Bids in Foreign Currency for Domestic Projects: Prior Approval Waived
Current · Source: Reserve Bank of India · RBI/2007-2008/300 · issued 28 Apr 2008 · ~1 min read
Quick answerRBI has removed the requirement for prior approval from the Administrative Ministry or Central Government for Indian residents to bid in foreign currency for domestic projects under International Competitive Bidding. AD Category-I banks can now process such forex transactions without these clearances.
The rule, in the simplest words
Indian residents can now bid in foreign money (like dollars) for projects inside India without first asking the government for permission.
Banks (called AD Category-I banks) can handle these foreign money payments without checking for old government approvals.
This rule only applies when the bidding is 'International Competitive Bidding' (ICB) — meaning global companies are invited to compete.
Banks still must follow all other rules under FEMA (India's foreign exchange law).
How it plays out — a real example
A forex & trade-finance officer in Mumbai receives a request from a local construction company to pay a bid fee in US dollars for a highway project in India that is open to global companies. Under the old rule, the officer would have to ask for government approval letters. Now, she can process the payment right away, saving the company days of paperwork and helping them meet the bid deadline.
What changed
Earlier, Indian residents needed Central Government authorization and Administrative Ministry approval to incur forex liability or make/receive forex payments for global bids on projects executed in India. Now, for International Competitive Bidding, these prior permissions are no longer required, simplifying the process.
What it means for you
Banks can now handle forex transactions for domestic ICB projects without verifying prior government approvals, reducing processing time and paperwork. This eases compliance for lenders and corporate clients, encouraging more participation in global tenders for Indian projects. However, banks must still ensure compliance with other applicable laws under FEMA.
What you must do
Update internal guidelines to remove the requirement for prior Administrative Ministry approval for ICB-related forex transactions.
Inform your constituents and customers about this procedural simplification for bids in foreign currency.
Continue to verify that transactions comply with other FEMA provisions and any other applicable laws.
Who it affects
AD Category-I banks, Indian resident companies bidding on domestic projects under ICB, Corporate customers involved in global tenders for projects in India
❓ Common questions
Does this circular apply to all global bids or only International Competitive Bidding?
The relaxation specifically applies to International Competitive Bidding. For other global bids, the earlier requirement of Central Government authorization and Administrative Ministry approval may still apply.
Do we still need to report these transactions to RBI?
The circular does not change reporting requirements. Banks must continue to follow existing FEMA reporting norms for forex transactions.
📜 Read the original circular — full text as issued by RBI
RBI/2007-2008/300
A.P.
(DIR Series) Circular No.39
April 28, 2008
To
All Authorised Dealer Category-I banks
Madam
/ Sirs,
Bids in foreign currency for projects to be
executed in India
Attention of all Authorised Dealer
Category – I (AD Category – I) banks is invited to item No.5 of Annexure to our
A.P. (DIR Series) Circular No.54 dated November 25, 2002, relating to bids in
foreign currency for projects to be executed in India. In terms of these instructions,
person resident in India has been permitted to incur liability in foreign exchange
and to make or receive payments in foreign exchange in respect of global bids
where the Central Government has authorized such projects to be executed in India
and the approval of the concerned Administrative Ministry has been obtained. In
such cases, authorized dealers are permitted to sell foreign exchange to the resident
Indian company which has been awarded the contract.
2. On
a review, and as a measure for procedural simplification, it has been decided,
in consultation with Government of India, that the prior permission of Administrative
Ministry / Authorization from Central Government may not be necessary for International
Competitive Bidding (ICB). Accordingly, persons resident in India are now permitted
to incur liability in foreign exchange and to make or receive payments in foreign
exchange in respect of global bids for projects to be executed in India without
insisting on prior approval of the concerned Administrative Ministry for the International
Competitive Bidding.
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
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/300 · issued 28 Apr 2008. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, Indian resident companies bidding on domestic projects under ICB, Corporate customers involved in global tenders for projects in India), your first concrete step on “Bids in Foreign Currency for Domestic Projects: Prior Approval Waived” is: “Update internal guidelines to remove the requirement for prior Administrative Ministry approval for ICB-related forex transactions.” (RBI issued this 28 Apr 2008).
Circular: RBI/2007-2008/300 -- Bids in Foreign Currency for Domestic Projects: Prior Approval Waived
Issued: 28 Apr 2008
Action required: Update internal guidelines to remove the requirement for prior Administrative Ministry approval for ICB-related forex transactions.
Action required: Inform your constituents and customers about this procedural simplification for bids in foreign currency.
Action required: Continue to verify that transactions comply with other FEMA provisions and any other applicable laws.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4149&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.