To,
All
Category - I Authorised Dealer Banks
Madam
/ Sir,
Opening
of foreign currency accounts in Indiaby
ship-manning / crew-management agencies
Attention
of Authorised Dealer Category-I (AD Category - I) banks is invited to Regulation
6 of Foreign Exchange Management (Foreign Currency Accounts by a person resident
in India) Regulations, 2000 notified vide Notification No. FEMA 10/2000-RB dated
May 3, 2000, as amended from time to time, in terms of which general permission
is available to a shipping or airline company, incorporated outside India or its
agent in India to open, hold and maintain a foreign currency account with an AD
Category – I bank in India for meeting the local expenses in India of such shipping
or airline company.
2.
As announced in the Annual
Policy Statement for the year 2007-08 (para 146 (i) vi)), it has now been
decided to allow ship manning / crew managing agencies that are rendering services
to shipping companies incorporated outside India, to open foreign currency accounts
in India. Accordingly, AD Category – I banks may allow ship-manning / crew managing
agencies in India to open and maintain non-interest bearing foreign currency accounts
in India for the purpose of undertaking transactions in the ordinary course of
its business, as detailed below :
a)
Credits to such accounts would be only by way of inward remittances through normal
banking channels from the overseas principal.
b)
Debits will be towards various expenses in connection with the management of the
ships / crew in the ordinary course of its business.
c)
No credit facility (fund based or non-fund based) should be granted against security
of funds held in the account.
d)
The bank should meet the prescribed Reserve Requirements in respect of such accounts.
e)
No EEFC facility should be allowed in respect of the remittances received in the
account.
f) The account will
be maintained only during the validity period of the agreement.
3.
Necessary amendments to Notification No. FEMA 10/2000-RB dated May 3, 2000 [Foreign
Exchange Management (Foreign Currency Accounts by a person resident in India)
Regulations, 2000] are being issued separately.
4.
AD Category - I banks may bring the contents of this circular to the notice of
their constituents and customers concerned.
5.
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