| Date: |
04-02-2016
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| Notification No: |
RBI/2015-16/307 A.P. (DIR Series) Circular No. 42
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
RBI/2015-16/307 A.P. |
| Subject: |
Settlement of Export/ Import transactions in currencies not having a direct exchange rate
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RBI/2015-16/307
A.P. (DIR Series) Circular No. 42
February 04th 2016
To
All Category – I Authorised Dealer Banks
Madam/ Sir,
Settlement of Export/ Import transactions in currencies not having a
direct exchange rate
Attention of Authorised Dealer Category I (AD Category – I) banks is invited
to
Notification No. FEMA. 14 /RB -2000, dated 3rd May 2000, as amended from time
to time, dealing with manner of receipt and payment, in terms of which export
proceeds for exports from India and import payments for imports to India may be
received / made in any mode in accordance with the directions issued by the
Reserve Bank of India to the Authorized Dealers from time to time.
- To further liberalize the procedure and facilitate settlement of
export and import transactions where the invoicing is in a freely
convertible currency and the settlement takes place in the currency of the
beneficiary, which though convertible, does not have a direct exchange rate,
it has been decided that AD Category-I banks may permit settlement of such
export and import transactions (excluding those put through the ACU
mechanism), subject to conditions as under:
- Exporter/ Importer shall be a customer of the AD Bank,
- Signed contract / invoice is in a freely convertible currency,
- The beneficiary is willing to receive the payment in the currency of
beneficiary instead of the original (freely convertible) currency of the
invoice/ contract/ Letter of Credit as full and final settlement,
- AD bank is satisfied with the bonafides of the transactions, and;
- The counterparty to the exporter / importer of the AD bank is not from a
country or jurisdiction in the updated FATF Public Statement on High Risk &
Non Co-operative Jurisdictions on which FATF has called for counter
measures.
- The Master Direction No. 16 of 2015-16 (on Export of Goods and Services)
and Master Direction No. 17 of 2015-16 (on Import of Goods and Services)
have been updated accordingly to incorporate the above changes.
- 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 Section
10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA),
1999 (42 of 1999) and are without prejudice to permissions/ approvals, if
any, required under any other law.
Yours faithfully,
(B P. Kanungo)
Principal Chief General Manager
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