Duties of Authorised Person [ Section 10(4) ] - FEMA Ready Reckoner - FEMA

Duties of Authorised Person The authorised person shall comply with directions (special or General) or orders of RBI in all his dealing in foreign exchange or foreign securities. An authorised person except with the previous permission of the Reserve Bank, can not engage in any transaction involving any foreign exchange or foreign security which is not in conformity with the terms of his authorisation under this section. [ Section 10(4) of FEMA Act ] The duties of authorised dealer under section 10(4) of FEMA Act was considered in CITIBANK, N.A. Vs Director, Enforcement Directorate [ 2009 (6) TMI 1029 - Appellate Tribunal for Foreign Exchange, New Delhi ] In this case the appellant -Bank was granted license to act as authorised dealer under section. It was alleged that the appellant had allowed deposit foreign currency totaling to US Dollars 72800 in NRE account on nine different occasions within short span of one week. In reply to the show-cause notice, the appellant -bank denied the allegation. Penalty was imposed on the ground of contravention, among others, of Section 10(4) of FEMA Act . Important and relevant Notification and Circular 1. Remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS) [ A.P. (DIR Series) Circular No. 15 Dated 10th July 2024 ] At present, remittances under LRS to IFSCs can be made only for: i. Making investments in IFSCs in securities except those issued by entities/ companies resident in India (outside IFSC); and ii. Payment of fees for education to foreign universities or foreign institutions in IFSCs for pursuing courses mentioned in the gazette notification no. SO 2374(E) dated May 23, 2022 , issued by the Central Government. For these permissible purposes, resident individuals can open Foreign Currency Account (FCA) in IFSCs. On a review, it has been decided that Authorised Persons may facilitate remittances for all permissible purposes under LRS to IFSCs for: i. Availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019 within IFSCs; and ii. All current or capital account transactions, in any other foreign jurisdiction (other than IFSCs) through an FCA held in IFSCs. For these permissible purposes, resident individuals can open Foreign Currency Account (FCA) in IFSCs. 2. Export-Import Bank of India (Exim Bank) has entered into an agreement dated February 29, 2024 with the Government of the Co-operative Republic of Guyana (GO-GUY), for making available to the latter, Government of India supported Line of Credit (LoC) of USD 2.50 mn (USD Two Million Five Hundred Thousand Only) for installation of Solar Photo Voltaic Power Plant at Cheddi Jagan International Airport in Guyana. [ A.P. (DIR Series) Circular No. 14 Dated 8th July 2024 w.e.f. 24.06.2024 ] 3. Release of Foreign Exchange for Miscellaneous Remittances Authorised Dealers are permitted to release foreign exchange for any current account transaction, on the basis of a simple letter containing basic information viz., name and the address of the applicant, name and address of the beneficiary, amount to be remitted and purpose of remittance. It was also advised that Authorised Dealers need not obtain any other documents, including Form A2 , and that the payment was to be made by the applicant through Demand Draft or a cheque drawn on his / her bank account. Threshold Limit From 07/07/2024 - Authorised Dealers shall obtain Form A2 in physical or digital form for all cross-border remittances irrespective of the value of transaction. [ A.P. (DIR Series) Circular No. 13 Dated 03.07.2024 ] From 07.05.2012 - Authorised Dealers were advised to release amounts up to USD 25000 or its equivalent [ A. P. (DIR Series) Circular No.118 dated 07.05.2012 ] From 23/12/2003 to 06/05/2012 - Authorised Dealers were advised to release amounts up to USD 5000 or its equivalent. [ A.P.(DIR Series) Circular No. 55 Dated 23.12.2003 ] From 12/09/2002 - Authorised Dealers were advised to release amounts up to USD 500 or its equivalent. [ A.P.(DIR Series) Circular No 16 dated 12.09.2002 ] 4. International Trade Settlement in Indian Rupees (INR) (Through open Rupee Vostro Accounts) [ A.P. (DIR Series) Circular No.10 Dated 11.07.2022 ] 5. Export-Import Bank of India (Exim Bank) s Government of India-supported Line of Credit of USD 23.37 mn to the Government of the Co-operative Republic of Guyana (GO-GUY), for procurement of two Hindustan 228-201 aircraft from Hindustan Aeronautics Ltd. [ A.P. (DIR Series) Circular No. 10 Dated 11.06.2024 ] 6. Discontinue the requirement for submission of LRS monthly return by AD Category-I banks from the reporting month of September 2024, AD Category-I banks shall not submit LRS monthly return (Return code : R089). AD Category-I banks, henceforth, will be required to upload only transaction-wise information under LRS daily return (CIMS return code: R010) at the close of business of the next working day on CIMS (URL: https://sankalan.rbi.org.in). In case no data is to be furnished, AD Category-I banks shall upload a NIL report. [ A.P. (DIR Series) Circular No. 16 Dated 06.09.2024 ]