Current Account Transactions

Foreign Exchange Management
(Current Account Transactions)
Rules, 2000


G.S.R. No. 381(E). -1n 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 (42 of 1999), and in consultation with the Reserve Bank, the Central Government having considered it necessary in the public interest, makes the following rules, namely :-

Short title and commencement.

1.

(1) These rules may be called the Foreign Exchange Management (Current Account Transactions) Rules, 2000.

(2) They shall come into force from the date of their publication in the Official Gazette.

Definitions.

2.

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 of A TM 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.

Prohibition on drawal of foreign exchange.

3.

Drawal of foreign exchange by any person for the following purpose is prohibited, namely :-


  1. a transaction specified in the Schedule I; or -

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

  3. a transaction with a person resident in Nepal of Bhutan :

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

Prior approval of Government of India.

4.

No person shall draw foreign exchange for a transaction included in the Schedule n 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) Account of the remitter.

(In above rule (4), following bold words has been deleted vide Ntf. No. S.O. 301(E), dated 30/03/2001)

Prior approval of Reserve Bank.

5.

No person shall draw foreign exchange for a transaction included in the Schedule ill 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) Account of the remitter.

(In above rule (5), following bold words has been deleted vide Ntf. No. S.O. 301(E), dated 30/03/2001)

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 Schedule III as the case may be.

(Above rule (6) has been inserted vide Ntf. No. S.O. 301(E), dated 30/03/2001)

1omit[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.]

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/ prescribed magazines, football pools, sweepstakes, etc.

4.

Payments 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 of exports under Rupee State Credit Route, except commission up to 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 Scheme Account.


SCHEDULE II
(See rule 4)


 

Purpose of Remittance

Ministry/Department of Government of India whose approval is required

1.

Cultural Tours

Ministry of Human Resource Development (Department of Education and Culture)

2.

Advertisement in foreign print media for the purposes other than promotion of tourism, foreign investments and international bidding (exceeding US$ 10,000) by a State Government and its Public Sector Undertakings.

Ministry of Finance, Department of Economic Affairs.


(Above item no. (2) & entries relating thereto has been substitued vide Ntf. No. S.O. 301(E), dated 30/03/2001)

3.

Remittance of Freight of vessel chartered by a PSU

Ministry of Surface Transport (Chartering Wing)

4.

Payment of import through ocean transport by a Government Department or a PSU on c.i.f. basis (i.e., other than f.o.b. and f.a.s. basis)

Ministry of Surface Transport (Chartering Wing)

5.

Multi-modal transport operators making remittance to their agents abroad

Registration Certificate from the Director General of Shipping

6.

Remittance of hiring charges of transponders by

(a) TV Channels

(b) Internet service providers

 

Ministry of Information and Broadcasting

Ministry of Communication and Information Technology

7.

Remittance of container detention charges exceeding the rate prescribed by Director General of Shipping

Ministry of Surface Transport (Director General of Shipping)

8.

Remittances under technical collaboration agreements where payment of royalty exceeds 5 per cent on local sales and 8 per cent on exports and lump-sum payment exceeds US$ 2 million

Ministry of Industry and Commerce

9.

Remittance of prize money/sponsorship of sports activity abroad by a person other than International/National/State Level sports bodies, if the amount involved exceeds US$ 1,00,000

Ministry of Human Resource Development, (Department of Youth Affairs and Sports)

10.

Omitted

  

11.

Remittance for membership of P&I Club

Ministry of Finance (Insurance Division)



SCHEDULE III
(See rule 5)


1.

Omitted

2.

Release of exchange exceeding US $ 10000 or its equivalent in one calendar year, for one or more private visits to any country (except Nepal and Bhutan).

 

(As a measure of further liberalization, the above limit has been enhanced to US$ 10,000 or its equivalent. Applications, for release of foreign exchange exceeding the above limit, may be submitted to the concerned Regional Office of the Reserve Bank, through the Authorised Persons.
 

3.

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

4.

Donation exceeding US$ 5,000 per remitter/donor per annum.

(Above item nos. (3) & (4) has been substituted vide Ntf. No. S.O. 301(E), dated 30/03/2001)

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 or emigration.

7.

Remittance for maintenance of close relatives abroad,

     

    (i) 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 –
     

      (a) is a citizen of a foreign State other Pakistan; or

      (b) 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
       

 (ii) Exceeding US$ 5,000 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".

(Above item no. (7) has been substituted vide Ntf. No. S.O. 301(E), dated 30/03/2001)

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.

(Pl. refer AP (DIR Series) Cir. No. 17/2002-03-RB, Dt. 12/09/2002 for Liberalisation of Release of Foreign Exchange for Medical Treatment Abroad related to above item No. 9.)

10.

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

 

11.

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

12.

Omitted

13.

Omitted

14.

Omitted

15.

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

 

16.

Remittance for purchase of trademark or franchise in India.

17.

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

 

18.

Omitted.

 

(Above item no. (17) has been inserted vide Ntf. No. S.O. 301(E), dated 30/03/2001)


1 Omitted vide Notification No.G.S.R. 369(E) dt. 16.05.2023