Foreign Exchange Management
(Permissible capital account transactions) Regulations, 2000
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Notification No.FEMA 1 /2000-RB
dated 3rd May 2000
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RESERVE BANK OF INDIA
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(EXCHANGE CONTROL DEPARTMENT)
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CENTRAL OFFICE
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MUMBAI 400 001
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In exercise of the powers conferred by
sub-section (2) of Section 6, sub-section (2) of Section 47 of the Foreign
Exchange Management Act 1999 (42 of 1999), the Reserve Bank of India
makes, in consultation with the Central Government, following regulations
relating to capital account transactions, namely :
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1.
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Short title and commencement :-
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(i)
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These Regulations may be called the 'Foreign
Exchange Management (Permissible Capital Account Transactions) Regulations,
2000'.
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(ii)
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They shall come into force on the 1st day
of June, 2000.
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2.
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Definitions :-
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In these Regulations, unless the context
requires otherwise, -
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(a)
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'Act' means, the Foreign Exchange Management
Act, 1999 (42 of 1999);
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(b)
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'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.
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(c)
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'Schedule' means a schedule to these Regulations;
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(d)
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'Transferable Development Rights' means
certificates issued in respect of category of land acquired for public
purpose either by Central or State Government in consideration of surrender
of land by the owner without monetary compensation, which are transferable
in part or whole;
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(e)
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The words and expressions used but not
defined in these Regulations shall have the same meanings respectively
assigned to them in the Act.
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3.
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Permissible Capital Account Transactions
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(1)
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Capital account transactions of a person
may be classified under the following heads, namely :-
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(A)
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transactions, specified in Schedule
I, of a person resident In India;
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(B)
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transactions, specified in Schedule
II, of a person resident outside India.
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(2)
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Subject to the provisions of the Act or
the rules or regulations or direction or orders made or issued thereunder,
any person may sell or draw foreign exchange to or from an authorised
person for a capital account transaction specified in the Schedules;
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Provided that the transaction is within
the limit , if any, specified in the regulations relevant to the transaction.
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4.
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Prohibition :-
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Save as otherwise provided in the Act,
rules or regulations made thereunder,
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a)
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no person shall undertake or sell or draw
foreign exchange to or from an authorised person for any capital account
transaction,
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b)
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no person resident outside India shall
make investment in India , in any form, in any company or partnership
firm or proprietary concern or any entity, whether incorporated or not,
which is engaged or proposes to engage -
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(i)
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in the business of chit fund, or
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(ii)
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as Nidhi Company , or
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(iii)
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in agricultural or plantation activities
or
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(iv)
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in real estate business, or construction
of farm houses or
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(v)
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in trading in Transferable Development
Rights (TDRs).
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Explanation:
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For the purpose of this regulation, 'real
estate business' shall not include development of townships, construction
of residential/commercial premises, roads or bridges.
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5.
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Method of payment for investment :-
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The payment for investment shall be made
by remittance from abroad through normal banking channels or by debit
to an account of the investor maintained with an authorised person in
India in accordance with the regulations made by the Reserve Bank under
the Act.
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6.
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Declaration to be furnished :-
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Every person selling or drawing foreign
exchange to or from an authorised person for a capital account transaction
shall furnish to the Reserve Bank , a declaration in the form and within
the time specified in the regulations relevant to the transaction.
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(JAGDISH CAPOOR)
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Deputy Governor
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Published in the Official Gazette of Government
of India - Extraordinary - Part-II, Section 3,
Sub-Section (i) dated 05.05.2000 - G.S.R.No.384(E)
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Schedule
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[See Regulation 3 (1) (A)]
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Classes of capital account
transactions of Persons resident in India
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a)
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Investment by a person resident in India
in foreign securities
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b)
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Foreign currency loans raised in India
and abroad by a person resident in India
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c)
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Transfer of immovable property outside
India by a person resident in India
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d)
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Guarantees issued by a person resident
in India in favour of a person resident outside India
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e)
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Export, import and holding of currency/currency
notes
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f)
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Loans and overdrafts (borrowings) by a
person resident in India from a person resident outside India
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g)
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Maintenance of foreign currency accounts
in India and outside India by a person resident in India
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h)
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Taking out of insurance policy by a person
resident in India from an insurance company outside India
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i)
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Loans and overdrafts by a person resident
in India to a person resident outside India
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j)
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Remittance outside India of capital assets
of a person resident in India
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k)
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Sale and purchase of foreign exchange derivatives
in India and abroad and commodity derivatives abroad by a person resident
in India.
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Schedule
II
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[See Regulation 3 (1) (B)]
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Classes of capital account
transactions of persons resident outside India
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a)
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Investment in India by a person resident
outside India, that is to say,
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issue of security by a body corporate or
an entity in India and investment therein
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by a person resident outside India; and
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ii)
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investment by way of contribution by a
person resident outside India to the capital
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of a firm or a proprietorship concern or
an association of persons in India.
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b)
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Acquisition and transfer of immovable property
in India by a person resident outside India.
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c)
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Guarantee by a person resident outside
India in favour of, or on behalf of, a person resident in India.
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d)
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Import and export of currency/currency
notes into/from India by a person resident outside India.
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e)
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Deposits between a person resident in India
and a person resident outside India.
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f)
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Foreign currency accounts in India of a
person resident outside India.
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g)
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Remittance outside India of capital assets
in India of a person resident outside India.
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