Holding licence requirement for foreign securities clarified: general permissions apply, but prior RBI approval needed when not covered.
Clarifies that no holding licence from the Reserve Bank is required for acquisition of foreign securities where general permission applies under FEMA Notification No. FEMA 19/RB-2000, including bonus shares, gifts/inheritance from non-residents, and cashless ESOP acquisitions. For transactions not covered by general or special permission, prior permission of the Reserve Bank is required, and prior RBI approval is specifically required for acquisition as qualification shares and rights shares.

Foreign exchange reporting: specified returns under FEMA no longer required, subject to limited exceptions for specific permissions.
Submission obligations for foreign exchange returns were narrowed under the Foreign Exchange Management Act, 1999: annual returns for foreign assets need not be filed except where specific permission conditions require detailed returns; authorised dealers need not submit form CIR; airline and shipping companies need not submit forms SPG and SPM because authorised dealers may permit remittances after verification; DBS statements need not be submitted following discontinuation of Diplomatic Bond Stores Accounts.

Employee acquisition of foreign securities permitted where shares offered at concession; concession may be borne by issuer or Indian unit.
Authorised dealers may allow remittance by resident individuals who are employees or directors of a foreign company, its Indian branch/office/subsidiary, or an Indian company with majority foreign equity for purchase of foreign securities under Regulation 19, provided the shares are offered at a concessional price. The concessional element under Employees Stock Option Scheme may be borne by the foreign issuer, its Indian branch/office/subsidiary, or the Indian company with majority foreign equity.

Line of Credit financing supports exports to Andean region under L/C payment, inspection and reimbursement procedures.
Exim Bank's line of credit finances Indian exports to specified Andean-region borrowers subject to Exim Bank's prior approval of contracts, U.S. dollar denomination, a contract minimum, buyer advance payment and balance under an irrevocable letter of credit. The facility finances a substantial proportion of the f.o.b./c.&f./c.i.f. value, requires pre-shipment inspection with an inspection certificate, permits negotiating banks to pay beneficiaries in Indian Rupees at spot rates against compliant documents, and provides for Exim Bank reimbursement in U.S. dollars upon prescribed communications; shipments must be declared on GR/SDF forms with specified superscription.

Exchange rate adjustment: rupee value of special currency basket revised, authorised dealers notified under FEMA for compliance.
The Reserve Bank of India, by A.P.(DIR Series) Circular No.14 dated 5 December 2001, notifies authorised dealers that a change on 19 November 2001 fixes the rupee value of the special currency basket effective 22 November 2001, directs authorised dealers to inform their constituents, and states that the directions are issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999.

Restriction on OCB investment: barred from fresh PIS purchases while existing holdings may be retained and sold on exchange.
OCBs are not permitted to make fresh purchases of shares or convertible debentures in India under the Portfolio Investment Scheme; OCBs that have already invested may continue to hold and may sell those securities on the stock exchange. Link offices of Authorised Dealers must continue daily reporting of OCB sale transactions. The change is effected by amendment to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000. OCBs continue to be eligible to open and maintain non-resident accounts and to make direct investment (FDI) under existing regulations.

Passport endorsement optional for foreign exchange; authorised dealers may release travel exchange on traveller declaration.
ADs and FFMCs need not endorse passports with amounts of foreign exchange released for tourism and private visits; they may release exchange on the traveller's declaration of amounts availed during the calendar year, while travellers may optionally seek passport endorsement for their records.

Release of foreign exchange: ceiling for currency component increased for travellers, allowing higher cash sales without prior permission.
Authorised dealers and Full Fledged Money Changers may sell foreign currency notes and coins up to US$ 2,000 or its equivalent to travellers without prior permission from the Reserve Bank, subject to being within their overall foreign exchange released to them; authorised persons must notify constituents and the directions are issued under the Foreign Exchange Management Act, 1999.

ACU mechanism routing required for exports to Nepal when importer permitted to pay in foreign exchange.
Exports to Nepal where the Nepali importer is permitted to pay in free foreign exchange shall have such payments routed through the Asian Clearing Union (ACU) mechanism; this implements settlement provisions allowing India-Nepal trade in rupees and anticipates consequential amendments to the Memorandum of the ACU. The direction is issued under specified provisions of the Foreign Exchange Management Act, 1999.

Certification of SOFTEX forms authorises designated STPI/FTZ/EPZ/SEZ officials to certify software exports under FEMA regime
Designated officials at STPIs, FTZs, EPZs and SEZs are authorised to certify exports declared on SOFTEX forms by units located there; under the Exim Policy, these officials may also certify SOFTEX forms for registered EOUs. Authorised dealers must notify their constituents of this certification authority, and the directions are issued under the Reserve Bank's foreign exchange regulatory mandate to govern SOFTEX form certification for export compliance.

Settlement of insurance claims in foreign currency permitted for non resident beneficiaries subject to prior approval and specified conditions.
Settlement of insurance claims in foreign currency is permitted where the policy was issued with specific prior approval, the loss occurred during the policy period, the claim is admitted by the insurer and supported by surveyor reports and documents, reinsurance recoveries follow agreement terms, remittances are made to non resident beneficiaries only (residents to be paid in rupee equivalent), and R Returns reporting must quote the RBI approval.

Special currency basket valuation updated; authorised dealers must apply the revised rupee value and notify constituents.
The Reserve Bank of India fixed the rupee value of the special currency basket at Rs. 54.0356 effective from 20 September 2001 following a change on 17 September 2001; authorised dealers are required to apply the revised valuation and notify their constituents. The directions are issued under the Foreign Exchange Management Act, 1999, Sections 10(4) and 11(1), and reference an earlier circular indicating the basket valuation.

Extended realisation period for exports: manufacturers of listed products allowed up to one year for repatriation of proceeds.
Manufacturer exporters of the products listed in the Annexure with export contracts meeting the specified high-value threshold in a year are permitted up to 365 days from the date of shipment for realisation and repatriation of the full export value, applicable to exports made on or after 1 October 2001 for a period of one year subject to review, under the Reserve Bank's powers conferred by the foreign exchange statute.

Extension of export realisation period to 360 days for specified countries, temporarily altering repatriation compliance obligations.
Reserve Bank temporarily extended the period for realisation and repatriation of full export value for goods and software from six months to 360 days for exports to listed countries, effective for one year for exports made on or after September 1, 2001; thereafter the six-month period resumes. The measure is issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999, and authorised dealers must notify constituents and ensure compliance, with penalties for contravention under the Act.

Counter-trade arrangements permit exporters to use escrowed foreign currency for matched imports, subject to reserve bank approval and monitoring.
Permission is granted for counter-trade arrangements between Indian and Romanian parties permitting exports to precede imports and allowing Indian exporters to open U.S. Dollar Escrow Accounts with banks in Romania, provided funds credited to those accounts are used for imports from Romania into India within six months; authorised dealers must forward proposals to the Reserve Bank regional office and monitor escrow transactions through a mirror account, and the directions are issued under FEMA with penalties for non-observance.

Export credit financing terms ensure majority of export costs are financed subject to L/C, documentation, and drawdown timelines.
Line of credit financing covers the majority of the f.o.b. value of eligible exports for specified Mauritius projects while importers pay the balance in U.S. dollars at L/C opening. Contracts require governmental approval and L/Cs must be opened by Mauritian banks, include a prescribed reimbursement clause and be supported by certificates that the importer's share has been received. Shipments must be declared on GR/SDF/SOFTEX forms with the circular reference; specified timelines govern contract signature, L/C establishment and full drawdown. Agency commission is ordinarily disallowed but may be permitted within limits for certain capital goods, and the directions are issued under the Foreign Exchange Management Act.

Prohibition on remittances for lotteries: remitting funds for lottery or similar schemes is barred and attracts FEMA penalties.
Remittances from India for participation in lotteries, lottery-like operations, money circulation schemes, or remittances purportedly to secure prize money are prohibited. Authorised dealers must inform the public of this prohibition and implement the exchange control restriction. Directions are issued under the Foreign Exchange Management Act and contraventions attract the penalties prescribed under the Act.

Line of Credit financing for exports to Tunisia: export payments supported via irrevocable letters of credit under prescribed conditions.
Exim Bank made a line of credit available to BIAT to finance eligible exports to Tunisia: contracts require Exim Bank approval, U.S. dollar denomination, a specified minimum value, and financing of up to ninety per cent of the f.o.b./c.i.f./c&f contract price. Payment terms require a ten per cent buyer advance and the balance under an irrevocable letter of credit with pre shipment inspection and inspection certificates. Negotiating banks may pay beneficiaries in Indian Rupees at spot rates and obtain reimbursement from Exim Bank in U.S. dollars subject to reserve rules; Exim Bank disclaims liability for negotiating banks. Shipments must follow GR/SDF procedures, commission rules are restricted, and directions are issued under Sections 10(4) and 11(1) of FEMA.

Line of credit financing requires letters of credit to be largely reimbursed by credit while importers pay a direct portion in US dollars.
India extended a multiyear line of credit to Sri Lanka for specified imports from India. Disbursements are by letters of credit opened by Sri Lankan banks and advised to the State Bank of India, New Delhi, which will reimburse the major share of the f.o.b. value after verifying that the importer's required direct payment in U.S. dollars has been received; claims must be supported by a negotiating bank certificate and the L/C must include the prescribed reimbursement clause.

Export proceeds reporting: authorised dealers must report outstanding export bills and file Form XOS, noting SEZ cases.
Authorised dealers must monitor export bill realisation and, where bills remain unpaid beyond the due date or six months from shipment, take up the matter with the exporter and report unresolved cases to the Reserve Bank. Units in Special Economic Zones may repatriate full export value within twelve months, but all outstanding export bills beyond six months must be reported in Form XOS, with "SEZ" indicated for SEZ units. Directions are issued under Section 10(4) and Section 11(1) of FEMA, 1999 and non-observance attracts penalties.