IMPORTANT
PROVISIONS FROM FEMA RELEVANT PROVISIONS OF EXCHANGE
CONTROL MANUAL FOR THE PURPOSE OF FEMA Some of the relevant provisions
of Exchange Control Manual under FEMA, which are still existing are: 1.
REFUND OF INWARD REMITTANCES If a request is made from the overseas
for cancellation of Inward Remittances, Authorised Dealers may do so without referring
to Reserve Bank, if refunds is not to compensate for a loss. 2. APPLICATION
FOR REMITTANCES IN FOREIGN CURRENCY A person firm or bank may
apply to an Authorised Dealer for remittances in any foreign currency to a beneficiary
abroad. Application should be made in FORM -A1, if the purpose
of remittance is import of goods into India. For any other purpose
in Form -A2 The Authorised Dealer may sell the foreign Exchange
applied for if he think fit provided it is within his powers, and the purpose
of remittance is an approved one.
3. MODE OF PAYMENT OF RUPEES
AGAINST SALE OF FOREIGN EXCHANGE In case of sale of foreign Exchange
or remittance foreign Exchange amounting to Rs. 20,000 or more the payment received
by the Authorised Dealer, from the applicant should be through a crossed cheque
drawn on the applicant bank account or on the bank account of the Firm/ Company.
Payment can also be accepted in the form of a Banker's cheque / Pay Order / Demand
Draft. Receipt of Payment in cash in case of such sale of foreign Exchange
or remittance in foreign Exchange is strictly prohibited. EXCEPTION: However
where purpose of sale of foreign exchange is for travel abroad for business etc,
cash may be received by Authorised Dealer from Applicant upto Rs. 50,000/- Where
the rupee equivalent for drawing foreign exchange exceeds Rs. 50,000 either for
any single installment or for more than one installment recokned--- together for
a single journey / visit it should be paid by the traveler by means of a gross
cheque / demand draft/ pay order as stated above. 4. TRAVELLERS CHEQUE
NEGOTIABLE ONLY IN INDIA Rupee Travellers cheque cannot be encashed
outside India, if they are issued solely for use within India. In such a case
they cannot be taken or sent out of India. Reimbursements should be strictly
refused where such travellers cheques have been encashed outside India. 5.
REIMBURSEMENT OUTSIDE INDIA Rupee Travellers cheque, which are issued
by authorised dealers, encashable outside India, may be reimbursed by Authorised
Dealers or by their selling Agent. 6. IMPORT OF FOREIGN CURRENCY NOTES When
the stock of foreign currency notes with Authorised Dealer is not adequate for
meeting their normal business requirement they could import foreign currency notes
from their overseas branches or correspondents. 7. RECONVERSION OF INDIAN
CURRENCY Foreign currency may be sold against Indian Rupees
held by persons who are not resident of India but are passing through or leaving
India after a visit, at the time of their departure from India. For
this purpose, a Bank or Encashment certificate issued by Authorised Dealer, exchange
bureau or Authorised Money changer in form BCI, ECF OR ECR, is required to show
that the rupee had been acquired by sale of foreign Exchange to an Authorised
Dealer or money changer in India. Such a certificate is valid for
such reconversion i.e. a period of three months is not over from the date of sale
of the foreign currency by the traveller.
8. RATES OF EXCHANGE
Authorised dealers and their Exchange bureau may buy from and sell
to public foreign currency notes and coins at rates of exchange determined by
market conditions. Dealings in foreign currency notes and coins between authorised
dealers and between authorised dealers and money changers would also be at rates
determined by market conditions.
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