In exercise of the powers conferred by Section 3 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank hereby directs that the prohibitions imposed by clauses (b), (c) and (d) of that section shall not apply to any transaction entered into in Indian rupees by or with

i)

a person who is a citizen of India, Nepal or Bhutan resident in Nepal or Bhutan;

ii)

a branch situated in Nepal or Bhutan of any business carried on by a company or a corporation incorporated under any law in force in India, Nepal or Bhutan;

iii)

a branch situated in Nepal or Bhutan of any business carried on as a partnership firm or otherwise, by a citizen of India, Nepal or Bhutan.

(P.R. GOPALA RAO)

Executive Director