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Release of Foreign Exchange for Small Value Remittances
A.P.
(DIR Series) Circular No. 16 dated 12th September 2002
Attention
of authorised dealers (ADs) is drawn to the sub-section (5) of Section 10 of the
Foreign Exchange Management Act (FEMA), 1999, which provides that an authorised
person shall before undertaking any transaction in foreign exchange on behalf of
any person require that person to make such a declaration and to give such
information as will reasonably satisfy him that the transaction will not involve
and is not designed for the purpose of any contravention or evasion of the
provisions of the Act or of any rule, regulation, notification, direction or
order issued thereunder.
2. With a view to provide hassle free
release of foreign exchange to the resident individuals for various purposes, it
has since been decided that ADs may release an amount upto USD 500 or its
equivalent for all permissible transactions on the basis of a simple letter from
the applicant containing the basic information, viz., name and the address of
the applicant, name and address of the beneficiary, amount to be remitted and
purpose of remittance. It is
clarified that submission of A2 Form in such cases need not be insisted upon.
3. It is further clarified that Authorised
Dealers need not obtain any document as long as exchange is being purchased for
a permissible transaction and the amount does not exceed USD 500 or its
equivalent and the payment is made by a cheque drawn on the applicant's bank
account or by a Demand Draft.
4. Authorised Dealers may bring the
contents of the circular to the notice of their constituents concerned.
5. 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).
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