Cross border bank investment limits increased, allowing greater overseas investments and borrowings subject to ratings, board approval and ALM discipline.
Banks may invest in overseas money market and debt instruments up to twenty five per cent of unimpaired Tier I capital or the equivalent baseline amount, and may place undeployed FCNR(B) funds in long term fixed income securities provided instruments meet prescribed credit ratings, board approved type/maturity and overall caps, maturities do not exceed underlying FCNR(B) deposit maturities, and all investments comply with gap discipline and risk management/ALM guidelines; borrowings from head offices and overseas correspondents are permitted to the same revised ceiling.

Current account transaction reporting changes: RBI discontinues ORR forwarding and requires half yearly ORA submissions.
Authorised dealers previously obtained Form ORR for remittances from EEFC accounts and forwarded Form ORR and monthly certified Form ORA to Reserve Bank regional offices; the Reserve Bank has discontinued forwarding Form ORR and requires submission of Form ORA on a half yearly basis instead of monthly, and authorised dealers must inform their constituents.

Export invoice value reduction permitted for jewellery and cut diamonds, enabling authorised dealers to approve modest decreases under FEMA.
Authorised dealers may approve reductions in invoice value of export bills up to 10% for exports including gold and silver jewellery and articles made of cut and polished diamonds, subject to the existing terms and conditions of paragraph C.12(b).

Two-way fungibility of ADRs/GDRs amended to recognise NSDL and CDSL for depository operations under FEMA.
Amendment to the operative guidelines for limited two-way fungibility under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 replaces the depository reference in item h by substituting a single depository name with a dual depository designation, allowing recognition of both depositories; Authorised Dealers are directed to notify their constituents and the circular is issued under FEMA authority.

Foreign currency insurance issuance allowed without prior central bank approval for specified marine, aviation, and project risks.
IRDA registered insurers may issue and receive premiums for general insurance policies in foreign currency without prior Reserve Bank approval in specified cases: marine insurance for foreign owned or chartered vessels (including Indian technical management and vessels mortgaged to foreign financiers), aviation insurance for leased aircraft used in air taxi operations, and marine cum erection all risks policies for projects with foreign collaboration or ECB financing. Authorised Dealers may permit claim remittances in these cases subject to conditions in the referenced AP(DIR Series) circular.

Export facilitation for status holder exporters: extended realisation period and permission to despatch shipping documents direct to consignees.
Permits certified Status Holder Exporters to despatch export documents directly to overseas consignees provided export proceeds are repatriated through the authorised dealer named in the GR form and a duplicate GR form is submitted for monitoring; and extends the period for realisation and repatriation of export proceeds for such certified exporters, subject to compliance with repatriation through the authorised dealer.

Status Holder Exporters may credit eligible foreign exchange receipts to EEFC accounts under the RBI facility.
Authorises certified Status Holder Exporters to credit up to 100% of eligible foreign exchange receipts to their Exchange Earners' Foreign Currency (EEFC) account, applicable to receipts on or after April 1, 2002, until further notice; regulatory amendment to follow and Authorised Dealers to notify constituents.

Line of Credit financing allows up to ninety percent export credit under UCP documentary conditions with specified contractual and documentary safeguards.
Exim Bank's credit to Bancomext finances eligible Indian exports subject to Exim Bank approval, U.S. dollar contracts above a minimum value, and financing of up to 90% of f.o.b./c.&f./c.i.f. price with a 10% buyer advance. Shipments are covered by irrevocable letters of credit advised through designated negotiating banks in India, subject to UCP (1994); documents must include inspection certificates. Negotiating banks may pay in rupees up to 90% on presentation; Exim Bank reimburses in U.S. dollars under specified conditions. GR/SDF declarations and prescribed procedural requirements apply.

Export line of credit enables major contract funding via irrevocable letters of credit with specified documentation and reimbursement procedures.
A line of credit to a foreign bank finances a substantial portion of Exim Bank approved export contracts denominated in U.S. dollars, subject to a minimum contract size, buyer advance payment and an irrevocable letter of credit for the balance. Letters of credit must comply with the Uniform Customs and Practice for Documentary Credits and be advised through designated negotiating bank offices. Negotiating banks pay beneficiaries in Indian Rupees against compliant shipment documents and are reimbursed by Exim Bank in U.S. dollars under prescribed conditions. The circular allocates bank charges, disclaims Exim Bank liability for negotiating banks, prescribes GR/SDF documentation, limits agency commission subject to conditions, lists eligible goods, and invokes powers under the foreign exchange statute.

Export credit facility enables financing of eligible Indian exports to BCIE member countries under specified letter of credit terms.
Exim Bank's line of credit to BCIE finances exports of listed eligible goods and related services to specified BCIE member countries. Contracts require prior Exim Bank approval, must be in U.S. dollars meeting a minimum contract size, and may be financed up to a specified portion of the f.o.b./c.&f./c.i.f. price. Buyers must pay an advance and the balance is paid pro rata against shipments under an irrevocable letter of credit subject to UCP (1994). Negotiating banks may pay beneficiaries in rupees and are reimbursed by Exim Bank in U.S. dollars when conditions are met.

Export of goods for exhibition permits exports without prior RBI approval, with repatriation and reporting obligations.
Exporters may export goods for exhibition or sale abroad without prior RBI approval; authorised dealers may approve GR forms subject to conditions: production of Bill of Entry within one month of re import for unsold items; repatriation of sale proceeds in accordance with the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000; and reporting to the authorised dealer on disposal and repatriation. Such transactions are subject to 100% internal audit by the authorised dealer.

FCCB automatic route: issuance allowed without government or central bank approval, subject to reporting and compliance.
An amendment allows Indian companies or corporates created by Parliament to issue FCCBs under the automatic route without prior Government or Reserve Bank approval, subject to reporting to the Reserve Bank through authorised dealers and obtaining a loan registration number; authorised dealers must ensure strict compliance with the notification and forward offer documents to the regional office for registration, pursuant to the enabling provisions of the Foreign Exchange Management Act, 1999.

Full convertibility of non-resident deposit schemes: NRNR and NRSR schemes discontinued and proceeds redirected to NRE/NRO accounts.
Authorised dealers and authorised banks are prohibited from accepting fresh deposits or opening new NRNR and NRSR accounts; existing NRNR and NRSR term deposits may continue only until maturity. NRNR maturity proceeds shall be credited to the accountholder's NRE account after notice or to the NRO account on request, and NRSR term deposit maturity proceeds shall be credited to the accountholder's NRO account. Premature withdrawal options remain, but reinvestment after premature closure is limited to the NRO account.

Overseas direct investment limits under automatic route increased; authorised dealer funding cap raised to a higher share of net worth.
Regulatory amendments raise the per financial year ceiling for Indian outbound direct investment under the Automatic Route and increase the permissible drawal from authorised dealers to a larger percentage of the Indian party's net worth as shown in the last audited balance sheet, effectuating liberalisation of overseas direct investment under the Transfer or Issue of any Foreign Security regulations.

Prepayment from EEFC accounts allowed with central bank approval to facilitate early repayment of external commercial borrowings.
Reserve Bank permits corporate borrowers to prepay External Commercial Borrowings from EEFC account balances with Reserve Bank approval and will consider, on a case by case basis, allowing crediting of higher percentages of export proceeds to EEFC accounts to facilitate such prepayment; applications must be made to the Chief General Manager, Exchange Control Department using the annexed proforma.

Use of foreign exchange for corporate donations to fund overseas academic chairs requires Reserve Bank approval and specified documentation.
Indian corporates with established track records may contribute funds from their foreign exchange earnings to set up chairs in educational institutions outside India, subject to Reserve Bank of India approval on a case-by-case basis. Authorised dealers must forward applications to the Chief General Manager, Exchange Control Department, including details of foreign exchange earnings for the last three years, a brief company background, particulars of the proposed chair, and likely benefits to the corporate.

Operating lease remittances for aircraft permitted after verification of civil aviation approvals, while purchase-option leases need prior central bank approval.
Authorised dealers may remit lease rentals and open letters of credit as security deposits for import of aircraft, engines or helicopters on operating lease after verifying requisite approvals from civil aviation authorities; financial leases with purchase options continue to require prior Reserve Bank approval under the Foreign Exchange Management framework.

Overseas direct investment restrictions: two tier structures need prior RBI approval and defaulters barred from automatic route.
Indian parties may invest directly abroad in a Joint Venture or Wholly Owned Subsidiary under Regulation 6, but proposals using a holding company or Special Purpose Vehicle abroad that sets up step down subsidiaries require prior Reserve Bank approval. Parties on the Reserve Bank's Caution List or the Defaulters List are not eligible for the automatic route; authorised dealers must verify remitters are not listed and advise listed parties to seek prior approval from the Reserve Bank.

Export credit financing under Exim Bank's line of credit secures payment via approved irrevocable letters of credit.
Exim Bank extended a line of credit to PTA Bank to finance exports of eligible goods and related services to PTA member countries, requiring Exim Bank approval of contracts, contracts in U.S. dollars above a minimum value, an advance payment by buyers, and balance payment via irrevocable letters of credit subject to the Uniform Customs and Practice for Documentary Credits. Negotiating banks pay beneficiaries in Indian rupees on presentation of conforming documents and are reimbursed by Exim Bank in U.S. dollars; inspection certificates, GR/SDF declaration and documentation procedures, commission restrictions, and specified terminal dates apply under directions issued under the Foreign Exchange Management Act.

Two-way fungibility of depository receipts permits conversion between Indian shares and ADRs/GDRs under FEMA-enabled guidelines.
Two-way fungibility of ADRs/GDRs is authorised under the foreign exchange framework, permitting conversion between Indian equity and depository receipts subject to the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and related Central Government guidelines; RBI issued operative guidelines implementing a limited two-way fungibility mechanism and confirmed the notifications provide the statutory basis, directing authorised dealers to inform constituents and relying on powers under the Foreign Exchange Management Act.