Trade credit rules: short maturities for general imports, extended terms allowed only for capital goods with reporting obligations.
ADs may approve trade credits (suppliers' or buyers' credit) with original maturity up to one year for all EXIM-permissible imports; maturities exceeding one year and less than three years are permitted only for imports of capital goods. Trade credits of three years or more fall under External Commercial Borrowings. ADs may not approve credits beyond the per-transaction ceiling, may not roll-over beyond permissible maturity, and must observe prescribed all-in-cost ceilings. ADs must submit monthly consolidated Form TC reports with unique identification numbers and follow specified data formats.

Remittance of salary for maintenance of close relatives abroad extended to Indian nationals on deputation, authorising authorised dealers to permit transfers.
Authorised Dealers may allow remittance of net salary (after deduction of taxes, provident fund contributions and other deductions) for maintenance of close relatives abroad by a citizen of India who is on deputation to the office, branch, subsidiary or joint venture in India of an overseas company, pursuant to Government Notification G.S.R.397(E) which amends Schedule III to include deputation and substitutes "employment or deputation of" in the explanation.

Lines of credit for export financing permit limited commission for after sales service with prior approval and specific reimbursement terms.
Exim Bank provided Lines of Credit of USD ten million each to Zambia and BGK Poland to finance eligible exports, with specified last dates for opening letters of credit and disbursements. Shipments under these LOCs must be declared on GR/SDF forms. No agency commission is normally payable, but the Reserve Bank may allow up to five per cent commission for exports requiring after sales service, payable locally by deduction and reimbursed by Exim Bank at ninety per cent of invoice value minus commission; prior approval is required.

Line of Credit for export financing extends Exim Bank support to Kazakhstan buyers with declaration and commission conditions.
Exim Bank's Line of Credit to Bank TuranAlem, Kazakhstan finances exports eligible under the Exim Policy; the agreement is effective from March 24, 2004 with last dates for opening Letters of Credit and final disbursement on March 23, 2006 and September 23, 2006 respectively. Shipments must be declared on GR/SDF forms. No agency commission is normally payable; RBI may permit up to 5% commission for exports needing after sales service, payable in Kazakhstan by invoice deduction, with Exim Bank reimbursing 90% of the f.o.b./c&f/c.i.f. value minus commission after prior approval. Directions issued under FEMA sections cited.

Letter of credit refinancing facility enables export financing to designated Iranian banks with no agency commission payable.
Exim Bank made a 24 month refinancing facility available to the Central Bank of Iran from Feb 28, 2004 to Feb 27, 2006 to finance exports; specified Iranian banks are designated as Issuing Banks and certain Indian banks as advising/negotiating banks. Shipments must be declared on GR/SDF forms. No agency commission is payable under the credit and exporters must fund any required commission themselves. Authorised Dealers must notify exporters and refer them to Exim Bank for details. The directions rest on the Foreign Exchange Management Act, 1999.

External Commercial Borrowings rules: end use prohibitions and mandatory monthly ECB 2 reporting require borrower and AD compliance.
The circular prohibits use of ECB for working capital, general corporate purpose and repayment of rupee loans, fixes the Automatic Route ceiling at USD 500 million per financial year, mandates monthly submission of the ECB 2 Return certified by the designated Authorised Dealer within seven working days of month end (applicable to existing borrowers from January 2004), assigns primary compliance responsibility to borrowers with ADs certifying conformity, and authorises ADs to approve cost neutral repayment elongation for certain erstwhile small limit ECBs with lender consent, reporting such approvals to the Reserve Bank and in ECB 2.

Foreign currency borrowing limits tightened; fresh overseas borrowings require prior central bank approval and monthly reporting.
All categories of overseas foreign currency borrowings by Authorised Dealers, including existing ECBs and unadjusted Nostro overdrafts, shall not exceed 25 per cent of unimpaired Tier I capital or USD 10 million, whichever is higher; fresh borrowings above this limit require prior Reserve Bank approval. Borrowings for export credit under the IECD framework and subordinated debt used as Tier II capital remain outside this limit. ADs must report total outstanding overseas borrowings as per the prescribed format on the specified reference date and monthly thereafter.

Liberalised Remittance Scheme requires prior regulatory approval for banks marketing foreign currency deposit schemes with mandatory disclosures.
All banks, Indian and foreign, including those without an operational presence in India, must obtain prior regulatory approval before marketing schemes in India that solicit foreign currency deposits for overseas branches or act as agents for overseas mutual funds or other foreign financial service providers. The requirement is imposed to ensure adequate disclosures and to protect the interests of resident individuals investing under the Liberalised Remittance Scheme while preserving the residents' freedom to undertake permissible capital account transactions under the Scheme.

Line of Credit enables export financing with conditional agency commission approval and specified reimbursement rules.
Line of Credit of USD ten million to Central Bank of Djibouti finances Category A and B exports and agreed items; Credit Agreement effective January 14, 2004 with LC opening and utilisation terminal dates of January 13, 2006 and July 13, 2006. Shipments must be declared on Forms GR/SDF. Agency commission is generally not payable under the LOC; Reserve Bank may allow up to five per cent for exports requiring after sales service with prior approval, paid in Djibouti by invoice deduction. Exim Bank reimburses 90 per cent of the f.o.b./c&f/c.i.f. value minus permitted commission.

Foreign Inward Remittance Payment System withdrawal: instrument withdrawn as obsolete due to electronic credits and online transfers.
Foreign Inward Remittance Payment System (FIRPS) instrument is withdrawn as obsolete due to electronic credits and online fund transfers; Authorised Dealers informed to notify constituents and to note that prior guidance in Annexure V to A.D. (M.A. Series) Circular No.11 and paragraph 3A.5 of the Exchange Control Manual is superseded; directions issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

R-Return reporting: updated formats, new purpose codes and fortnightly submissions with simplified A 2 declaration required.
Authorised Dealers must adopt updated R-Return (NOSTRO and VOSTRO) formats with deleted and reassigned items, use revised purpose codes via FET-ERS Version 6.1, and submit hard-copy returns with FET-ERS floppy on a fortnightly basis from the implementation date. The A-2 form has been combined with the FEMA declaration to simplify non-import remittance documentation for specified individual and corporate transactions. The Reserve Bank will distribute the revised package, provide training, and issued these directions under Sections 10(4) and 11(1) of FEMA, 1999.

Foreign investment cap in private banks raised under automatic route, with resident minimum maintained and regulatory approval controls.
FDI in Indian private sector banks is permitted up to 74% under the automatic route while at least 26% of paid up capital must be held by residents (except wholly-owned foreign bank subsidiaries). FIIs, NRIs and certain OCB holdings are included; transfers from residents to non-residents require approval under foreign exchange law. Portfolio investment limits for FIIs and NRIs remain subject to individual and aggregate ceilings with possible escalation by bank and shareholder resolution. Foreign banks may operate via only one channel-branch, wholly-owned subsidiary, or subsidiary within the prescribed foreign investment ceiling-and conversions or acquisitions are subject to licensing and resident shareholding conditions.

Current account liberalisation: removal of prior approval for specified resident remittances, empowering authorised dealers to allow transactions.
The circular liberalises current account transactions by removing specified government and RBI prior-approval requirements and empowering Authorised Dealers to permit a range of resident remittances, including overseas health insurance, artiste fees, agent commissions within transactional limits, short-term credit to overseas offices, advertisement payments, royalty and lump-sum technical-fee remittances subject to existing ceilings, and use-of-trademark/franchise payments while retaining approval for trademark purchase; transponder hiring approval is reassigned to the Ministry of Information & Broadcasting.

External Commercial Borrowings for overseas direct investment now permitted to fund JV/WOS formation and cross border mergers and acquisitions.
ECB proceeds may be raised by eligible resident corporates to finance overseas direct investment in JVs/WOS, including mergers and acquisitions, subject to existing ECB parameters and applicable Indian direct investment guidelines; such proceeds must be parked overseas until utilised for the investment, and the amendment is effective immediately under the Foreign Exchange Management Act.

Loans by Indian companies to non-resident branch employees permitted in foreign currency under staff welfare loan rules and standard terms.
Indian companies are granted general permission to provide foreign currency loans to employees of their overseas branches for personal purposes, treating such employees as persons resident outside India, and subjecting those loans to the lender's Staff Welfare Scheme/Loan Rules and the same terms and conditions applicable to staff resident in India and abroad.

Export of goods by way of gift liberalised; annual declaration threshold increased, easing export gift compliance.
The Reserve Bank of India has liberalised the export of goods by way of gift by raising the annual per exporter value ceiling from one lakh rupees to five lakh rupees, effective immediately; formal amendments to the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 will be notified separately and Authorised Dealers are directed to inform their constituents.

Evidence of import: accept photocopy of ex-bond Bill of Entry as final evidence after verification and clearance.
Following Customs EDI implementation, where only one copy of the ex-Bond Bill of Entry is issued, Authorised Dealers may accept a photocopy of that ex-Bond Bill of Entry, duly verified after warehouse/bond clearance, as final evidence of import; previously accepted Into-Bond Bill of Entry remained provisional pending submission of the Exchange Control copy for home consumption.

Agency commission payment allowed in foreign exchange for tea and tobacco exports to Russia against rupee state credit repayment.
Authorised Dealers may permit payment of agency commission in free foreign exchange for exports of tea and tobacco to Russia against repayment of Rupee State Credits, subject to a cap of ten per cent of invoice value; this relaxes the earlier prohibition under the Foreign Exchange Management (Current Account Transactions) Rules and follows a Government notification amending those rules.

Line of Credit terms for export finance permit limited commission for after sales service, subject to prior approval and documentation.
Reserve Bank directions under FEMA authorize an Exim Bank line of credit to ABSA Bank for financing Category A and B exports and other agreed items, effective December 30, 2003, with specified terminal dates for opening letters of credit and utilisation; shipments must be declared on GR/SDF forms. Agency commission is not payable under the facility except that Reserve Bank may permit up to five percent commission for exports requiring after sales service, subject to prior approval, invoice deduction in South Africa, and adjustment of the reimbursable amount.

Grant of rupee loans to NRIs allowed with board-approved policies; repayment via NRE/FCNR/NRO or inward remittances.
Authorised Dealers may grant rupee loans to NRIs against acceptable security under bank board-approved policy, with loan quantum, interest rate and margins decided by the Authorised Dealer per banking directives; repayments may be made from NRE/FCNR/NRO accounts or inward remittances. Proceeds must not be used for prohibited activities including chit funds, nidhi companies, agricultural/plantation activities, real estate business or farm houses, trading in transferable development rights, or capital market investments including margin trading and derivatives.