RESERVE BANK OF INDIA
Foreign Exchange Department
Central Office
Mumbai - 400 001
A. P. (DIR Series) Circular No. 104
April 04, 2012
To
All Authorised Persons in Foreign Exchange
Madam/ Sir,
Authorised Dealer Category II – Permission for
additional activity and opening of Nostro account
Attention of all the Authorised Persons in foreign exchange is invited to Para
3 and Para 5 of Annex I to the
A. P. (DIR Series) Circular No. 25 [A.P. (FL/RL
Series) Circular No. 02] dated March 6, 2006.
- At present, only Authorised Dealer Category – I (AD Category-I) banks are
permitted to issue forex pre-paid cards to residents travelling on private /
business visit abroad. It has now been decided to permit Authorised Dealers
Category-II also to issue forex pre-paid cards to residents travelling on private/business
visits abroad, subject to adherence to KYC / AML / CFT requirements. However,
the settlement in respect of forex pre-paid cards may be effected through AD
Category-I banks.
- To ensure greater flexibility in sending remittances, it has now also been
decided to allow Authorised Dealers Category-II to open Nostro accounts subject
to following terms and conditions:
- Only one Nostro account for each currency may be opened;
- Balances in the account should be utilized only for the settlement of remittances
sent for permissible purposes and not for the settlement in respect
of forex prepaid cards;
- No idle balance shall be maintained in the said account; and
- They will be subject to reporting requirements as prescribed from time to
time.
- All the other instructions contained in the A.P.(DIR Series) Circular No.25
{A.P.(FL/RL Series) Circular No.2} dated March 6, 2006 shall remain unchanged.
- Authorised Persons may bring the contents of this circular to the notice
of their constituents 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,
(Rudra Narayan Kar)
Chief General Manager
RBI/2011-12/488