Saturday, January 5, 2013


1)   FEMA 1999 (Foreign Exchange Management Act 1999) came into effect from 01/06/2000, replacing FERA (Foreign Exchnge Regulation Act)
2)    NRI is an Indian, holding Indian Passport and (1) who has gone abroad for gainful Employment, Business or Vocation or any other purpose for an indefinite period of stay (2) who is working abroad on assignments with Foreign Govts, Govt / International/ Regional Agencies (3) who is deputed abroad from Govt or PSU on temporary assignment and (4) Students going abroad for studies.
3)   PIO / NRIO (Person of Indian Origin / Non Resident of Indian origin) is a person (1) who was holding Indian Passport any time earlier (2) whose parents / grand parents were Indian citizens and (3) spouse of the above. All facilities available for NRI are applicable to PIO/NRIO.
4)   Authorised Dealers are now called as Authorised Persons
5)   Authorised Persons are classified into 3 categories
6)    AD Category I are  Commercial Banks, State and Urban Coop Banks
7)    Ad Category II are Coop Banks, RRBs Upgraded Full Fledged Money Changers, others
8)    AD Category III are Select Financial Institutions and others
9)    FFMCs – Full Fledged Money Changers are Postal Dept, Urban coop Banks not included under Category I and other FFMCs
10)Non Resident Indians, Persons of Indian Origin (Non Resident of Indian origin) can open NRO,NRE,FCNR (B) a/cs.
11)Under SB & CA , they can open NRO & NRE a/cs.
12) Under Term deposits they can open NRO,NRE AND FCNR a/cs.
13)RD can be opened in NRO & NRE only.
14)NRO / NRE a/cs are maintained in Indian rupees
15)Local funds cannot be credited in NRE a/c, unless the funds are from investments made out of NRE funds.
16)Proceeds of DD/banker’s cheques issued against encashment of foreign currency can be credited to NRE account of an NRI, where the instruments are supported by Encashment certificate issued by AD cat I and II Banks.
17)FCNR a/cs are maintained in Foreign Currency – USD, POUND STERLING, EUR, CAD & AUD
18)RBI has permitted FCNR to be opened in USD, PND STG, EUR, CAD, AUD & JAPANESE YEN.
19)Joint NRO a/c can be opened _ at least one person must be an NRI.
20)Joint NRE a/c can be opened – all must be NRIs.
21)TOD in NRO a/c- No ceiling; NRE a/c – Rs 50,000,(Max) – both subject to delegation of powers.
22)Nominee can be a Resident or Non-Resident.
23)TDS on NRO interest – NRIs residing in DTAA Countries and who has given declaration to that effect- Concessional ROI
24)TDS on NRO interest – NRIs residing in DTAA countries and not given declaration to that effect & NRIs living in NON – DTAA countries – 30.90 % and if interest amount exceeds Rs.Ten lakhs – 33.99%
25)NRE/FCNR Funds are freely repatriable.
26)From NRO a/cs – Sale proceeds of immovable properties held/ inherited  in the name of NRI and for any bonafide purposes – to the extent of USD 1 Million / per financial year can be repatriated, subject to production of documentary proof.
27)Foreign Tourist can open NRO a/cs and the period of stay/account not to exceed six months.
28)Foreigners employed in India can open Domestic a/cs
29)LA holders can operate NRO/NRE accounts  and can transfer abroad funds for credit of account holder only.
30)NRI/PIO NOW can NOT submit form 15G or 15H for the purpose of claiming exemption from TDS on Interest from NRO rupee deposit accounts
31)NRE term deposits-minimum 1 year, Maximum 3 years.
32)NRE term deposits shall be renewed within 14 days – beyond 14 days, it shall be treated as fresh deposits
33)Beyond 14 days it shall be accepted only as fresh deposit in full or in part at the rate ruling on the date of fresh deposit.
34)Simple interest is to be paid for the overdue period, at the rate ruling on the date of maturity for the term for which the deposit is accepted as fresh deposit or the rate at which the fresh deposit is made, whichever is lower.
35)Minimum period -one year from the date of such fresh deposit
36)No interest for NRE deposits closed before one year, from date of deposit.
37)No penal interest for before maturity closure of NRE deposit, beyond one year.
38)At par discount of Foreign Currency instruments for investment in NR / Domestic rupee Term deposits has been withdrawn with immediate effect
39)FCNR (B) deposits – Min 1 year, Max 5 years for USD, PND STG & EUR
40)FCNR (B) deposits – Min 1 year, Max 3 years for CAD &  AUD
41)FCNR (B) KDR – Min period 1 year 1 day
42)FCNR (B) deposits – closure before 1 year – No interest
43)FCNR (B) deposits – closure before maturity after 1 year – eligible interest for the period run minus 1%
44)FCNR (B) deposits shall be renewed from the date of maturity, if done within 14 days. The ROI will be , the rate on date of maturity or on the date of renewal for the renewed period, which ever is lower.
45)Renewal after 14 days, shall be treated as fresh deposit.
46)ROI for broken period – 1 month LIBOR as on date of maturity or on date of renewal , whichever is less, minus 0.50 %, rounded off to lower 0.25 %
47) Proceeds of closed FCNR(B) deposits can be remitted  abroad to the depositor or even to third parties with the consent of the depositor. However, Proceeds of closed NRE deposits cannot be remitted to third parties abroad.
-     Procedure to be followed by branches for Renewal of NRE/NRO/FCNR deposits against which loan liability is still outstanding- The period of loan should not exceed the unexpired period of deposit. If the depositor requests to renew the deposit, as well as the loan, against such deposits, in such case, fresh loan may be granted against the renewed deposit and with the amount of the fresh loans, the existing loan liability may be cleared. Branches to obtain fresh loan papers for the new loan granted.

·      -Interest Rates on Export Credit in Foreign Currency –RBI has reduced the ceiling rate on export credit in Foreign Currency to LIBOR plus 200 basis points from the present ceiling rate of LIBOR plus 350 basis points. Revised rates are applicable for fresh advances granted from 19/02/2010.
48)EEFC –only Current a/c can be opened by Foreign Exchange Earners and Recipients of Inward remittances, in three currencies viz., USD,PND STG, & EUR.
49) ALL FOREX  earners can keep 100 % of their   earnings, export realizations in EEFC a/cs.
50) SEZ developers are allowed to open, hold and maintain and  can credit 100 % of their FOREX earnings in EEFC a/c.
51)Minimum initial deposit – 100 in each currency
52)For cheque book facility –min bal 10,000 in each currency
53)For issue of Cheque book, return of a Cheque and non maintenance of minimum balance (per month) is USD 10 each.
54)Funds in EEFC can be utilized for all bonafide payments of the a/c holder abroad in connection with Trade & Business related transactions, Hotel, Medical, air fare and Educational expenses.
55)EEFC funds can be utilized for clearing PC/FDB/FBE  liabilities, subject to conditions.
56)RFC – NRI/PIO who have returned to India for permanent settlement, can open SB, CA and Term Deposits (excluding RD) in USD, PND STG, EUR, CAD & AUD.
57)Minimum 100 units in each currency for RFC SB– For earning Interest in SB Min 1000 in each currency
58)Minimum 1000 units in each currency for RFC CA and Term Deposits.
59)RFC Term deposits – Min 1 month  - Max 3 years. For one week deposit, minimum USD 2,50,000/
60)RFC Term Deposits - Before maturity closure - 1 % Penal cut from ROI  for period run.
61)RFC funds can be repatriated for bonafide purposes / utilized for local payments.
62)RFC Domestic – Resident Indians who are recipients of Foreign Exchange received for Services/ honorarium /gifts and unspent Foreign Exchange – can open only current a/c.
63)Minimum – 1000 units in USD, PND STG & EURO.
64)RFC Domestic funds can be used for local disbursements and for payment of current and capital account transactions as per FEMA.
65)Currency declaration form ( CDF ) is to be submitted by the person encashing, if the person is bringing USD currency 5000 or its equivalent in other currencies or Foreign Currency and FCTC, both put together exceeds USD 10,000 or its equivalent in other currencies.
66)Permitted currencies for encashment  - USD, PND STG, EURO & SWISS FRANCS.
67)Encashment certificate can be issued on Bank’s letter head irrespective of amount.
68)Immediate credit facility for USD instruments payables in USA upto USD 10,000 for branches headed by Sc IV and above. For other branches headed by MGRs/SMs, existing limit of USD 5000 shall continue.
69)A Resident Individual can freely remit up to USD 2,00,000 per Financial Year under Liberalised Remittance Scheme.
70)If an NRI ,on temporary visit to India, produces an encashment certificate with Rupee funds , it can be credited to his NRE account.
71)Maximum Foreign Exchange that can be released for Studies abroad is USD 1 Lac per financial year on self declaration basis.
72)Maximum Foreign Exchange that can be released for Medical Expenses  is USD 1 Lac per Financial Year on declaration basis. If Doctor’s estimate is available, upto that extent can be remitted and RBI approval is required beyond Doctor’s estimate.
73)Surrender of Foreign Exchange by Resident Individuals- Uniform Period of 180 days from the date of receipt/realization/purchase/acquisition/date of return of traveler (IO 48/07)
74) Notional rate w e f  19/09/2008   (IO 69/2008)
·      USD           -1                          =       Rs.45.00
·      PND STG     -1                          =       Rs.80.00
·      EURO          -1                          =       Rs.64.00
·      CAD           -1                          =       Rs.42.00
·      AUD           -1                          =       Rs.36.00
·      JAP YEN  -100 =       Rs.42.00 


75)Importer Exporter Code NO. (I E CODE NO.)  is issued by DGFT and every Exporter/Importer shall obtain the same.
76)Packing Credit Advance can be granted for procuring raw materials, processing, manufacturing, storing and shipping of goods.
77)PC shall be granted after obtaining OPL on the buyers.
78)PC to be granted against Export Orders/ LCs, secured by goods meant for goods.
79)Waiver of Production of Export Orders/LCs can be considered on merits, subject to conditions.
80)Running account facility under Packing Credit can be permitted to good track record, S1, S2 parties for all commodities.
81)Exporter should not be in the Caution List of RBI.
82)Exporter’s name should not be in the Specific Approval List (SAL) of ECGC.
83)Export is not to a Listed country of ECGC
84) Goods should not be in the Negative List (Trade Policy 2009-14)
85)PC can be granted initially upto operating cycle period and can be extended upto 180 days by reviewing authority  and by further 90 days if need be , by only by DGM/GM of Circle.
86)PC may also be extended by another 90 days i.e., up to 360 days if the reasons for extension are genuine by DGM/ GM of the circle
87) PC can be granted for a period up to 270 days at concessional ROI
88)Ultimately, if Export takes place within 360 days, beyond 270 days, ROI will be ECNOS ( Base rate+ 5.5% = 15.5% -  )

89)At the Apex level, HO has taken an open Guarantee for 400 crores from ECGC for Packing Credit which is now called as Export Credit Insurance for Banks (Whole Turnover Packing Credit) - [ECIB (WT-PC)]
90)Branches granting Packing credits shall report to ECGC within 30 days of sanction.
91)Automatic cover is available for limit up to 1 crore FOR S1,S2 PARTIES AND New parties irrespective of limit. This limit is called as Discretionary limit. Beyond this limit ECGC’s prior approval is necessary.
92)For sub-standard, doubtful, loss assets Prior approval is necessary, irrespective of the amount.
93)For accounts slipped from Standard, prior approval is necessary irrespective of the amount.
94)Fresh limits/renewals/enhancements/reduction of limits and extension of PC period upto 360 days shall be reported to ECGC.
95)Extension of PC period beyond 360 days requires, ECGC’s prior permission.
96)PC Liability can be cleared out of proceeds of Export bills. It can also  be cleared from EEFC or Domestic sources, provided Shipment has taken place.
97)Under running account facility, First Debit will be wiped out by First Credit, (FIFO method) without correlating
98)PCFC (Packing Credit in Foreign Currency) also can be availed with a minimum of USD 10,000, in multiples of USD 1000 or its equivalent in other FCs PND STG  and EUR.
99)ROI for PCFC- Composite ROI – LIBOR + 2 %
100) For PCFC/BRD, OPE is to be collected at (IO 14/2007)
   A] Rs. 500 for every fresh PCFC and BRD disbursement.
          B] Rs. 250 on conversion of PCFC to BRD

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