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Authorised Person [Section 10 (1)] - FEMA Ready Reckoner - FEMAExtract Authorised Person The definition of authorised person not only absorbs the terms 'authorised dealer' and 'money changer' but also adds the new term offshore banking unit . In terms of section 10(1) of FEMA Act,1999 define Authorised Person the Reserve Bank may, on an application made to it in this behalf, authorise any person to be known as authorised person to deal in foreign exchange or in foreign securities, as an authorised dealer, money changer or off-shore banking unit or in any other manner as it deems fit. As per Section 2(c) of the FEMA Act authorised person means an Authorised dealer, Money changer, Off-shore banking unit or Any other person for the time being authorised under sub-section (1) of section 10 to deal in foreign exchange or foreign securities; . Authorised Dealer Authorised Dealer define in the Regulation 2(ii) of the Foreign Exchange Management [ Export of goods and Services ] Regulation 2015 . Clause (ii) of the said Regulation is extracted below for convenience of reference . Authorised Dealer means a person authorised as an authorised dealer under sub-section (1) of section 10 of the FEMA Act , and includes a person carrying on business as a factor and authorised as such under the said section 10 of FEMA Act, 1999. Authorised Money Changer Money Changer are authorised by RBI only to (a) purchases foreign currency in form of traveller's cheques , notes, or coins or (b) sale foreign currency in form of coins and notes. They can sale/purchases foreign exchange as per guidelines issued by RBI. Money Changer can only deal in coins, notes, and travellers cheques. The Authorised Money Changer may be FFMC (Full Fledged Money changer) or RMC (Restricted Money Changer). FFMC (Full Fledged Money changer) - FFMCs are authorised to purchase foreign exchange from non-residents visiting India and residents, and to sell foreign exchange for private and business travel purposes only. Authorised Dealers and FFMCs can appoint Franchisees. RMC (Restricted Money Changer) - Some large hotels and shops, leading travel agencies etc. are appointed as Restricted Money Changer . the Restricted Money Changer can only purchases foreign currency and accept travellers cheque. such Acceptance may be for accepting value of goods / services sold by them or even for converting into rupees. however RMCs cannot sell foreign exchange. All Authorised Money Changer licenses from RBI to deal in Foreign Exchange. RBI Master Circular No. 10/2015 dated 01-07-2015 om memorandum of instruction Governing Money Changing Activities gives consolidated instructions on this issues. Offshore Banking Unit Offshore Banking unit is new concept under FEMA. An offshore banking unit can be appointed as 'Authorised Agent'. Offshore Banking units can be set up in Special Economic Zone(SEZ) as per Foreign Exchange Management (Offshore Banking unit) Regulation, 2002. Offshore Banking Unit has been defined in the Regulation 2 of the Foreign Exchange Management (offshore Banking Unit) Regulation 2002 ' Offshore Banking Unit' means a branch of a bank in India located in the Special Economic Zone and holds an authorisation issued under section 23(1)(a) of the Banking Regulation Act, 1949; Transactions which may be undertaken by an Offshore Banking Unit An Offshore Banking Unit shall not conduct any activity or undertake any transaction with resident in India . An Offshore Banking unit may undertake any transaction with any Authorised Dealer in India on Principal - to - Principal basis . ( Regulation 6 ) Offshore Banking Unit may undertake transactions in Foreign Exchange with a unit in the Special Economic Zone (SEZ) to the extent the latter is eligible to enter into or undertaken such transactions., within the ceilings and subject to the conditions specified in the Regulations governing such Transactions. ( Regulation 7 ) Engagement of an Offshore Banking Unit in any of the forms of business specified in section 6(1) of the Banking Regulation Act, 1949 shall be only in foreign exchange and shall be subject to these Regulations and the conditions of licence issued under the said Act . ( Regulation 8 ).
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