with banks in India or abroad.
- We declare that we are not maintaining more than 5 DDAs including the one
proposed to be opened with your branch.
- We declare that we are neither on the caution list of exporters of Reserve
Bank of India nor on the defaulters list of Export Credit Guarantee Corporation
of India Ltd (ECGC).
- We undertake to abide by the rules of the Diamond Dollar Account Scheme
framed / to be framed from time to time and the terms and conditions stipulated
for opening and maintenance of the DDA with your bank and any other foreign
exchange / foreign trade regulation of Reserve Bank of India / Government of
India.
We request you to open a Diamond Dollar Account/s in the name of the
firm/company.
(Signature of the Authorized Official of the firm / company)
Name :
Designation :
Seal of firm / company :
Date :
Place :