Notifications

Updated as on April 20, 2004

Reserve Bank of India
Exchange Control Department
Central Office
Mumbai - 400 001

Master Circular .No.5

To

All Authorised Dealers in Foreign Exchange

Madam/Dear Sir,

Master Circular – Miscellaneous Remittances from India

As your are aware, the Foreign Exchange Management Act, 1999 has been introduced with effect from June 1, 2000. In terms of section 5 of the Act, any person may sell or draw foreign exchange to and from an authorised person for a current account transaction. However, Central Government has been empowered to impose certain restrictions for current account transaction in public interest and in consultation with Reserve Bank. Accordingly, Government of India issued Notification No.GSR 381(E) dated May 3, 2000 as amended vide its Notification No.S.O.301(E) dated March 30, 2001 covering the remittance facilities for residents.

2. Reserve Bank of India has also, in the recent past, announced a series of additional remittance facilities to NRIs/PIO for various purposes in the context of on going liberalisations under FEMA 1999.

3. In order to enable the Authorised Dealers (ADs) and Full-Fledged Money Changers (FFMCs) to have all the existing instructions on the subject of 'Miscellaneous Remittances from India' as on July1, 2003, at one place, a Master Circular has been prepared covering facilities for residents under Part A and for NRI/PIO and other non residents at Part B.

4. This Master Circular consolidates the directions contained in the undernoted circulars, as on July 1, 2003:

Circulars covered under Part. A

Circulars covered under Part. B

1. AP (DIR Series) Circular No.45…. May 14, 2002


2. AP (DIR Series) Circular No.1 ….July 2, 2002


3. AP (DIR Series) Circular No.5 . July 15, 2002


4. AP (DIR Series) Circular No.19… September 12, 2002


5. AP (DIR Series) Circular No.35 November 01, 2002


6. AP (DIR Series) Circular No.40 …November 5, 2002


7. AP (DIR Series) Circular No.46 …November 12, 2002


8. AP (DIR Series) Circular No.56 … November 26, 2002


9. AP (DIR Series) Circular No.59 … December 9, 2002


10. AP (DIR Series) Circular No.67 …January 13, 2003


11. AP (DIR Series) Circular No.101 May 5, 2003


12. AP (DIR Series) Circular No.104 May 31, 2003

Yours faithfully,

Grace Koshie
Chief General Manager

Note: Reserve Bank of India has, in a Press Release dated May 2, 2003, clarified that foreign nationals, including Persons of Indian Origin, while in India, are free to pay charges towards booking airline/train tickets, hotels, hospitals etc., either in Indian Rupees or in equivalent foreign exchange.

Updated as on April 20, 2004

Part. A

Section I

NOTIFICATION

New Delhi, the 3^rd May, 2000

(as amended by Notification S.O.301(E) dated March 30,2001)

G.S.R.381(E)---In exercise of the powers conferred by Section 5 and sub-section (1) and clause (a) of sub-section (2) of Section 46 of the Foreign Exchange Management Act, 1999, and in consultation with the Reserve Bank, the Central Government having considered it necessary in the public interest, makes the following rules, namely :--

1. Short title and commencement.---(1) These rules may be called the Foreign Exchange Management (Current Account Transactions) Rules, 2000; (2) They shall come into effect on the 1^st day of June 2000.

2. Definitions.---In these rules, unless the context otherwise requires :

1. 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999);
2. 'Drawal' means drawal of foreign exchange from an authorised person and includes opening of Letter of Credit or use of International Credit Card or International Debit Card or ATM Card or any other thing by whatever name called which has the effect of creating foreign exchange liability;
3. 'Schedule' means a schedule appended to these rules;
4. The words and expressions not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act.

3. Prohibition on drawal of Foreign Exchange.--- Drawal of foreign exchange by any person for the following purpose is prohibited, namely:

a. a transaction specified in the Schedule I; or

b. a travel to Nepal and/or Bhutan; or

c. a transaction with a person resident in Nepal or Bhutan.

Provided that the prohibition in clause (c) may be exempted by RBI subject to such terms and conditions as it may consider necessary to stipulate by special or general order.

4. Prior approval of Govt. of India.---No person shall draw foreign exchange for a transaction included in the Schedule II without prior approval of the Government of India,

Provided that this Rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) and Resident Foreign Currency (Domestic) Account of the remitter.

5. Prior approval of Reserve Bank. - No person shall draw foreign exchange for a transaction included in the Schedule III without prior approval of the Reserve Bank;

Provided that this Rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) and Resident Foreign Currency (Domestic) 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.

However, the restrictions on the use of the card for prohibited items will continue.

Updated as on April 20,2004

Schedule I

(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 investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of Indian companies.
5. Remittance of dividend by any company to which the requirement of dividend balancing is applicable.
6. Payment of commission on exports under Rupee State Credit Route, except commission upto 10% of invoice value of exports of tea and tobacco.
7. Payment related to 'Call Back Services' of telephones.
8. Remittance of interest income on funds held in Non-Resident Special Rupee (Account) Scheme.

Schedule II

(See Rule 4)

# Please refer to A.P.(DIR Series) Circular No.76 dated Feb.24,2004. The related Notification will be issued separately.

Schedule III
(See Rule 5)

1. Deleted ##

2. Release of exchange exceeding US$ 10,000 or its equivalent in one calendar year, for one or more private visits to any country (except Nepal and Bhutan).

3. Gift remittance exceeding US$ 5,000 per remitter/donor per annum.

4. Donation exceeding US$ 5000 per remitter/donor per annum.

5. Exchange facilities exceeding US$ 100,000 for persons going abroad for employment.

6. Exchange facilities for emigration exceeding US$ 100,000 or amount prescribed by country of emigration.

7. Remittance for maintenance of close relatives abroad,

1. exceeding net salary (after deduction of taxes, contribution to provident fund and other deductions) of a person who is resident but not permanently resident in India and –

1. is a citizen of a foreign State other than Pakistan; or
2. is a citizen of India, who is on deputation to the office or branch or subsidiary or joint venture in India of such foreign company.

1. exceeding US$ 100,000 per year, per recipient, in all other cases.

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 assignment; the duration of which does not exceed three years, is a resident but not permanently resident.

8. Release of foreign exchange, exceeding US$ 25,000 to a person, irrespective of period of stay, for business travel, or attending a conference or specialised training or for maintenance expenses of a patient going abroad for medical treatment or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/check-up.

9. Release of exchange for meeting expenses for medical treatment abroad exceeding the estimate from the doctor in India or hospital/doctor abroad.

10. Release of exchange for studies abroad exceeding the estimate from the institution abroad or US$ 100,000, per academic year, whichever is higher.

11. Commission to agents abroad for sale of residential flats/ commercial plots in India, exceeding USD 25,000 or 5% of the inward remittance per transaction, whichever is higher. ##

12. Deleted ##

13. Deleted ##

14. Deleted ##

15. Remittance exceeding US$ 1,000,000 per project, for any consultancy service procured from outside India.

16. Remittances for purchase of trade mark/franchise in India. ##

17. Remittance exceeding US $ 100,000 by an entity in India by way of reimbursement of pre-incorporation expenses.

18. Deleted ##

## Please refer to A.P.(DIR Series) Circular No.76 dated Feb.24,2004. The related Notification will be issued separately.

Section II

Release of Foreign Exchange by Authorised Dealers A.1 General

1.1 For release of foreign exchange to persons resident in India for travel abroad, authorised dealers should be guided by the Rules made by the Govt. of India under Section 5 of Foreign Exchange Management Act, 1999. In terms of item (b) of Rule 3 of the Govt. Notification No. GSR. 381 (E) dated 3^rd May 2000, no release of foreign exchange is admissible for travel to Nepal and Bhutan. For release of foreign exchange exceeding certain limits, as specified in Schedule III to the Notification, prior approval of Reserve Bank should be obtained. All applications for release of exchange exceeding the limits prescribed in Schedule III to the Govt. Notification should be referred to the Regional Office of the Exchange Control Department, under whose jurisdiction the applicant is functioning/ residing.

1.2 Applications for release exchange for advertisement in overseas TV channels should, however, be forwarded to the Central Office of the Exchange Control Department, with a certificate by the authorised dealer on the export earnings of the applicant for the preceding two years, as also a certificate from a Chartered Accountant certifying that the advertisement for which foreign exchange is being sought, will be telecast by the foreign TV company in foreign countries and not in India alone.

1.3 In terms of clause (b) of Rule (2) of the Government Notification No. GSR. 381(E) dated 3^rd May, 2000, 'Drawal' includes use of International Credit Cards, International Debit Cards, ATM cards, etc. It is, therefore, clarified that use of these instruments is also subject to the restrictions imposed under the Notification. Further, in terms of clause (h) of Section 2 of Foreign Exchange Management Act, 1999, 'currency', inter-alia, includes International Credit Cards. The Reserve Bank has also, vide its Notification No FEMA 15/2000-RB dated 3^rd May 2000, notified ATM Cards and Debit Cards as 'Currency'. Accordingly, payments made by Credit Cards, ATM Cards and Debit Cards, etc., being only different methods of payment, all Rules, Regulations made and Directions issued under the Act apply to Credit Cards, ATM Cards, Debit Cards, etc., also.

1.4 Resident individuals maintaining a foreign currency account with an authorised dealer in India or a bank abroad, as permissible under extant Foreign Exchange Regulations, are free to obtain International Credit Cards issued by overseas banks and other reputed agencies. Authorised dealers may allow remittances by their constituents maintaining foreign currency accounts with them to meet the charges incurred against the ICCs issued by the foreign banks and other reputed agencies. The remittance should, however, be made to the Card issuing bank/agency and not to a third party.

A.2 Sale of Exchange

2.1 Where approvals have been issued by the Reserve Bank/ Government of India, foreign exchange may be sold within the period of validity stated in the approval and the sale be endorsed on the reverse of the original approval.

2.2 On the basis of a declaration given by the traveller regarding the amount of foreign exchange availed of during a calendar year, authorised dealers may release exchange for tourism and private purposes.

2.3 Authorised dealers need not endorse on the traveller’s passport the foreign exchange sold for travel abroad. However, if requested by the traveller, they may record under their stamp, date and signature, details of the foreign exchange sold for travel.

2.4 In case of issue of travellers cheques, the traveller should sign the cheques in the presence of an authorized official and the purchaser’s acknowledgement for receipt of the travellers cheques should be maintained.

2.5 Out of the overall foreign exchange being sold to a traveller, exchange in the form of foreign currency notes and coins may be sold up to the limit indicated below:

2.6 The forms A2 relating to sale of foreign exchange for travel abroad, should be retained for a period of one year by the authorised persons, together with the related documents, for the purpose of verification by their Internal Auditors. A.3. Medical Treatment

3.1 A person who has fallen sick after proceeding abroad may also be released foreign exchange by an authorized dealer for medical treatment outside India in accordance with Rule 5 of Government Notification No GSR 381(E) dated 3^rd May 2000.

3.2 With a view to enable residents to avail of foreign exchange for medical treatment abroad without any hassles and any loss of time, authorised dealers may release foreign exchange upto an amount of US $ 50,000 or its equivalent, on the basis of a self certification, without insisting on any estimate from a hospital/doctor.

3.3 For amount exceeding the above limit, estimate from the doctor in India or hospital/doctor abroad, is required to be submitted to the authorised dealers (as provided in the Gazette Notification).

A.4 Small Value Remittances

With a view to provide hassle free release of foreign exchange to resident individuals for various purposes, authorized dealers may release foreign exchange not exceeding US$ 500 or its equivalent, for all permissible transactions on the basis of a simple letter from the applicant containing the basic information viz., name and address of the applicant/beneficiary, amount to be remitted and the purpose of remittance, without insisting on submission of Form A 2.

A.5 Cultural Tours

Dance troupes, artistes, etc., who wish to undertake tours abroad for cultural purposes should apply to the Ministry of Human Resources Development (Department of Education and Culture), Government of India, for recommendation regarding their foreign exchange requirements. Authorised dealers may release foreign exchange, on the strength of the sanction from the Ministry, to the extent and subject to conditions indicated therein.

A.6 Private visits

Foreign exchange for private visit can also be released to a person who is availing of foreign exchange for travel outside India for any purpose.

A.7 Period of surrender of foreign exchange

In case the foreign exchange purchased for any purpose is not used for the purpose or for any other purpose for which purchase or acquisition of foreign exchange is permitted under the provisions of FEMA, 1999 or Rules or Regulations made thereunder and the evidence submitted to the satisfaction to the authorised dealer, the same or the unused portion thereof is required to be surrendered to an authorised person within a period of 60 (sixty) days from the date of its purchase (cf. Notification No. FEMA 9/2000-RB Dated 3^rd. May 2000).

Note: In cases where a person approaches an authorised person for surrendering foreign exchange after 60 days, the authorised person should not refuse to purchase the foreign exchange on the ground that the prescribed period of 60 days has expired.

A.8 Unspent Foreign Exchange

8.1 Unspent foreign exchange brought back to India by a traveller should be surrendered to an authorised person within 90 days from the date of return of the traveler, if the unspent foreign exchange is in the form of currency notes. If such foreign exchange is in the form of travellers cheques, the same should be surrendered to an authorised person within 180 days from the date of return. Exchange so brought back can be utilised by the traveller for his subsequent visit abroad during the period specified above.

8.2 However, a returning traveller is also permitted to retain with him, foreign currency travellers cheques and currency notes upto an aggregate amount of US $ 2000 and foreign coins without any ceiling (cf. Notification No. FEMA 11/2000-RB dated 3^rd May 2000). Foreign exchange so retained, can be utilised by the traveller for his subsequent visit abroad.

8.3 A person resident in India can open, hold and maintain with an authorized dealer in India, a Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, Bank notes and travellers cheques from any of the sources like, payment for services rendered abroad, as honorarium, gift, services rendered or in settlement of any lawful obligation from any person not resident in India.

The account may also be credited with/opened out of foreign exchange earned like proceeds of export of goods and/or services, royalty, honorarium, etc., and/or gifts received from close relatives (as defined in the Companies Act) and repatriated to India through normal banking channels by resident individuals.

8.4 The eligible credits to the Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, Bank notes and travellers cheques, are as under :-

1. acquired by him from an authorised person for travel abroad and represents the unspent amount thereof.

2. acquired by him, while on a visit to any place outside India, by way of payment for services not arising from any business in anything done in India.

   or

3. acquired by him, from any person not resident in India, and who is on a visit to India, as honorarium, gift, for services rendered or in settlement of any lawful obligation.

or

4. acquired by him by way of honorarium, or gift, while on a visit to any place outside India.

Note: Where a person approaches an authorised person for surrender of foreign exchange after the prescribed period, authorised person should not refuse to purchase the foreign exchange on the ground that the prescribed period has expired.

A.9 Remittances for Tour Arrangements, etc.

9.1 Authorised dealers may remit foreign exchange upto a reasonable limit, at the request of a traveller towards his hotel accommodation, tour arrangements, etc., in the countries proposed to be visited by him, provided it is out of the foreign exchange purchased by the traveller from an authorized person (including exchange drawn for private travel abroad) in accordance with the Rules, Regulations and Directions in force.

9.2 Authorised dealers may effect remittances at the request of agents in India who have tie up arrangements with hotels/agents, etc., abroad for providing hotel accommodation or making other tour arrangements for travellers from India, provided the authorised dealer is satisfied that the remittance is being made out of the foreign exchange purchased by the concerned traveller from an authorised person (including exchange drawn for private travel abroad) in accordance with the Rules, Regulations and Directions in force.

9.3 Authorised dealer may open foreign currency accounts in the name of agents in India who have tie up arrangements with hotels/agents, etc., abroad for providing hotel accommodation or making other tour arrangements for travellers from India provided:-

1. the credits to the account are by way of depositing

1. collections made in foreign exchange from travellers and
2. refunds received from outside India on account of cancellation of bookings/tour arrangements, etc., and

2. the debits in foreign exchange are for making payments towards hotel accommodation, tour arrangements, etc., outside India, in accordance with 9.2 above.

9.4 Authorised dealer may allow tour operators to remit the cost of rail/road/water transportation charges outside India without any prior approval from the Reserve Bank, net of commission/mark up, due to the agent. The sale of passes/ticket in India can be made either against the payment in Indian Rupees or in foreign exchange released for visits abroad. The cost of passes/tickets collected in Indian Rupees need not be adjusted in the travellers’ entitlement of foreign exchange for private visit.

9.5 In respect of consolidated tours arranged by travel agents in India for foreign tourists visiting India and neighbouring countries like Nepal, Bangla Desh, Sri Lanka, etc., against advance payments/ reimbursement through an authorised dealer, part of the foreign exchange received in India against such consolidated tour arrangement, may require to be remitted from India to these countries for services rendered by travel agents and hoteliers in the neighbouring countries. Authorised dealers may allow such remittances after verifying that the amount being remitted to the neighbouring countries (inclusive of remittances, if any, already made against the tour) does not exceed the amount actually remitted to India; and the country of residence of beneficiary is not Pakistan.A.10 Payment in Rupees

Authorised dealers may accept payment in cash upto Rs. 50,000 (Rupees fifty thousand only) against sale of foreign exchange for travel abroad (for private visit or for any other purpose). Wherever the sale of foreign exchange exceeds the amount equivalent to Rs.50,000, the payment must be received only by a

(i) crossed cheque drawn on the applicant’s bank account, or

(ii) crossed cheque drawn on the bank account of the firm/company sponsoring the visit of the applicant, or

(iii) Banker’s Cheque/Pay Order/ Demand Draft.

Note: Where the rupee equivalent of foreign exchange drawn exceeds Rs 50,000 either for any single drawal or more than one drawal reckoned together for a single journey/visit, it should be paid by cheque or draft, as explained above.

A.11 Advance Remittance

Authorised dealers may allow advance remittance for any current account transaction for which the release of foreign exchange is admissible. However, where the amount exceeds US $ 100,000 or its equivalent, a guarantee from a bank of International repute situated outside India or a guarantee from an authorised dealer in India, if such a guarantee is issued against the counter-guarantee of a bank of International repute situated outside India, should be obtained from the overseas beneficiary. The authorised dealer should also follow up to ensure that the beneficiary of the advance remittance has fulfilled his obligations under the contract or agreement with the remitter in India.

Section III

Release of Foreign Exchange by Full Fledged Money Changers (FFMCs)

B.1 General

Attention of the Full Fledged Money Changers (FFMCs) is invited to para 4 of A.D.(MA Series) Circular No.11 dated 16^th May 2000, wherein it has been indicated that the directions contained therein shall be applicable, mutatis-mutandis to money changers and they shall continue to be governed by the provisions of FLM/RLM, as amended from time to time. In terms of FEMA, 1999, the current regulations stand modified as under :

B.2Quantum of exchange permitted to be released for the approved purposes

2.1 Exchange not exceeding US $ 10,000 or its equivalent, per person, in one calendar year for one or more private visits to any country (except Nepal and Bhutan).

2.2 Exchange not exceeding US $ 25,000 to a person, irrespective of period of stay, for business travel or for attending conference or specialised training. B.3

Documentation

The Reserve Bank will not, henceforth, prescribe the documents which should be verified by the Money Changers while releasing foreign exchange. In this connection, attention of Money Changers is drawn to sub-section (5) of Section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999) which provides that an authorised person shall, before undertaking any transaction in foreign exchange on behalf of any person, require that person to make such a declaration and to give such information as will reasonably satisfy him that the transaction will not involve and is not designed for the purpose of any contravention or evasion of the provisions of the Act or any rule, regulation, notification, direction or order issued thereunder. Money Changers are advised to keep on record any information/documentation, on the basis of which the transaction was undertaken, for verification by the Reserve Bank/franchiser. The said clause further provides that where the said person (applicant) refuses to comply with any such requirement or makes unsatisfactory compliance therewith, the authorised person shall refuse in writing to undertake the transaction and shall, if he has reasons to believe that any contravention/evasion is contemplated by the person, report the matter to Reserve Bank.B. 4 Endorsement on Passport

It is not mandatory for authorised persons to endorse the amount of foreign exchange sold for travel abroad. However, if requested by the traveller, they may record under their stamp, date and signature, details of foreign exchange sold for travel.B.5 FLM Provisions

5.1 Consequent to issue of A.P.(DIR Series) Circular No.43/A.P.(F.L./R.L.Series) Circular No. 1 dated November 12, 2002, the Memorandum FLM and the Memorandum RLM stand superceded by the Memorandum AMC.

5.2 FFMCs and RMCs ie. Authorised Money Changers (AMCs) shall continue to be governed by all the other provisions of the Memorandum AMC.

Part. B

Remittance facilities for NRIs/PIO and foreign nationals

1.Remittance of assets

(i) NRIs/PIO/Foreign Nationals (including retired employees or non-resident widows of Indian citizens) can remit, through the Authorised Dealer, upto US $ 1.00 mn. per calendar year, out of the balances held by them in the Non-Resident Ordinary Rupee (NRO) account/ sale proceeds of assets, for all bonafide purposes, to the satisfaction of the authorised dealer, on production of an undertaking and certificate by the person making the remittance in the format as prescribed in the Central Board of Direct Taxes Circular No.10/2002 dated October 9,2002.

(ii) NRIs/PIO are allowed to remit through the AD, within the overall limit of US$ 1.00 mn. as stated at (i) above, the sale proceeds of immovable property, held by them for a period of not less than 10 years, subject to payment of applicable taxes.

(iii) NRIs/PIO are allowed to remit through the AD, within the overall limit of US$ 1.00 mn. per calendar year, as stated at (i) above, the amount representing the sale proceeds of assets in India, acquired by way of inheritance/legacy.

(iv) The above facility is not available to the citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.

2. Repatriation of sale proceeds of Property acquired by NRIs/PIO

(i) Authorised dealers may permit repatriation of sale proceeds of immovable property (other than agricultural land/farm house/plantation property) acquired in India by NRIs/PIO, in accordance with the provisions of the foreign exchange law in force at the time of acquisition or the provisions of FEM Regulations, irrespective of the period for which the property was held (lock-in period of 3 years removed). The sale proceeds, allowed to be repatriated, however, should not exceed the foreign exchange brought in, to acquire the property or the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property.

(ii) In case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

(iii) Authorised dealers may permit repatriation of amounts representing the refund of application/earnest money/purchase consideration made by the housing building agencies/seller on account of non-allotment of flat/plot/cancellation of bookings/deals for purchase of residential/ commercial property, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE/FCNR account of the account holder, or remittance from outside India through normal banking channels and the authorised dealer is satisfied about the genuineness of the transaction. Such funds may also be credited to the NRE/FCNR account of the NRIs/PIO, if they so desire.

(iv) Authorised dealers may allow repatriation of sale proceeds of residential accommodation purchased by NRIs/PIO out of funds raised by them by way of loans from the authorized dealers/housing finance institutions to the extent of such loan/s repaid by them out of foreign inward remittances received through normal banking channel or by debit to their NRE/FCNR accounts.

3. Remittance of current income

(i) NRIs/PIO have the option to credit the current income to their Non-Resident (External) Rupee account, provided the authorised dealer is satisfied that the credit represents current income of the non-resident account holder and income tax thereon has been deducted/provided for.

4. Income- tax clearance

The remittances will be allowed to be made by the authorized dealers without insisting upon a No- Objection-Certificate from the Income- tax Department, on production of an undertaking by the remitter and a Certificate from a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India in their Circular No.10/2002 dated October 9,2002.[cf. Our AP(DIR Series) Circular No.56 dated November 26,2002].

5. International Credit Cards

Authorised dealers have been permitted to issue International Credit Cards to NRIs/PIO, without prior approval of RBI. Such transactions may be settled by inward remittance or out of balances held in the cardholder’s FCNR/NRE/Non-Resident (Ordinary) Rupee accounts.