|
RBI/2006-07/181
A.P. (DIR Series) Circular No. 13
November 17,
2006
To
All Category
- I Authorised Dealer Banks
Madam/Sir,
Issue of
Bank Guarantee on behalf of service importers
Attention
of Authorised Dealer Category-I (AD Category-I) banks is invited to Regulation
4 of the Foreign Exchange Management (Guarantees) Regulations, 2000 notified
vide Notification No. FEMA 8/2000-RB dated May 3, 2000 and as amended from time
to time, in terms of which, AD Category-I banks are allowed to give guarantees
for specified purposes as stated therein.
2. With
a view to further liberalise the procedure for import of services, AD Category-I
banks are now permitted to issue guarantee on behalf of their customers importing
services, provided:
a. the guarantee
amount does not exceed USD 100,000,
b. the AD Category-I
bank is satisfied about the bonafides of the transaction.
c. the AD Category-I bank
ensures submission of documentary evidence for import of services in the normal
course, and
d. the guarantee
is to secure a direct contractual liability arising out of a contract between
a resident and a non-resident.
3. In
case of invocation of the guarantee, the AD Category-I bank is required to submit
to the Chief General Manager-in-Charge, Foreign Exchange Department, Foreign
Investments Division (EPD), Reserve Bank of India, Central Office, Mumbai-400001
a report on the circumstances leading to the invocation of the guarantee.
4. Necessary
amendments to the Foreign Exchange Management (Guarantees) Regulations,2000
are being issued separately.
5. AD
- Category I banks may bring the contents of this circular to the notice of
their constituents and customers concerned.
6. The
directions contained in this Circular have been issued under Section 10 (4)
and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is
without prejudice to permissions / approvals, if any, required under any other
law.
Yours faithfully,
(Salim
Gangadharan)
Chief General Manager-in-Charge
|