Commodity hedging by SEZ entities allowed under stand alone restriction, with off set hedges and strict operational controls.
Entities in Special Economic Zones may hedge import/export commodity price risk in international exchanges on a stand-alone basis, permitting only off-set hedges using exchange-traded futures and options (purchases only) and, where warranted, limited OTC contracts; authorised dealers must monitor for speculative/arbitrage activity. Corporates must open a Special Account for hedging flows, provide broker month-end reports countersigned by the Financial Controller to verify physical backing, reconcile broker statements within three months, and furnish an annual statutory auditor certificate confirming compliance and adequate internal controls.

Foreign exchange regulation: operational, reporting and compliance rules for authorised money changers and franchise arrangements enforced.
Memorandum prescribes operational rules and supervisory controls for Authorised Money Changers under the Foreign Exchange Management Act, 1999, including permissible purchase and sale of foreign currency, requirements for encashment certificates and cash memos, market determined exchange rates and display obligations, limits on foreign currency holdings, prohibition of cash settlement between authorised parties, procedures for replenishment and export of surplus currency, recordkeeping and reporting obligations (including prescribed monthly/quarterly statements and inclusion of franchisee transactions), concurrent audit requirements, Reserve Bank inspection powers and a franchising Scheme for appointing franchisees with specified reporting and inspection clauses.

Credit rating threshold: undeployed FCNR(B) investments now acceptable with AA rating by S&P/FITCH for authorised dealers.
Authorised dealers must treat securities rated AA(-) by Standard and Poor or FITCH IBCA as meeting the credit rating requirement for investment of undeployed FCNR(B) funds, replacing the prior reference to AA; the directions are issued under statutory exchange control powers and apply to all authorised dealers in foreign exchange.

Corporate guarantee in lieu of bid bond allowed for exporters, limited to prescribed proportion of contract value; PEM compliance required.
Exporters are permitted to furnish a corporate guarantee in lieu of a bid bond when bidding for projects abroad, including service contracts, subject to a cap at a prescribed proportion of the contract value and compliance with Memorandum PEM and other RBI instructions; authorised dealers must notify constituents and implement amendments to the FEMA notification framework as indicated.

International credit cards for NRIs/PIOs may be issued without prior approval if charges are paid from permitted NRE/FCNR funds.
Authorised dealers may issue international credit cards to NRIs/PIOs without prior Reserve Bank approval provided all charges on card use are settled only from inward remittances or from balances in the cardholder's NRE or FCNR accounts, and authorised dealers must inform their constituents and ensure compliance with this funding restriction.

Repatriation of NCD redemption proceeds permitted without prior central bank approval when original approval conditions are met.
Companies that issued NCDs/PCDs to NRIs/OCBs on a repatriation basis no longer require prior Reserve Bank permission to remit redemption proceeds, provided they have complied with all other conditions stipulated in their original approval letters and the issuance aligns with the general permission for rupee borrowings by way of NCDs under the FEMA framework.

FCNR(B) fund investment allowed in overseas long term fixed income securities subject to specified high credit ratings.
Authorised dealers may invest undeployed FCNR(B) funds in overseas long term fixed income securities provided those instruments carry at least AA by Standard & Poor's, Aa3 by Moody's or AA by Fitch IBCA; all other instructions of A.P. (DIR Series) Circular No.40 dated April 29, 2002 remain unchanged. The direction is issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 and conditions such overseas deployment on compliance with the prescribed rating requirements and existing RBI procedures.

Resident Foreign Currency Account allows residents to hold foreign currency for authorised current and capital account transactions under FEMA rules.
Residents may open a Resident Foreign Currency (Domestic) Account with Authorised Dealers using foreign currency notes, bank notes and travellers cheques from prescribed personal sources; the account is a non interest bearing current account with cheque facility, unlimited balance, and debits allowed for authorised current and capital account transactions under existing foreign exchange regulations. Authorised Dealers must follow normal account opening and KYC procedures and may forward requests to the Reserve Bank's regional offices pending formal notification.

Repatriation of sale proceeds: NRIs and PIOs may remit proceeds without a holding-period restriction, subject to original foreign exchange limits.
Removal of the lock-in period permits Non-Resident Indians and Persons of Indian Origin to remit sale proceeds of Indian immovable property without any minimum holding period, excluding agricultural land/farmhouse/plantation property, provided repatriation does not exceed the foreign exchange originally brought to acquire the property.

EEFC account repayment permitted for packing credit advances, subject to export realisation compliance and FEMA requirements.
The Reserve Bank permits exporters to repay packing credit and pre shipment credit advances, whether in rupee or foreign currency, from balances in their Exchange Earners' Foreign Currency (EEFC) Account to the extent exports have been realised; authorised dealers may allow such repayments but must ensure compliance with exchange control requirements governing export realisation and notify their constituents accordingly.

Extended realisation period for export proceeds allows exporters of specified products longer time to repatriate full export value.
Authorised dealers are to allow manufacturer exporters, merchant exporters and traders of the Annexure products an extended period from the date of shipment to realise and repatriate the full value of exports for shipments made up to the announced cut off; authorised dealers must inform constituents and implement the facility under the Reserve Bank's exchange control directions.

Cross-currency derivative reporting: consolidated half-yearly returns required from authorised dealers, with detailed recordkeeping for audit.
Authorised dealers must consolidate resident cross-currency derivative transactions into a prescribed half-yearly report showing product, number of transactions and notional principal in USD, submit it to the specified Exchange Control Department office (first for period ending 31 December 2002), and maintain detailed transaction records to enable audit and inspection under foreign exchange regulatory directions.

Prior permission for private foreign exchange releases required; regional nodal officers to process applications by fax or email.
Authorised dealers must obtain prior permission from the Reserve Bank before releasing foreign exchange above the prescribed annual limit for private visits (excluding Nepal and Bhutan). Regional Offices have nominated nodal officers to ensure same day disposal of such applications; applications may be forwarded by fax or e mail and central contact details are provided for difficulties. The instructions are issued under the Foreign Exchange Management Act and authorised dealers are to inform their constituents.

Line of credit financing for exports: 90% pre-shipment coverage with 10% buyer advance under irrevocable letters of credit.
Exim Bank's line of credit finances Indian exports of specified goods and related services to buyers in the borrower's country, subject to domestic laws; contracts require Exim Bank approval, must be in U.S. dollars and meet a minimum value, and may be financed up to 90 per cent of the f.o.b./c.& f./c.i.f. price with a 10 per cent buyer advance and the balance paid pro rata under an irrevocable letter of credit. Negotiating banks may pay beneficiaries in Indian Rupees against conforming documents (including inspection certificates) and are reimbursed by Exim Bank in U.S. dollars according to whether negotiations were effected with or without reserve.

Line of credit enables bilateral import financing under approved contracts with disbursement via specified letters of credit.
A government-to-government line of credit finances 100% of the f.o.b. value of approved contracts for eligible goods from India, disbursed only through letters of credit issued by banks in the borrowing country and advised to the State Bank of India for reimbursement. Letters of credit must be supported by the contract, include the prescribed reimbursement clause identifying the State Bank of India, and become negotiable after operative advice. Contracts and letters of credit require governmental approval and export shipments must be declared on export forms with the specified superscription and certified by authorised dealers on receipt of payment.

Foreign Currency Accounts: SEZ units allowed to open and maintain accounts with authorised dealers in India.
SEZ units are permitted to open, hold and maintain a Foreign Currency Account with an authorised dealer in India under conditions in the amended FEMA regulations; authorised dealers must notify constituents. The circular also deletes the prior special provision for EEFC accounts of SEZ units and issues directions under the Foreign Exchange Management Act.

Undertaking in lieu of Income Tax No Objection Certificate allows remittance after an accountant's certificate and declaration.
An undertaking in duplicate addressed to the Assessing Officer, accompanied by a certificate from an independent accountant, may be accepted in lieu of an Income Tax clearance Certificate or No Objection Certificate to permit foreign exchange remittances; the Reserve Bank will forward a copy to the Assessing Officer. NRIs/PIOs without NRO accounts and without taxable Indian income may remit on a simple declaration as prescribed.

Remittance of current income: non taxable NRIs may remit with a declaration; tax compliance evidence required otherwise.
NRIs/PIOs without taxable income and not maintaining NRO accounts need not furnish a Chartered Accountant's certificate for remittance of current income; Authorised Dealers may accept a duplicate declaration that the remitter is not a taxpayer in India and retain it for tax authorities. Current income may be credited to NRE accounts only when the dealer is satisfied it represents current income and that income tax has been deducted/paid/provided for; the CA certificate or tax declaration requirement applies otherwise. Maturity proceeds of NRNR deposits should be credited to NRE accounts and may be repatriated if the accountholder lacks an NRE account.

Short term credit for imports: authorised dealers may approve suppliers' or buyers' credit subject to maturity, cost and reporting rules.
Authorised Dealers may approve short term Suppliers' or Buyers' Credit for import financing in Form ECB provided the credit meets prescribed maturity and amount ceilings and the specified all in cost per annum; approvals must be issued in writing, ECB 5 statements continued, each loan given a unique Identification number, and monthly details submitted in Form ECB ST to the Reserve Bank's ECB Division, with proposals exceeding the prescribed amount forwarded to the Chief General Manager.

Foreign currency loans against FCNR(B) deposits permitted in India with strict security, maturity and repayment safeguards.
Authorised dealers in India may grant foreign currency loans to holders of their own FCNR(B) deposits in India, provided loans are made only to the deposit holder, secured fully by the deposit, documented by the holder (not by POA), and subject to conditions: loan maturity not to exceed deposit maturity; loans not for investments in India; compliance with margin and prudential instructions; repayment by foreign remittance or adjustment of the deposit; board approval and adequate monitoring required.