Foreign Exchange Developments
June 2010
i) Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR
In terms of A.P. (DIR Series) Circular
No.48 dated April 26, 2010 the Rupee value
of the special currency basket was indicated
as Rs.60.8974 effective from April 09, 2010.
A further revision has taken place on
May 26, 2010 and accordingly, the Rupee
value of the special currency basket has
been fixed at Rs.63.0402 with effect from
May 31, 2010.
[A.P. (DIR Series) Circular No.55 dated June 15, 2010]
ii) Foreign Exchange
Management Act, 1999
(FEMA) Foreign Exchange
(Compounding Proceedings)
Rules, 2000 (the Rules) -
Compounding of
Contraventions under
FEMA, 1999
The provisions of section 15 of FEMA,
1999 permit compounding of
contraventions and, as such it empowers
the Reserve Bank to compound any
contravention as defined under section 13
of the FEMA, except the contraventions
under section 3 (a) of FEMA, on an
application made by the person committing
such contravention.
The compounding of the
contravention under the FEMA, 1999 was
implemented by the Reserve Bank by putting in place the simplified procedures
for compounding with effect from
February 1, 2005 with a view to providing
comfort to the citizens and corporate
community by minimising transaction
costs, while taking a serious view of the
wilful, malafide and fraudulent transactions.
It was decided to put in place an updated
procedure for compounding of contravention/
s under FEMA on the basis of observations
made over the last few years on the
compounding process on a continuous
basis and the experience gained in dealing
with compounding applications. The
objective was rationalisation and streamlining
of the process and the procedure for
compounding and to enhance transparency
and effect smooth implementation of the
compounding process. The directions
contained in the compounding of
contravention/s issued vide A.P. (DIR
Series) Circular No.31 dated February 1,
2005 are superseded by this circular.
[A.P. (DIR Series) Circular No.56 dated June 28, 2010]
iii) Export of Goods and Software
– Realisation and Repatriation
of export proceeds –
Liberalisation
In terms of A.P.(DIR Series) Circular No.70
dated June 30, 2009 the period of realisation
and repatriation to India of the amount
representing the full export value of goods or
software exported was increased from six
months to twelve months from the date of
export, subject to review after one year.
The issue was reviewed and it was decided, in consultation with the Government of India, to extend the above relaxation up to March 31, 2011.
The provisions in regard to period of
realisation and repatriation to India of the
full export value of goods or software
exported by a unit situated in a Special
Economic Zone (SEZ) as well as exports
made to warehouses established outside
India remains unchanged.
[A.P. (DIR Series) Circular No.57 dated June 29, 2010]
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