What changed
This Master Circular consolidates all existing instructions on miscellaneous remittances from India for residents into a single document, replacing earlier circulars. It includes a sunset clause, meaning it will be withdrawn on July 1, 2013, and replaced with an updated version. The circular reiterates that drawal of foreign exchange includes use of international credit/debit cards and ATM cards.
What it means for you
Banks must follow the consolidated rules for resident remittances, ensuring compliance with FEMA and Schedule III limits. The sunset clause requires banks to prepare for an updated circular by July 2013. The inclusion of cards in 'drawal' means all card transactions are subject to the same rules, impacting monitoring and reporting.
What you must do
- Review and update internal policies to align with this consolidated master circular.
- Ensure staff are trained on Schedule III limits and documentation requirements for remittances.
- Monitor all card transactions (credit, debit, ATM) as part of foreign exchange drawal rules.
- Prepare for the sunset clause by planning for the updated circular due July 1, 2013.
Who it affects
All Authorised Dealer banks in foreign exchange, Resident individuals making remittances, Compliance and forex operations teams
What is the Liberalised Remittance Scheme limit mentioned in this circular?
The circular states the Liberalised Remittance Scheme allows resident individuals to remit up to USD 200,000 per financial year for permissible current or capital account transactions.
Do international credit card transactions fall under these rules?
Yes, the circular clarifies that 'drawal' of foreign exchange includes use of International Credit Cards, International Debit Cards, and ATM cards, so all rules apply to such transactions.
What happens after the sunset clause date of July 1, 2013?
The circular will stand withdrawn on July 1, 2013, and will be replaced by an updated master circular on the same subject, as per the sunset clause mentioned.