TMI BlogMaster Direction - Other Remittance Facilities (Updated as on April 03, 2024)X X X X Extracts X X X X X X X X Extracts X X X X ..... ns issued on remittance facilities for residents have been compiled in this Master Direction. The list of underlying circulars/ notifications which form the basis of this Master Direction is furnished in the Appendix. Reporting instructions can be found in Master Directions on reporting ( Master Direction No. 18 dated January 01, 2016 ) 4. It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Regulations or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Master Direction issued herewith shall be amended suitably simultaneously. Yours faithfully, (Puneet Pancholy) Chief General Manager INDEX Sr. No. Contents 1. Release of Foreign Exchange by Authorised Dealers 2. Release of Foreign Exchange by Authorised Dealer Category II 3. Remittance facilities for resident individuals 3.1 Travel 3.2 Remittance of salary 3.3 Meeting of medical expenses of NRI close relatives by resident individuals 3.4 International Credit cards/International Debit cards/Store value cards etc. by Authorised Dealers in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk, under whose jurisdiction the applicant is functioning / residing. 1.2 Drawal of foreign exchange also includes use of International Credit Cards (ICC), International Debit Cards (IDC), ATM cards, etc. Currency , interalia, includes ICC, IDC and ATM Cards. Accordingly, all Rules, Regulations made and Direction issued under the Act apply to the use of ICC, IDC and ATM Cards. 1.3 Release of foreign exchange is not admissible for travel to and transaction with residents of Nepal and Bhutan. 1.4 Prohibition: Remittances in any form towards participation in lottery schemes are prohibited under the Foreign Exchange Management Act, 1999. Further, these restrictions are also applicable to remittances for participation in lottery like schemes existing under different names like money circulation scheme or remittances for the purpose of securing prize money/awards, etc. 1.5 Fraudulent offers: There is a spate of fictitious offers of cheap funds in recent times from fraudsters through letters, e-mails, mobile phones, SMS, etc. Communications on fake letterheads of the Reserve Bank and purportedly signed by its top executives / senior officials are also being sent to targeted people. Many r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and additional score sheets for GRE, TOEFL, etc. Employment and processing, assessment fees for overseas job applications, Emigration and emigration consultancy fees, Skills / credential assessment fees for intending migrants, Visa fees, Processing fees for registration of documents as required by the Portuguese / other Governments, Registration / subscription / membership fees to International Organisations. 3. Remittance facilities for resident individuals: Remittances for current account transactions (viz. private visit; gift/donation; going abroad on employment; emigration; maintenance of close relatives abroad; business trip; medical treatment abroad; studies abroad) available to resident individuals under Para 1 of Schedule III to Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015 dated May 26, 2015 are subsumed under the Liberalised Remittance Scheme (LRS) of USD 2,50,000 per Financial Year (FY) with effect from May 26, 2015 [Instructions on LRS are available on Master Direction on Liberalised Remittance Scheme dated January 1, 2016]. Release of foreign exchange exceeding USD 2,50,000, requires prior permission from the Reserve Bank of India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her cases, the regulations / directions on surrender requirement shall remain unchanged. (Notification No. FEMA 9/2000-RB dated May 3, 2000, as amended from time to time). 3.1.4 Unspent foreign exchange A returning traveller is permitted to retain with him, foreign currency, travellers cheques and currency notes up to an aggregate amount of USD 2000 and foreign coins without any ceiling beyond 180 days. Foreign exchange so retained, can be utilized by the traveller for his subsequent visit abroad. 3.2 Remittance of salary A person who is resident but not permanently resident in India and a. is a citizen of a foreign State other than Pakistan; or b. is a citizen of India, who is on deputation to the office or branch of a foreign company or subsidiary or joint venture in India of such foreign company, may make remittance up to his net salary (after deduction of taxes, contribution to provident fund and other deductions). Explanation: For the purpose of this item, a person resident in India on account of his employment or deputation of a specified duration (irrespective of length thereof) or for a specific job or assignments, the duration of which does not exceed three years, is a res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and Bhutan is not permitted. ADs may issue ICCs to NRIs/PIOs, without prior approval of the Reserve Bank, subject to the condition that charges on the use of ICCs should be settled by the concerned NRIs/PIOs only out of inward remittances or balances held in their Non-Resident External (NRE) Accounts/ Foreign Currency Non-Resident (FCNR) Accounts. 3.4.2. International Debit Cards (IDC) Banks authorised to deal in foreign exchange may issue International Debit Cards (IDCs) which can be used by a resident for drawing cash or making payment to a merchant establishment overseas during his visit abroad. IDCs can be used only for permissible current account transactions and the limits as mentioned in the Schedules to the Rules, as amended from time to time, are equally applicable to payments made through use of these cards. The IDCs cannot be used on internet for purchase of prohibited items like lottery tickets, banned or proscribed magazines, participation in sweepstakes, payment for call-back services, etc., i.e. for such items/activities for which drawal of foreign exchange is not permitted. 3.4.3. Use of credit / debit cards for payments for airline tickets In certain cases where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion till the completion of the respective settlement cycle; A small balance not exceeding US$ 100, for meeting any pipeline transactions till the completion of the respective settlement cycle; and Transaction fees / service tax payable in India in Rupees. For the amount that are authorized but unclaimed/ not settled by the acquirer, the issuer of such cards can hold such amounts until such transactions are processed/ settled by the acquirers within the prescribed settlement timeframe. 4. Remittance facilities for others: 4.1. Gift/donation General permission is available to persons other than individuals to remit towards donations up-to one per cent of their foreign exchange earnings during the previous three financial years or USD 5,000,000, whichever is less, for (a) creation of Chairs in reputed educational institutes, (b) contribution to funds (not being an investment fund) promoted by educational institutes; and (c) contribution to a technical institution or body or association in the field of activity of the donor Company. Any additional remittance in excess of the same shall require prior approval of the Reserve Bank of India. Applications for remittances for purposes other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the Reserve Bank. 4.7. Bids in foreign currency for projects to be executed in India Persons resident in India are permitted to incur liability in foreign exchange and to make or to receive payments in foreign exchange, in respect of global bids where the Central Government has authorised such projects to be executed in India. In such cases, authorised dealers may sell foreign exchange to the concerned resident Indian company which has been awarded the contract. 4.8. Sale of overseas telephone cards Authorised Dealers may allow agents in India of the overseas organisations issuing pre-paid telephone cards to remit the sale proceeds of such cards, net of their commission, to the issuers of the telephone cards. 4.9. Liberalization of foreign technical collaboration agreements AD Category-I banks may permit drawal of foreign exchange by persons for payment of royalty and lump-sum payment under technical collaboration agreements without the approval of Ministry of Commerce and Industry, Government of India. 4.10. Drawal of foreign exchange for remittance for purchase of trademark or franchise in India AD Category-I banks may permit drawal of foreign exchange by person for purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry is not Pakistan. 5. Issue of Guarantee Import of service 5.1. AD Category-I banks are permitted to issue guarantee for amount not exceeding USD 500,000 or its equivalent in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, provided: The AD Category-I bank is satisfied about the bonafides of the transaction. The AD Category-I bank ensures submission of documentary evidence for import of services in the normal course. The guarantee is to secure a direct contractual liability arising out of a contract between a resident and a non-resident. 5.2. In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for issue of guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would be required. 6. Operational instructions to Authorised Persons 6.1. Reserve Bank will not prescribe the documents which should be verified by the Authorised Persons while permitting remittances for various transactions, particularly of current account. 6.2. In terms of the provisions contained in sub-section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if and as may be necessary, to establish the permissibility of the remittances under the extant rules or regulations framed under FEMA, 1999. Remittances that do not require any documentation (e.g. certain transactions under the LRS) may be put through on the basis of the Form A2 alone. To start with, remittances on the basis of online submission alone will be available for transactions with an upper limit of USD 25,000 (or its equivalent) for individuals and USD 100,000 (or its equivalent) for corporates. It may be noted that the remittance will be subject to satisfaction of the Authorised Dealer banks as laid down in Section 10 (5) of FEMA. Accordingly, Authorised Dealer banks may frame appropriate guidelines for customer interface personnel to ensure ease of transactions for the customers within the ambit of the statutory/regulatory provisions. Appropriate changes in technology and/or operating procedure may be carried out by Authorised Dealer banks immediately. 7. Income- tax clearance Reserve Bank of India will not issue any instructions under the FEMA, regarding the procedure to be followed in respect of deduction of tax at source while allowing remittances to the non-residen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter. 6. (1) Nothing contained in Rule 4 or Rule 5 shall apply to drawal made out of funds held in Exchange Earners Foreign Currency (EEFC) account of the remitter. (2) Notwithstanding anything contained in sub-rule (1), restrictions imposed under rule 4 or rule 5 shall continue to apply where the drawal of foreign exchange from the Exchange Earners Foreign Currency (EEFC) Account is for the purpose specified in items 10 and 11 of Schedule II, or item 3, 4, 11, 16 17 of Schedule III as the case may be. 7. Use of International Credit Card while outside India Nothing contained in Rule 5 shall apply to the use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India. Schedule I Transactions which are Prohibited (see Rule 3) 1. Remittance out of lottery winnings. 2. Remittance of income from racing/riding etc. or any other hobby. 3. Remittance for purchase of lottery tickets, banned /proscribed magazines, football pools, sweepstakes, etc. 4. Payment of commission on exports made towards equity investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... USD 2,50,000 only. Any additional remittance in excess of the said limit for the following purposes shall require prior approval of the Reserve Bank of India. Private visits to any country (except Nepal and Bhutan). Gift or donation. Going abroad for employment. Emigration. Maintenance of close relatives abroad. Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up. Expenses in connection with medical treatment abroad. Studies abroad. Any other current account transaction Provided that for the purposes mentioned at item numbers (iv), (vii) and (viii), the individual may avail of exchange facility for an amount in excess of the limit prescribed under the Liberalised Remittance Scheme as provided in regulation 4 to FEMA Notification 1/2000-RB, dated the 3rd May, 2000 (here in after referred to as the said Liberalised Remittance Scheme) if it is so required by a country of emigration, medical institute offering treatment or the university, respectively: Provided further that if an individual remits any am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding five per cent of investment brought into India or USD 100,000 whichever is higher, by an entity in India by way of reimbursement of pre-incorporation expenses. 3. Procedure The procedure for drawal or remit of any foreign exchange under this schedule shall be the same as applicable for remitting any amount under the said Liberalised Remittance Scheme. Note: The principal rules were published in Part II, Section 3, Sub-section (i) of Gazette of India, Extraordinary, vide G.S.R. 381(E), dated the 3rd May, 2000. APPENDIX-1 Sl. No. Circular No. Title Date 1 A.P.(DIR Series) Circular No.1 Foreign Exchange Management Act (FEMA), 1999 June 1, 2000 2 A.P.(DIR Series) Circular No.19 Foreign Exchange Management Act , 1999 - Foreign Travel October 30, 2000 3 A.P.(DIR Series) Circular No.20 Foreign Exchange Management Act , 1999 Foreign Travel November 16, 2000 4 A.P.(DIR Series) Circular No.11 Release of Foreign Exchange for visits abroad - Currency Component November 13, 2001 5 A.P.(DIR Series) Circular No.53 Use of Credit Cards June 27, 2002 6 A.P.(DIR Series) Circular No.16 Release of Foreign Exchange for Small Value Remittances September 12, 2002 7 A.P. (DIR Series) Circular No.37 Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (FEMA), 1999 Current Account Transactions Remittance of Hiring Charges of Transponders Procedural Changes October 25, 2004 26 A.P. (DIR Series) Circular No.38 Liberalised Remittance Scheme of USD 25,000 for Resident Individuals March 31, 2005 27 A.P. (DIR Series) Circular No.46 Use of International Debit Cards/Store Value Cards/Charge Cards/Smart Cards by Resident Indians while on a visit outside India June 14, 2005 28 A.P. (DIR Series) Circular No.25 Authorised Persons- Categorisation March 6, 2006 29 A.P. (DIR Series) Circular No.13 Issue of Bank Guarantee on behalf of service importers November 17, 2006 30 A.P. (DIR Series) Circular No. 14 Foreign Exchange Management Act (FEMA), 1999 Current Account Transactions Liberalisation November 28, 2006 31 A.P. (DIR Series) Circular No. 24 Liberalised Remittance Scheme of USD 50,000 for Resident Individuals December 20, 2006 32 A.P. (DIR Series) Circular No. 38 Foreign Exchange Management Act (FEMA), 1999 Current Account Transaction Rules Amendment April 5, 2007 33 A.P. (DIR Series) Circular No. 58 Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 May 18, 2007 34 A.P. (DIR Series) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by Resident Indians while on a visit outside India April 2, 2012 50 A.P. (DIR Series) Circular No. 118 Release of Foreign Exchange for Miscellaneous Remittances May 7, 2012 51 A.P. (DIR Series) Circular No. 106 Liberalised Remittance Scheme for Resident Individuals Reporting May 23, 2013 52 A.P. (DIR Series) Circular No.24 Liberalised Remittance Scheme for Resident Individuals- Reduction of limit from USD 200,000 to USD 75,000 August 14, 2013 53 A.P. (DIR Series) Circular No. 32 Liberalized Remittance Scheme Clarifications September 4, 2013 54 A.P. (DIR Series) Circular No. 138 LRS for resident individuals-Increase in the limit from USD 75,000 to USD 125,000 June 3, 2014 55 A.P.(DIR Series) Circular No. 5 LRS for resident individuals-Increase in the limit from USD 75,000 to USD 125,000 July 17, 2014 56 A.P. (DIR Series) Circular No. 19 Liberalised Remittance Scheme for resident individuals-clarification August 11, 2014 57 A.P. (DIR Series) Circular No. 40 Release of Foreign Exchange for Haj/ Umrah pilgrimage November 21, 2014 58 A.P.(DIR Series) Circular No. 106 I. LRS for resident individuals- increase in the limit from USD 125,000 to USD 250,000 and rationalisation of current a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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