What changed
RBI issued Master Circular No.01/2011-12, consolidating all existing instructions on miscellaneous remittances from India for residents into a single document. The circular includes a sunset clause, meaning it will be withdrawn on July 1, 2012, and replaced with an updated version.
What it means for you
For banks, this circular streamlines compliance by providing a single reference for all rules on resident remittances, including medical treatment, tours, and the Liberalised Remittance Scheme. It clarifies that drawal of foreign exchange includes use of international credit/debit cards and ATM cards, and delegates approval for transactions up to Schedule III limits to authorized dealers.
What you must do
- Ensure all staff handling foreign exchange remittances are trained on the consolidated rules in this master circular.
- Verify that transactions exceeding Schedule III limits are referred to the appropriate RBI regional office.
- Update internal systems to treat international credit/debit card usage as drawal of foreign exchange under FEMA rules.
- Prepare to replace this circular with the updated version after July 1, 2012.
Who it affects
All Authorised Dealer banks in foreign exchange, Authorised Dealer – Category II entities handling non-trade current account transactions, Resident individuals seeking remittance facilities
What is the Liberalised Remittance Scheme limit mentioned in this circular?
The circular refers to the Liberalised Remittance Scheme of USD 200,000 for resident individuals, which allows them to remit up to that amount per financial year for permissible current or capital account transactions.
Does this circular apply to international credit card usage?
Yes, the circular states that 'drawal' of foreign exchange includes use of International Credit Cards, International Debit Cards, and ATM cards, and all FEMA rules apply to their use.
What happens after the sunset clause date of July 1, 2012?
The circular will stand withdrawn on July 1, 2012, and will be replaced by an updated master circular on the same subject.