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Foreign Exchange Facilities for Residents (As on June 30, 2004)

Introduction

The legal framework for administration of exchange control in India is provided by the Foreign Exchange Management Act, 1999. Under the Act, freedom has been granted for buying and selling of foreign exchange for undertaking current account transactions. However, the Central Government has been vested with powers in consultation with Reserve Bank to impose reasonable restrictions on current account transactions. Accordingly, the Government has issued Notifications GSR.381(E) dated May 3, 2000, and S.O. 301(E) dated March30, 2001, imposing certain restrictions on current account transactions in public interest.

These details are available on the Bank’s website besides with the authorised dealers and regional offices of the Exchange control Department. Our experience so far has been that the residents like to get information on several matters relating to various current account transactions and other incidental issues. This pamphlet contains answers to all such questions in simple language. While preparing replies to questions, special care has been taken to ensure that the replies are drafted in simple words and reference to technical details are avoided.

The Foreign Exchange Management Act,1999 (FEMA), has come into force with effect from June 1, 2000. With introduction of the new Act (in place of FERA) certain structural changes have been introduced and now all transactions involving foreign exchange have been classified either as Capital or Current Account transactions. All transactions undertaken by a resident that do not alter his assets or liabilities outside India are current account transactions. In terms of Section 5 of the FEMA, persons are free to buy or sell foreign exchange for any current account transaction except for those transactions on which Central Government has imposed restrictions, vide its Notification No.G.S.R.381(E) dated May 3, 2000 (as amended from time to time). Full text of the said Notification is available in the Official Gazette. Incidentally, no release of foreign exchange is admissible for any kind of travel to Nepal and Bhutan or for any transaction with persons resident in Nepal and Bhutan.

Some of the commonly or frequently asked questions by residents in connection with foreign exchange facilities or restrictions have been answered in following paragraphs.

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1. How much exchange is available for a business trip?
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Authorised dealers can release foreign exchange up to US$25,000 for a business trip to any country other than Nepal and Bhutan. Release of foreign exchange exceeding US$25,000 for a travel abroad (other than Nepal and Bhutan) for business purposes, irrespective of period of stay, requires prior permission from Reserve Bank. Visits in connection with attending of an international conference, seminar, specialised training, study tour, apprentice training, etc., are treated as business visits. Visit abroad for medical treatment and/or check up also falls within this category.

Q.1 What is direct investment outside India ? +

Direct investment outside India means investment by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity but does not include portfolio investment.

EXCHANGE CONTROL DEPARTMENT NON RESIDENT FOREIGN ACCOUNTS DIVISION

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1. Can foreign tourists open a bank account in India during their short visit ? +

Yes, foreign tourists during their short visit to India can open a Non-Resident (Ordinary) Rupee (NRO) account with any bank dealing in foreign exchange .

1. Does QA 22 Account continue under Foreign Exchange Management Act, 1999 ? +

No. With the introduction of Foreign Exchange Management Act, 1999, the accounts opened by foreign nationals who are resident in India are treated as resident accounts. Such accounts are at par with other resident Rupee accounts.

Who is eligible to advertise on Foreign Satellite Channels? +

Exporters whose export earnings are Rs.10 lakhs or more during each of the preceding two years, or where the payment is to be made out of funds held in RFC or EEFC account of the remitter, are permitted by authorised dealers to make remittance for advertisement on foreign television, in terms of Foreign Exchange Management (Current Account Transactions) Rules, 2000 made by Government of India, vide Notification G.S.R.381(E) dated May 3, 2000. All other cases need to be referred by the authorised dealer to the Reserve Bank of India, for prior approval, before effecting any remittance.

Q.1. What is an NBFC-Infrastructure Finance Company (NBFC-IFC)?

Ans. An NBFC-IFC is a non-deposit taking NBFC which has a minimum of 75% of its total assets deployed towards infrastructure lending. For this purpose, the term ‘infrastructure lending’ means a credit facility extended by an NBFC to a borrower, by way of term loan, project loan subscription to bonds/ debentures/ preference shares/ equity shares in a project company acquired as a part of the project finance package such that subscription amount to be “in the nature of advance” or any other form of long term funded facility for exposure in the infrastructure sub-sectors as notified by the Department of Economic Affairs, Ministry of Finance, Government of India, from time to time.

1. What is the ATS ? +

The ATS is an Application Tracking System, hosted on the public website of the Reserve Bank of India (RBI), which has been developed for members of the public to submit any individual application to RBI and keep track of the status of its disposal thereafter.

Circular dated April 11, 2023 on ‘Framework for acceptance of Green Deposits’

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1. Is it mandatory for the regulated entities (REs) to raise green deposits?

It is not mandatory but in case REs intend to raise green deposits from their customers they should follow the framework prescribed therein.

Q1. What is the Asian Clearing Union (ACU)? +

Ans. The Asian Clearing Union (ACU) was established with its head-quarters at Tehran, Iran, on December 9, 1974 at the initiative of the United Nations Economic and Social Commission for Asia and Pacific (ESCAP), for promoting regional co-operation. The main objective of the clearing union is to facilitate payments among member countries for eligible transactions on a multilateral basis, thereby economizing on the use of foreign exchange reserves and transfer costs, as well as promoting trade among the participating countries.

Q.1. What is RBI-EFT System? +

Ans RBI EFT is a Scheme introduced by Reserve Bank of India (RBI) to help banks offering their customers money transfer service from account to account of any bank branch to any other bank branch in places where EFT services are offered.

1. “ಬೇಸಿಕ್ ಸೇವಿಂಗ್ಸ್ ಬ್ಯಾಂಕ್ ಡಿಪೋಸಿಟ್ ಅಕೌಂಟ್“ ಬಿಎಸ್ಬಿಡಿಎ ಇದರ ಅರ್ಥವೇನು ?

ನವೆಂಬರ್ 11, 2005ರ ಸುತ್ತೋಲೆ DBOD. No. Leg. BC. 44/09.07.005/2005-06 ರಲ್ಲಿಯ ಮಾರ್ಗದರ್ಶನದಂತೆ ತೆರೆಯಲಾದ ಎಲ್ಲ ಪ್ರಸ್ತುತವಿರುವ 'ನೊ-ಫ್ರಿಲ್ಸ್' ಖಾತೆಗಳನ್ನು ಮತ್ತು ಆಗಸ್ಟ್ 10, 2012ರ ಸುತ್ತೋಲೆ DBOD. No. Leg. BC. 44/09.07.005/2005-06ರಲ್ಲಿಯ ಮಾರ್ಗದರ್ಶನದ ಪಾಲನೆಯಂತೆ ಬಿಎಸ್ಬಿಡಿಎಗೆ ಪರಿವರ್ತನೆಗೊಂಡ ಖಾತೆಗಳನ್ನು ಹಾಗೂ ಮೇಲ್ಕಾಣಿಸಿದ ಸುತ್ತೋಲೆಯ ಮೇರೆಗೆ ತೆರೆದ ಎಲ್ಲ ಹೊಸ ಖಾತೆಗಳನ್ನು 'ಬಿಎಸ್ಬಿಡಿಎ' ಎಂದು ಪರಿಗಣಿಸಲಾಗುತ್ತದೆ. ಮೌಲ್ಯವರ್ಧಿತ ಸೇವೆಗಳಿಗೆ ಸಮಂಜಸವಾದ ಶುಲ್ಕಪಟ್ಟಿಯಡಿಯಲ್ಲಿ ಹೆಚ್ಚಿನ ಸೌಲಭ್ಯ ಹೊಂದಿರುವ, ವಿಶೇಷವಾಗಿ ಬಿಎಸ್ಬಿಡಿಎ ಗ್ರಾಹಕರ ಖಾತೆಗಳನ್ನು ಬಿಎಸ್ಬಿಡಿಎ ಎಂದು ಪರಿಗಣಿಸಲಾಗದು.

Q1: Will banks be required to maintain specified securities for the amount received in TLTRO in HTM book at all times? +

Ans: Yes. The banks will have to maintain amount of specified securities for the amount received in TLTRO in its HTM book at all times till maturity of TLTRO.

1. What are various types of cards? +

Ans: Cards can be classified on the basis of their issuance, usage and payment by the card holder. There are three types of cards (a) debit, (b) credit, and (c) prepaid.

The Reserve Bank of India has introduced an Ombudsman Scheme for customers of Non-Banking Financial Companies (NBFCs). The Ombudsman Scheme for Non-Banking Financial Companies, 2018 (the Scheme), is an expeditious and cost free apex level mechanism for resolution of complaints of customers of NBFCs, relating to certain services rendered by NBFCs. The Scheme is being introduced under Section 45 L of the Reserve Bank of India Act, 1934, with effect from February 23, 2018.

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1. Who is the NBFC Ombudsman ? +

The NBFC Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against NBFCs for deficiency in certain services covered under the grounds of complaint specified under Clause 8 of the Scheme.

Que - “Please provide the details of Exchange Rate value of INR against USD dollar from the year 1947 till date”. +

Ans – Information regarding USD-INR rates for the period 1945-46 – 1970-71 is available at the following link: Exchange Rate – 1945-1971

2. Information regarding USD-INR rate for the period 1970-71 to 2013-14 is available on:
http://dbie.rbi.org.in/DBIE/dbie.rbi?site=publications -> Handbook of Statistics on the Indian Economy -> Part I -> Annual Series -> Trade & Balance of Payments -> Table 147 - EXCHANGE RATE OF THE INDIAN RUPEE VIS-À-VIS THE SDR, US DOLLAR, POUND STERLING, D. M. /EURO AND JAPANESE YEN (calendar Year – Annual Average)

3. Information for the year 2015 onwards is available on
/en/web/rbi/exchange-rate-archive

1. Why are ₹2000 denomination banknotes being withdrawn? +

The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934 primarily with the objective to meet the currency requirement of the economy in an expeditious manner after withdrawal of the legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time. With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of ₹2000 banknotes was stopped in 2018-19. A majority of the ₹2000 denomination notes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continue to be adequate to meet the currency requirement of the public.

In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation.

1. What is The Depositor Education and Awareness (DEA) Fund Scheme, 2014, the Depositor Education and Awareness (DEA) Fund and when did this Scheme come into effect?

ANS: “The Depositor Education and Awareness Fund (DEA Fund) Scheme, 2014” was formulated by the Reserve Bank of India in exercise of the powers conferred upon it under Section 26A of the Banking Regulation (BR) Act, 1949 and all the powers enabling it in this behalf. Under the provisions of this Section, RBI has established the Depositor Education and Awareness Fund (Fund). The Scheme has come into effect from May 24, 2014, i.e., the date of notification of the Scheme in the Official Gazette of India.

Q.1 Does the circular apply to all loan products or only to Personal Loans?

Ans: The circular is applicable to all equated periodic instalment based personal loans only. The circular is not applicable to other types of loans. The Reserve Bank circular DBR.No.BP.BC.99/08.13.100/2017-18 on “XBRL Returns – Harmonization of Banking Statistics” dated January 04, 2018 may be referred for the definition of personal loans.

Scheme for Payment of Pension to Central Government Pensioners by Authorised Banks

Payment of pension to retired government employees, including payment of basic pension, increased dearness relief (DR), and other benefits as and when announced by the governments, is governed by the relevant schemes prepared by concerned Ministries/Departments of the Government of India and State Governments. RBI has issued certain instructions in this regard which is available in the Master Circular – Disbursement of Government Pension by Agency Banks dated April 01, 2025. Clarifications, in the form of questions and answers, on certain issues related to the instructions issued by RBI is given below.

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1. Whether a Joint Account can be continued for family pension after death of a pensioner?

Yes, the banks should not insist on opening of a new account in case of Central Government pensioner if the spouse in whose favour an authorization for family pension exists in the Pension Payment Order (PPO) is the survivor. The family pension should be credited to the existing account without opening a new account by the family pensioner for this purpose.

1. In Paragraph 4 of the Annex to the Resolution Framework, it is stated that the reference date for the outstanding amount of debt that may be considered for resolution shall be March 1, 2020. Does this mean that only debt outstanding as on March 1, 2020 can be resolved under the Resolution Framework? +

The stipulation at Paragraph 4 of the Annex to the Resolution Framework is a general clause regarding the date on which the eligibility criteria for resolution under the Resolution Framework may be assessed. The specific application of the reference date with respect to deciding the eligibility of accounts for resolution under Part A and Part B of the Annex to the Resolution Framework have been separately specified in Paragraphs 6 and 13 respectively, i.e, the requirement that the borrowers should be classified as standard, but not in default for more than 30 days with any lending institution as on March 1, 2020. The actual debt that may be considered for resolution will be the outstanding as on the date of invocation.