RBI/2006-07/216
A.P. (DIR Series) Circular No.24

December 20, 2006

To

Madam/Sir,

In terms of the above mentioned Rules and directions –

• a resident individual is permitted to remit up to USD 25,000 per calendar year under the Liberalised Remittance Scheme of USD 25,000 (the Scheme) for any current or capital account transactions or a combination of both subject to specified terms and conditions including remittance facility not being made available for certain purposes,
• in terms of the Current Account Transactions Rules
• a resident individual is permitted to remit upto USD 5000 per remitter/ donor per annum towards gift ,
• a resident individual is permitted to remit upto USD 5000 per remitter/ donor per annum towards donation,
• a resident individual is permitted to invest in overseas companies (a) listed on a recognised stock exchange abroad and (b) which has the shareholding of at least 10 per cent in an Indian company listed on a recognised stock exchange in India (as on 1^st January of the year of the investment).

2. With a view to simplifying the procedures and providing greater flexibility in foreign exchange transactions, the Liberalised Remittance Scheme of USD 25,000 (the Scheme) is liberalised further by enhancing the limit of USD 25,000 per calendar year to USD 50,000 per financial year (April- March) for any current or capital account transactions or a combination of both. In addition, as a measure of rationalization, it has also been decided that

3. In addition, the existing facility of release of exchange by Authorised Persons up to USD 10,000 or its equivalent in one calendar year on a declaration basis for one or more private visits to any country (except Nepal and Bhutan) will continue to be available on a self-declaration basis. However, the facility would be now available on a financial year (April-March) basis.

4. As indicated in A.P (DIR Series) Circular No.80 dated March 18, 2004, soliciting of deposits etc. under the Scheme by entities which do not have an operational presence in India, gives rise to supervisory concerns. It is therefore clarified that all banks, both Indian and foreign, including those not having an operational presence in India should seek prior approval from the Reserve Bank for the schemes being marketed by them in India to residents either for soliciting foreign currency deposits for their foreign/overseas branches or for acting as agents for overseas mutual funds or any other foreign financial services company.

5. The resident individual seeking to make the remittance should furnish an

Application –cum- Declaration in the revised format as at Annex-1.

7. Necessary amendments to (i) Foreign Exchange Management (Current Account Transactions) Rules, 2000 (ii) Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 and (iii) Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2000 are being notified separately.

9. The directions contained in this Circular have been issued under Section 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Salim Gangadharan)
Chief General Manager-in-Charge

[A.P.(DIR Series) Circular No.24
dated December 20, 2006]

Application cum Declaration for purchase of foreign exchange under the Liberalised Remittance Scheme of USD 50,000
(To be completed by the applicant)

a. Name …………………………..

b. Address…………………………

c. Account No……………………..

d. PAN No………………………….

1. Amount (Specify currency)………………………………

2. Purpose ………………………………………………….

III. Source of funds: ………………………………….

Draft………………………..

Direct remittance…………

Date :……………… Amount :………….

1. Name ……………………..

2. Address ……………………

3. Country ……………………

4*. Name and address of the bank……………………….

5*. Account No……………………………………………..

(* Required only when the remittance is to be directly credited to the bank account of the beneficiary)

Signature of the applicant

(Name)

This is to certify that the remittance is not being made by/ to ineligible entities and that the remittance is in conformity with the instructions issued by the Reserve Bank from time to time under the Scheme.

Name and designation of the authorised official:

Place:

Signature

Date: Stamp and seal

Name and designation of the authorised official:

Place:

Signature

Date: Stamp and seal