Resident foreign currency accounts may be credited with repatriated foreign exchange from earnings and close-relative gifts.
Resident Foreign Currency (Domestic) Accounts may be opened and credited by resident individuals with foreign exchange earned (including export receipts, royalty, honorarium) and with gifts from close relatives, provided such foreign exchange is repatriated to India through normal banking channels; authorised dealers are instructed to implement this expansion and notify constituents, and amendments to the prior notification will be issued to reflect these additional permitted credits.

Foreign exchange risk management relaxations expand authorised dealers' ability to offer swaps, overseas investments and forward covers subject to prudential controls.
Reserve Bank relaxes limits: authorised dealers may offer foreign currency rupee swaps to customers for hedging without the earlier specified market access caps (caps still apply where swaps create market supply); overseas investment caps are withdrawn in favour of Board approved limits; caps on forward bookings based on past trade performance are increased and annual rebooking caps for near term exposures removed, with rebooking restrictions for exposures beyond one year and cancelled long term swaps; timing restriction on hedging Tier I capital removed; forward cover to non residents for inward investments permitted subject to verification.

EEFC account eligibility expanded: DTA suppliers to SEZs may credit foreign exchange receipts to EEFC accounts.
Payments received in foreign exchange by a unit in the Domestic Tariff Area for supply of goods to a unit in a Special Economic Zone, when received out of the DTA supplier's foreign currency account, are to be treated as eligible foreign exchange earnings for credit to the Exchange Earner's Foreign Currency (EEFC) Account; authorised dealers may credit such receipts, the facility is effective from the date of the circular, and regulatory amendments to the Foreign Currency Accounts Regulations, 2000 will be notified.

Surrender of export incentives required before write-off of unrealised export bills; authorised dealers must obtain proof and audit compliance.
Authorised dealers must obtain documentary evidence that exporters have surrendered any export incentives availed in respect of export bills before permitting those bills to be written off as unrealised export dues, and must implement internal or external auditor checks (random sample/percentage checks) on outstanding export bills written off; existing terms of earlier circulars remain unchanged and directions are issued under FEMA.

Full convertibility of deposit schemes restricts renewal of NRNR deposits and prescribes credit or repatriation routes.
Full convertibility clarifies that renewals under the NRNR scheme are prohibited from April 1, 2002; matured NRNR receipts presented after that date must be credited to the holder's NRE account and may subsequently be transferred to FCNR(B) accounts. If no NRE account exists, maturity proceeds may be repatriated abroad, and NRNR deposits maturing on or after April 1, 2002 for persons who became residents may be credited to RFC accounts.

NRO account debit permission for international credit card charges now allowed, subject to resident card use conditions.
Permission is granted to settle International Credit Card charges from Non Resident (Ordinary) Rupee (NRO) accounts of NRI/PIO cardholders, allowing authorised dealers to debit NRO accounts up to the card limit, subject to the conditions governing use of International Credit Cards by residents; amendments to the Foreign Exchange Deposit Regulations will be notified separately.

Direct investment ceilings liberalisation in SAARC and Myanmar expands automatic route access for Indian investors under FEMA.
The Reserve Bank of India has liberalised Indian direct investment by raising the ceiling for investment in Myanmar and SAARC countries (excluding Pakistan) under the automatic route and increasing the rupee-denominated investment ceiling for Nepal and Bhutan; implementing amendments to the Foreign Exchange Management Regulations will be issued separately and authorised dealers must inform constituents, the directions being issued under the statutory FEMA framework.

Evidence of import documentary acceptance extended to audited autonomous bodies; authorised dealers may accept auditor/CEO declaration.
Authorised dealers may accept either the Exchange Control copy of the Bill of Entry for home consumption or a certificate from the CEO or auditor confirming goods were imported for eligible importers; the facility, previously limited to listed companies meeting a net worth threshold and public sector entities, is extended to autonomous bodies and specified scientific/academic institutions whose accounts are audited by the statutory government auditor, provided a declaration from the auditor/CEO confirming such audit accompanies the documentary evidence.

Deduction of tax at source: revised undertaking and accountant certificate formats ensure correct withholding for remittances.
Remitters must furnish revised proforma undertakings accompanied by an accountant's certificate certifying the nature and amount of income, tax payable and tax paid; authorised dealers and the Reserve Bank shall obtain and forward these documents to the Assessing Officer. The new formats replace earlier proformas to ensure correct deduction of tax at source, require particulars and reasons for nil or lower withholding claims, and reiterate remitter liability for any shortfall with interest and penal consequences.

Foreign currency loans against FCNRB deposits restricted: prohibitions on relending, agricultural and real estate use apply.
Foreign currency loans in India granted against the security of FCNR(B) deposits to account holders are subject to the same prohibitions as rupee loans against NRE/FCNR deposits, including bans on relending, agricultural or plantation activities, and investment in the real estate business; authorised dealers must inform their constituents and the directions are issued under the Foreign Exchange Management Act, 1999.

Foreign exchange remittance permissions expanded for miscellaneous current account transactions, allowing authorised dealers to permit specified cross border payments.
The Reserve Bank permits remittance of foreign exchange for specified miscellaneous current account purposes and directs authorised dealers to implement Annexure provisions superseding parts of the Exchange Control Manual. Authorised dealers may allow remittances without prior Reserve Bank approval for items such as travel passes, overseas hotel reservations, prepaid telephone card sale proceeds, overseas TV subscriptions and eligible advertisement charges, subject to conditions on commission, travellers' entitlements and beneficiary residence, and may facilitate foreign currency payments between export units and for centrally authorised project bids.

Resident Foreign Currency Account allows residents to hold non interest foreign currency balances for permitted current and capital transactions.
A Resident Foreign Currency (Domestic) Account may be opened, held and maintained with an Authorised Dealer in India from foreign exchange acquired as currency notes, bank notes and travellers cheques, including unspent travel foreign exchange, honoraria, gifts and payments from non residents visiting India. Debits are permitted for current account transactions under the Current Account Transactions Rules and for permissible capital account transactions; the account must be a non interest bearing Current Account and there is no ceiling on balances.

ADR/GDR/FCCB proceeds may be used to fund divestment subject to repatriation, approvals, and sectoral FDI limits.
Sponsored issues of ADRs/GDRs/FCCBs against existing shares are permitted for divestment, subject to compliance with depository receipt scheme rules and government guidelines; companies must offer the facility pari-passu, secure a special resolution, repatriate proceeds within one month, limit escrow retention to three months, treat tranches as separate transactions, furnish full particulars to the Exchange Control Department within 30 days, and obtain required approvals including FIPB clearance where foreign equity induction occurs.

Foreign exchange release limit for private visits increased; prior Reserve Bank permission required for releases above the prescribed threshold.
The permissible release of foreign exchange for resident individuals on private visits abroad has been liberalised by raising the ceiling on releases without prior Reserve Bank permission; releases to Nepal and Bhutan remain excluded. Authorised Persons must submit applications for permission to release amounts exceeding the prescribed ceiling to the Reserve Bank's Regional Office through the Authorised Person channel, and must inform their constituents of the change. The circular is issued under the statutory powers in the foreign exchange law.

Forward cover for foreign institutional investors: FIIs may hedge full market value of equity holdings, subject to existing Schedule II terms.
Registered Foreign Institutional Investors are permitted to enter into forward contracts to hedge the market value of their entire equity investment as on a particular date, without reference to the earlier cut off or percentage limit; hedges that become partially or fully naked due to portfolio shrinkage may continue to original maturity if desired. Other Schedule II requirements remain unchanged and regulatory amendments will be notified separately under FEMA.

Advance remittances for imports: authorised dealers may permit larger unguaranteed remittances without prior central approval, subject to repatriation rules.
Authorised dealers may allow advance remittances for import of goods up to the raised threshold without prior Reserve Bank approval; where importers fail to import within the prescribed period including any authorised extension, the remitted amount must be repatriated immediately, and all other conditions of the earlier circular remain unchanged.

Overseas investment limits for banks expanded, permitting higher proportion of unimpaired Tier One capital to be invested abroad.
Banks may invest up to 50 per cent of their unimpaired Tier 1 capital or up to USD 25 million, whichever is higher, in overseas money market instruments and/or debt instruments; prior limits and borrowing instructions otherwise remain unchanged, and regulatory amendments to the Foreign Exchange Management (Borrowing or lending in foreign exchange) Regulations, 2000 will be notified separately under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999.

Line of Credit financing for exports to PTA member countries enables majority contract value reimbursement under irrevocable letters of credit.
Exim Bank extended a Line of Credit to PTA Bank to finance exports of eligible goods and related services from India to PTA member countries. Contracts require Exim Bank's prior approval, must be in U.S. dollars with an agreed minimum value, and provide for an advance payment by the buyer with the balance paid pro rata under an irrevocable letter of credit conforming to UCP. Negotiating banks in India may pay the financed portion in rupees on presentation of compliant documents and are reimbursed by Exim Bank in U.S. dollars according to negotiation terms.

Refunds to NRE/FCNR accounts permitted for NRIs/PIOs on non allotment or cancellation, subject to original payment origin and verification.
Refunds of purchase consideration for non-allotment or cancellation may be credited to NRE/FCNR accounts, with interest net of tax, provided the original payment originated from the holder's NRE/FCNR account or remittance from outside India and the authorised dealer is satisfied about the genuineness of the transaction.

Delegation to authorised dealers to repatriate share-purchase refunds permitted, subject to bonafide, inward-remittance and non-interest conditions.
Authorised dealers are delegated authority to permit repatriation of refunds of funds received for purchase of shares in three categories-refunds on allotment, surplus from rights issues, and surplus/cancellations under ADRs/GDRs-provided dealers are satisfied with the applicant's bonafides, that the repatriation is by inward remittance or debit to an NRE/FCNR account, and that no part of the remittance is interest.