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FEMA Current Account Rules Amended: Schedule Labels Updated

Current & verified — this is the latest version
Source: Reserve Bank of India · RBI/2006-2007/314 · issued FY 2006-07 · ~1 min read
Quick answerRBI notifies amendments to FEMA Current Account Transaction Rules, effective July 28, 2005, updating Schedule I and II headings for clarity. No new restrictions or approvals introduced.
The rule, in the simplest words
How it plays out — a real example

A forex & trade-finance officer in Indore is reviewing a customer's request to send money abroad for a business trip. She checks the updated FEMA rule book and sees Schedule I now clearly says 'Transactions which are Prohibited' – she knows the customer's request is not on that list, so she processes it without any extra approvals, just as before.

What changed

The Government of India amended the Foreign Exchange Management (Current Account Transactions) Rules, 2000 via Notification G.S.R. 512(E) dated July 28, 2005. Schedule I heading was changed from '(see Rule 3)' to 'Transactions which are Prohibited (see rule 3)'. Schedule II heading was changed from '(see Rule 4)' to 'Transactions which require prior approval of the Central Government (see Rule 4)'.

What it means for you

This is a purely cosmetic amendment to improve clarity of the rule text. It does not alter any prohibited transactions or prior approval requirements. Banks and customers face no change in compliance obligations.

What you must do

Who it affects

All Authorised Dealer Category-I banks, Compliance and legal teams handling FEMA matters

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this amendment add any new prohibited transactions?

No. It only renames Schedule I and II headings for clarity. The list of prohibited transactions and those requiring prior approval remains unchanged.

When did this amendment take effect?

It came into force on July 28, 2005, the date of publication in the Official Gazette.

📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/314 A. P. (DIR Series) Circular No. 38 Apri 05, 2007 To, All Authorised Dealer Banks Madam / Sir, Foreign Exchange Management Act (FEMA), 1999 Current Account Transaction Rules – Amendment Attention of Authorised Dealer (AD) banks is invited to Foreign Exchange Management (Current Account Transactions) Rules, 2000 notified vide Notification No. G.S.R. 381(E) dated 3rd May 2000, as amended from time to time (the Rules). 2. Government of India has made certain amendments to the Rules vide Notification G.S.R. 512(E) dated July 28, 2005, a copy of which is annexed . 3. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 4. 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 Annex [A. P. (DIR Series) Circular No. dated April , 2007] GAZETTE OF INDIA EXTRAORDINARY PART II -- Section 3 -- Sub-section (i) PUBLISHED BY AUTHORITY ============================================================= NEW DELHI, THURSDAY, JULY 28, 2005 ============================================================= MINISTRY OF FINANCE (Department of Economic Affairs) NOTIFICATION New Delhi, the 27 th July 2005 G.S.R.512(E).-- In exercise of the powers conferred by Sub-section (1) and clause (a) of Sub-section (2) of Sub-Section (2) of Section 46 read with Section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government, hereby makes the following amendments in the Foreign Exchange Management (Current Account Transactions) Rules, 2000, namely :-- 1. (1) These rules may be called the Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2005. (2) They shall come into force from the date of their publication in the Official Gazette. 2. In the Foreign Exchange Management (Current Account Transactions) Rules, 2000, (a) in Schedule I, brackets, words and figures '(see Rule 3)' the following words, brackets and figure shall be substituted, namely :-- 'Transactions which are Prohibited (see rule 3)', (b) in Schedule II, for the brackets, words and figure '(see Rule 4)', the following words, brackets and figure shall be substituted, namely:-- 'Transactions which require prior approval of the Central Government (see Rule 4)'. [No.F.1/2/FM/01] ( U.K. SIHNA ) Joint Secretary Note : The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3(i) vide Number G.S.R.381(E), dated the 3 rd May, 2000 and subsequently amended last vide G.S.R.608(E) dated 13 th September, 2004.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/314 · issued FY 2006-07. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Authorised Dealer Category-I banks, Compliance and legal teams handling FEMA matters), your first concrete step on “FEMA Current Account Rules Amended: Schedule Labels Updated” is: “Update internal reference copies of FEMA Current Account Transaction Rules with the new Schedule headings.” (RBI issued this FY 2006-07).

  1. Circular: RBI/2006-2007/314 -- FEMA Current Account Rules Amended: Schedule Labels Updated
  2. Issued: FY 2006-07
  3. Action required: Update internal reference copies of FEMA Current Account Transaction Rules with the new Schedule headings.
  4. Action required: Inform AD Category-I bank staff about the amendment for accurate customer guidance.
  5. Action required: No change in transaction processing or approval procedures required.
  6. Owner: ____________ Target date: ____________
  7. Board/committee approval needed? Y / N
  8. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3396&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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