(1)Foreign Exchange
Management (Export and Import of Currency) Regulations, 2015
RBI Circular
Reference No:RBI/2015-16/310 A.P. (DIR Series) Circular No. 45/2015-16 [(1)/6(R)] dated February 4, 2016
We draw your attention to RBI Notification,bearing No. FEMA.6(R)/ 2015-RB dated December 29,
2015.
Applicability:
All
Authorised Persons
Crux of the Circular:
The RBI notification specified above on Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 replaces the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 and all the amendments thereto.
The major highlights of circular issued by the RBI in this regard are as follows:
A. Export and import of Indian currency and currency notes
a. Any person resident in India
Currency |
Coins |
May take currency lesser than Rs. 25,000/- (per person) outside India (other than Nepal and Bhutan) |
May take or send commemorative coins not exceeding two coins each outside India (other than to Nepal and Bhutan) |
b. Any person resident outside India, other than a citizen of Pakistan or Bangladesh, visiting India:
Currency |
Coins |
May take currency lesser than Rs. 25,000/- (per person) outside India (other than Nepal and Bhutan) |
May bring into India currency note not exceeding 25,000/- (per person) |
Currency here means: currency notes of Government of India and Reserve
Bank of India notes
B. Import of Foreign Exchange into India
A person
may send or bring currency into India in the following manner
|
Sending
currency into India
|
Bringing
currency into India
|
|
May
send foreign currency without any limit.
Foreign
currency in any form other than currency notes, bank notes and travelers
cheques
|
May
bring foreign currency from any place into India without any limit (other
than unissued notes) subject to fulfilling the following requirement:
-
Making a declaration to the Customs authorities
-
However, such declaration need not be made ifthe
aggregate value of the foreign exchange
o
in the form of currency notes, bank notes or
travelers cheques brought by one person at any one time does not exceed
US$10,000 or its equivalent
and/ or
o
the aggregate value of the foreign currency
brought in by a person does not exceed US$5,000 or its equivalent
|
C.
Export of Foreign Exchange and Currency Notes
1. The
authorised person is permitted to send the Indian currency acquired in the
normal course of business
2. Any person
may take or send currency out of India if
a. Cheques drawn on
foreign currency account maintained in accordance with Foreign Exchange
Management (Foreign Currency Accounts by a person resident in India)
Regulations, 2000;
b. foreign exchange
obtained by him by drawal from an authorized person is in accordance with the
provisions of the Act or the rules or regulations or directions made or issued
thereunder;
c. currency in the
safes of vessels or aircrafts which has been brought into India or which has
been taken on board a vessel or aircraft with the permission of the Reserve
Bank;
3. Any person may take
out of India ,
a. foreign exchange
possessed by him is in compliance with the Foreign Exchange Management
(Possession and Retention of Foreign Currency) Regulations, 2000 ;
b. any unspent foreign
exchange brought back by a person into India while returning from travel abroad
and is retained by him, in compliance with Foreign Exchange Management
(Possession and Retention of Foreign Currency) Regulations, 2000 ;
4. any person resident
outside India may take out of India unspent foreign exchange not exceeding the
amount brought in by him and declared in Currency Declaration Form (CDF).
D. Export and Import of currency to or from Nepal and
Bhutan
-
A
person may take or send currency notes of Government of India and Reserve Bank
of India notes (other than notes of denominations of above Rs.100 in either
case) out of India to Nepal or Bhutan
-
An
individual travelling from India to Nepal or Bhutan can carry Reserve Bank of
India currency notes of denomination Rs.500/- and/or Rs.1000/- up to a limit of
Rs.25,000/- ;
|
Currency
of Nepal or Bhutan
|
Indian
Currency
|
|
The currency of
Nepal or Bhutan can be taken or brought by a person out of India to Nepal or
Bhutan or into India from Nepal or Bhutan
|
currency notes of Government of India and
Reserve Bank of India notes (other than notes of denominations of above
Rs.100 in either case) can be brought into India from Nepal or Bhutan
|
E. Prohibition on Export of Indian Coins
No person shall take or send out of India
the Indian coins which are covered by the Antique and Art Treasure Act, 1972.
(2.)Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident outside
India) (Amendment) Regulations, 2016
FEMA Notification:
Notification No.FEMA.361/2016-RB
Dated February 15, 2016
Applicability:
To a Non Resident of India
Crux
of the notification:
-
Through
this notification the RBI makes the following amendments to the Foreign
Exchange Management (Transfer or issue of Security by a Person Resident outside
India) Regulations, 2000
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Reference to Rule
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Existing
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Replaced with
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|||||||||
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2 (vii) (a)
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Non-resident Indian (NRI) shall have the meaning
assigned to it in clause (iv) of Regulation 2 of the Foreign Exchange
Management (Investment in Firm or Proprietary Concern in India) Regulations,
2000.
|
Non-Resident
Indian (NRI) means an individual resident outside India who is citizen of
India or is an ‘Overseas Citizen of India’ cardholder within the meaning of
section 7 (A) of the Citizenship Act, 1955.”
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|||||||||
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5 (3)
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(i)
A Non- Resident Indian (NRI) may acquire securities or units on a Stock
Exchange in India on repatriation basis under the Portfolio Investment
Scheme, subject to the terms and conditions specified in Schedule 3.
(ii)
A Non- Resident Indian (NRI) may acquire securities or units on a
non-repatriation basis, subject to the terms and conditions specified in
Schedule 4.
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Also,
Schedules 3 and 4 have been replaced completely.
-
The
other rules and schedules remain the same.
(3.)Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident outside India)
(Second Amendment) Regulations, 2016
FEMA Notification:
Notification
No.FEMA.362/2016-RB Dated February 15, 2016
Applicability:
To
a Non Resident of India
Crux of the
notification:
-
Insertion
of additional definition/ meanings like, manufacture, ownership and control,
largest Indian shareholder, Indian company and so on.
-
Requirement
of government approval while making a foreign investment in certain sectors/
activities
-
The
notification provides foreign investments caps and entry route in various
sectors
-
A
person resident outside India shall invest in an Investment vehicle subject to
certain conditions laid down in this schedule.
-
The
Investment Vehicle receiving foreign investment shall be required to make such
report and in such format to the RBI or to SEBI as may be prescribed by them
from time to time.
(4.) Undertaking
of Point of Presence (PoP) Services under Pension Fund Regulatory and
Development Authority for National Pension System (NPS)
RBI Circular:
Circular
No: RBI/2015-16/324, DNBR (PD) CC.No. 073/03.10.001/2015-16 dated February 18,
2016
Applicability:
All Non-Banking Financial Companies
Crux of the
Circular:
-
The
bank on carefully examining the proposals, received from Non – Banking
Financial Companies seeking approval for undertaking of Point of Presence (PoP)
Services under Pension Fund Regulatory and Development Authority for National
Pension System, has decided in the public interest to restrict the NBFC from
undertakingPoP services for National Pension System.
Who and
what is the role of Points of Presence (PoP):
-
PoPs are
the first points of interaction of the NPS subscriber with the NPS
architecture.
-
The
authorized branches of a POP, called Point of Presence Service Providers
(POP-SPs), will act as collection points and extend a number of customer services
to NPS subscribers including requests for withdrawal from NPS.
4.
(5.)
NBFC – Factors
(Reserve Bank) Directions, 2012 – Review
RBI Circular:
Circular
No: RBI/2015-16/326,
DNBR.CC.PD.No.074/03.10.01/2015-16 dated February 18, 2016
Applicability:
All Non-Banking Financial Companies
(NBFCs) – Factors.
Crux of the Circular:
-
The RBI on reviewing the guidelines and provisions
on factoring services by banks has brought in the following instructions/
clarifications for ensuring meticulous complianceagainst regulatory gaps/ arbitrage if any, arising from
differential regulations as between NBFC-Factors and banks.
-
Prudential
Norms – Identification as Non – Performing Assets (NPA)
o Any
receivables acquired by an NBFC – Factor is due for payment but has not been
paid as per the applicable norms then such receivables to be treated as NPA
irrespective of the receivables being acquired by the NBFC – Factor or not, or
whether the factoring was carried out on “with recourse” basis or “non
–recourse” basis.
-
Exposure Norms – Single and Group Borrower Limits
o Inorder
to ensure compliance of credit norms the exposure shall be reckoned as follows:
|
Factoring on with recourse basis
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Factoring on without recourse basis
|
|
Exposure would be reckoned on the assignor
|
Exposure would be reckoned on the debtor,
irrespective of credit risk cover/ protection provided.
Exemptions:
Except,
in case of international factoring where the entire credit risk is assumed by
the import factor
|
-
Risk
Management
o Before
initiating/ undertaking such business proper and adequate controls and
reporting mechanisms should be put in place:
§
NBFC – Factors:
·
Shall prior to entering into any factoring
arrangement or prior to establishing lines of credit with the export factor to
carry on thorough credit appraisal of the debtors
·
to
extend factoring services in respect of invoices which deal with / represent
genuine trade transactions
·
to
underwrite the credit risk on the debtor then there should be a clearly laid down board approved limit
for all such underwriting commitments.
-
Exchange
of Information
o Under
this, the assignor shall be considered as the borrower.
o The
factors and banks to share the information about the common borrowers.
o While
sanctioning limits to the common borrower, the factors to intimate the banks
accordingly to avoid double financing.
(6.)
Frauds - Future
approach towards monitoring of frauds in NBFCs
RBI Circular:
Circular
No: RBI/2015-16/327,
DNBR (PD) CC.No.075/03.10.001/2015-16 dated February 18, 2016
Applicability:
All Deposit taking Non-Banking
Financial Companies (NBFCs) (including RNBCs) and NBFCs – ND – SI
Crux of the Circular:
-
With reference to the earlier circulars issued by
the RBI on “Frauds -
Future approach towards monitoring of frauds in NBFCs” on August 14, 2008, March 2, 2012 and on
December 13, 2012
o the RBI has revised the threshold
for reporting of frauds and submission of quarterly progress reports on frauds
to the Central Fraud Monitoring Cell, Reserve Bank of India, Department of Banking
Supervision
o the threshold has been revised from
Rs. 25 lakhs to Rs 1 crore with immediate effect.
o However, the NBFCs shall report
frauds and submit quarterly progress reports on fraud below the threshold
limit, to the Regional Office of Reserve Bank of India, Department of
Non-Banking Supervision under whose jurisdiction the Registered Office of the
NBFC falls.
-
All
other instructions contained in the above mentioned circulars continue to
remain in effect
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