Non-resident guarantees prohibition: banks must ensure guarantees to resident Indian parties comply with FEMA restrictions and due diligence. Non resident guarantees, including SBLCs and performance guarantees in favour of residents in India, are not permitted under FEMA; Category I Authorised Dealer banks must apply due diligence when advising or transmitting such guarantee contracts to resident constituents to ensure compliance with FEMA restrictions and to bring these requirements to the constituents' attention.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Non-resident guarantees prohibition: banks must ensure guarantees to resident Indian parties comply with FEMA restrictions and due diligence.
Non resident guarantees, including SBLCs and performance guarantees in favour of residents in India, are not permitted under FEMA; Category I Authorised Dealer banks must apply due diligence when advising or transmitting such guarantee contracts to resident constituents to ensure compliance with FEMA restrictions and to bring these requirements to the constituents' attention.
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