What changed
RBI issued a master circular consolidating all existing instructions on import of goods and services under FEMA 1999. The circular includes a sunset clause of one year, meaning it would be replaced by an updated version on July 1, 2014. It also references the Foreign Trade Policy and FEMA Current Account Rules.
What it means for you
Banks must ensure import transactions comply with the consolidated guidelines, including proper use of Form A-1 and adherence to time limits for settlement. The sunset clause implies banks should stay alert for annual updates. The circular reinforces the need for banks to verify import evidence and follow UCPDC norms for letters of credit.
What you must do
- Ensure all import payments comply with the consolidated instructions in this master circular.
- Verify that importers adhere to Foreign Trade Policy and FEMA Current Account Rules.
- Follow standard banking procedures and UCPDC norms for letters of credit.
- Maintain proper documentation and evidence of import for all transactions.
- Stay updated for the annual replacement of this circular after July 1, 2014.
Who it affects
All Category-I Authorised Dealer banks, Importers dealing with foreign exchange transactions, Bank staff handling import payments and letters of credit
What is the sunset clause in this master circular?
The circular includes a sunset clause of one year, meaning it would stand withdrawn on July 1, 2014 and be replaced by an updated master circular.
Which regulations govern import of goods and services under this circular?
Imports are governed by Section 5 of FEMA 1999, read with the Foreign Exchange Management (Current Account) Rules, 2000, and the Foreign Trade Policy issued by DGFT.
What should banks do if specific regulations are not covered in this circular?
Where specific regulations do not exist, AD Category-I banks should follow normal banking procedures and refer to underlying circulars or approach the Regional Office of RBI's Foreign Exchange Department.