Foreign exchange management rules regulate current and capital account transactions, authorising dealer duties and approval/reporting requirements.
The circular implements the Foreign Exchange Management Act, 1999 from 1 June 2000, prescribing that current account transactions are generally permitted except where prohibited or regulated by schedules and approvals; capital account transactions are regulated by detailed RBI Regulations setting ceilings, eligibility criteria, funding sources, reporting obligations and prior approval requirements; authorised dealers must obtain declarations, preserve records, refuse non compliant transactions and report suspected contraventions; and transactions outside the Act's permissions require Reserve Bank approval.