RBI Guidelines

(Updated as per Master Direction No.03 ,07 ,08 -2015/16 dated January 01,2016) These are only a brief extract and for the details kindly refer to the above Master Directions and amendments, if any, thereto in RBI website – www.rbi.org.in

Authorized Dealer Category II can undertake the following activities :
S.No Permitted Activities for AD Cat-II
a Private Visits [ LRS ]
b Remittance by tour operators/travel agents to overseas agents/principals/hotels
c Business Travel [ BT ]
d Fee for participation in global conferences and specialized training
e Remittance for participation in international events/competitions[towards training sponsorship and prize money]
f Film shooting
g Medical treatment abroad
h Disbursement of Crew Wages
i Overseas Education
j Remittances under Educational tie up arrangements with Universities abroad
k Remittance towards fees for examinations held in India and abroad and additional score sheets fro GRE,TOEFL etc.,
l Employment and Emigration Consultancy Fees
m Employment and processing ,assessment fees for overseas job applications
n Skills, Credential assessment fees for intending migrants
o Visa Fees
p Processing Fees for registration of documents as required by the Portuguese/other Governments
q Registration/Subscription/Membership Fees to International Organizations

» Purchase – from Residents/Non-Residents
» Sales to Residents for LRS ( Liberalized Remittance Scheme ) Travel & Business Travel

DETAILS OF THE ENTITLEMENTS,DOCUEMNTS, TERMS & CONDITIONS OF RELEASE OF FOREIGN EXCHANGE
S# Purpose of Visit Foreign Exchange
entitlement as per RBI Guidelines 		Product Mode Prescribed documents / Terms / Conditions
1 Leisure Trip ( LRS-Liberalised Remittance Scheme ) US$ 250,000 Foreign Currency Travellers Cheque & Travel Card For one or more private visits outside the country abroad, except Bhutan & Nepal. On the basis of declaration given by traveller regarding amount of foreign exchange availed during the financial year(including usage of ICC/IDC/ATM cards)
1. In all cases of sale irrespective of the amount involved:

a) For identification purpose the passport of the traveller & PAN Card should be insisted upon. Air ticket, visa for the country of travel to be verified.

b) The sale should be made only on personal application and identification.

c) Payment in excess of Rs: 50,000/- towards sale of foreign exchange should be received only by the applicant’s cross cheque

d) The rupee equivalent of foreign exchange drawn exceeds Rs: 50,000/- either for any single drawal or more drawal reckoned together for a single journey visit. It should be paid by Cheque/ Banker’s Cheque/Pay Order/Demand Draft.

e) Foreign Nationals permanently resident in India are also eligible to avail of quota for private visits, provided the applicant is not availing of facilities for remittance of his salary savings, etc. Abroad in terms of extent regulations.

2. All purchases by a person within a month to be treated as single transaction for the purpose.
2 Business Visit US$ 25,000/-( however if an employee is being deputed by an entity for business trip and expneses are borne by the entity, such expneses shall be treated as residual current a/c transactions outside LRS and may be permittd by the AD with out any limits subject to verifying the bonfaide of the transaction) Foreign Currency & Travel Card Establishment of Business Relationship (Corporate Clients) Relationship with a business entity like Company/Firm should be established only after obtaining & verifying suitable documents in support of name, address & business activity, such as:-
• Certification of incorporation under Companies Act, 1956
• MOA/AOA
• Registration Certificate of the Firm
• Partnership Deed
• PAN Card
1. A declaration letter in original from the company/Firm (Business Letter) on its letter head, duly signed by the authorized official of the Company/Firm requesting release of foreign exchange.
2. A list of employees who are authorized to transact on behalf of the Company/firm and documents of their identification together with signatures should be collected and kept on record.
3. Periodically the process should be repeated to update the changes and make it current.
4. Verification of the signature of the authorized executive sending request with list of authorized signature available in the branch (Exchange should not be released to travel agent sponsoring trip abroad and it should be released only to the person travelling abroad after due identification . Release of exchange to travel agent on behalf of traveller is clear violation of instructions).
5. Documents to be collected: copy of the passport, confirmed Air Ticket, copy of the valid visa.
6. To confirm that travel starts within 60 days of sale of foreign exchange.
7. Crossed cheque drawn on the bank account of the firm/company sponsoring the visit of the applicant/banker’s cheque/pay order/demand draft.
8. In case of Travellers Cheque sold, the traveller should sign the Traveller Cheque in the presence of an authorized official and the purchasers, acknowledgement for receipt of the travellers cheques should be held on record.
9. Exchange under business to foreign nationals. Exchange under business travel can be released to foreign nationals for their visits sponsored by the companies/firms, organizations in India where they are employed on regular basis provided he furnishes proper business letters as well as copy of the valid residential permits.

Bringing in and taking out of Foreign Exchange:-

  • Foreign Exchange can be brought into India without limit
  • Declaration in Form CDF necessary if the amount > US$ 10,000/- ( FC Notes + TCs ) and /or FC Notes exceed US$ 5,000/-
  • Taking out Foreign Exchange other than that obtained from AD/AMC prohibited
  • Non-residents can take out Foreign Exchange up to the amount originally brought in

Purchase of foreign currency from Public/Foreign Nationals

  • Purchase from Residents/Non-Residents/Foreign Nationals FC Notes/Coins/TCs subject to submission of CDF (wherever applicable) to be taken.
  • Encashment Certificate to be issued in all cases of Encashment
  • No limit for encashment is prescribed, if declared on the Currency Declaration Form (CDF) on arrival to the customs authorities.
  • No declaration in CDF is required for Foreign Currency with aggregate value up to US$5,000/- or equivalent.
  • No declaration in CDF is required for FC+TC with aggregate value up to US$ 10,000/- or equivalent.
  • For purchase of Foreign Currency Notes and / or Travelers Cheques from customers for any amount less than Rs:50,000/-or its equivalent, copies of identification documents not required, However details of the identification documents to be furnished by the customer /to be kept on record by the AMC.
  • For Purchase of foreign currency notes and /or Travellers Cheques from customers for any amount equal to or in excess of Rs: 50,000/- or its equivalent, documents, as mentioned at part B of annex –I ofMaster Direction No.03 2015-16 dated January 01,2016..
  • Permissible limit for cash payments against encashment:
    • Foreign Nationals up to – US$ 3,000/-
    • Residents up to – US$ 1,000/-
  • All other cases of encashment, payment to be made by way of Account Payee cheque or demand draft only.
  • Payment to be made only by cheque/DD/NEFT/RTGS if purchases are from other FFMC/AD’s.
  • Sale against application, identification documents and declaration regarding Foreign Exchange availed during the financial year.
  • LRS visit-up to US$ 250,000 per financial year.
  • Business visit –up to US$ 25,000/- per trip for Business/Conference/Training etc.
  • TC issue subject to conditions of TC issuing company.
  • Traveller to sign on the TC in the presence of authorized official of AMC.
  • Payment in excess of ₹ 50,000/- to be received by Cheque/DD/NEFT/RTGS.
  • Foreign Currency Notes up to US$ 3,000/- and balance in TCs/Travel Cards
  • Exemptions:
    • Travellers visiting - Libya & Iraq up to US$ 5,000/- or its equivalent
    • Travellers Visiting - Islamic Republic of Iran, Russian Federation and commonwealth of independence states-entire exchange to be released in Foreign Currency notes.

Sales against Reconversion of Indian Currency

  • Non-residents are allowed to reconvert unspent INR at the time of their departure subject to production of a valid Encashment Certificate.
  • Non-residents are allowed to reconvert INR up to Rs: 10,000/- without a valid encashment Certificate, for bonafide reasons, if departure is scheduled to take place within the following seven days.
  • Facility for reconversion of Indian Rupees to the extent of Rs:50,000/- to foreign tourists(not NRIs) against ATM Receipts, are allowed subject to submission of the following documents:
    • Valid Passport and VISA
    • Confirmed ticket for departure within 7 days
    • Original ATM slip (to be verified with the original debit/credit card)