Prepayment of foreign currency convertible bonds allowed under conditions; issuer-initiated with holder consent and funds restrictions.
Prepayment of foreign currency convertible bonds by Indian issuers is permitted until 30 September 2003; issuers may initiate prepayment but actual buy back requires holder consent. Prepayment must not exceed face value including expenses, bonds repurchased must be cancelled and not reissued, and funds for prepayment must not come from fresh external debt. The scheme operates under the automatic route with limits on prepayment from local resources and no limit for EEFC funds or inward equity remittances if conditions are met. Companies must report details of repurchases and sources of funds to the Ministry of Finance and the Reserve Bank within 30 days of completion.

Carry-on-Business licence form revised; applications must use the simplified, revised format for submission and processing.
All future applications for grant of Carry-on-Business (COB) licence must be submitted in the simplified revised application format attached to the press note, replacing the earlier requirement to use Form 'EE'; the designated secretariat handling industrial licence applications will accept applications in the new format.

Temporary foreign currency accounts allowed for international events with prior administrative approval and restricted permitted transactions.
Authorised dealers may open temporary foreign currency accounts for organisers of international seminars, conferences and conventions where the organiser has obtained prior approval from the concerned Administrative Ministry; permitted credits are inward remittances for registration fees, grants, sponsorships and donations, and permitted debits are payments to foreign invitees (travel, hotel, honoraria), refunds, bank charges and conversion into rupees. All other transactions require Reserve Bank approval and the account must be closed immediately after the event.

Line of Credit facility for export financing to a foreign borrower with designated eligible goods, deadlines and commission controls.
The Reserve Bank notifies that Export Import Bank has provided a line of credit to the Seychelles Marketing Board to finance exports of listed eligible goods, initial spares and related services to buyers in the borrower's country. The circular sets terminal dates for opening letters of credit and utilisation, requires GR/SDF declaration of shipments, restricts agency commission subject to limited approval and invoiced deduction in the borrower's country, directs authorised dealers to inform exporters, and cites the Foreign Exchange Management Act, 1999 as the legal basis.

Line of credit for Indian capital goods exports to Cambodia, financing the bulk via letters of credit with importer contribution.
A Government of India line of credit to the Royal Government of Cambodia finances imports of Indian capital goods, spare parts and related project and consultancy services on an f.o.b. basis covering the financed portion of approved contracts. Disbursements are made under letters of credit opened by Cambodian banks and advised to the State Bank of India; each letter of credit must contain a reimbursement clause and be supported by a negotiating bank's certificate confirming receipt of the importer's direct payment. Contracts and letters of credit must be established and drawn within prescribed timelines; shipments must be declared on specified export forms. Agency commission is restricted and prior approval is required for exceptions.

Import of goods: authorised dealers may open stand-by letters of credit for EXIM-permissible imports under industry guidelines.
Authorised dealers may open stand-by Letters of Credit on behalf of importer constituents for import into India of any goods permissible under the EXIM Policy, subject to adherence to detailed operational guidelines issued by the industry association; authorised dealers must notify concerned constituents and act under the Exchange Control directions issued under statutory powers.

Overseas direct investment automatic route liberalisation permits market purchases up to full net worth within overall investment limit.
The automatic route for overseas direct investment is liberalised to permit market purchases of foreign exchange for investment up to the investing company's full net worth; companies with a proven track record may invest by market purchases up to full net worth within the overall external investment ceiling in any bonafide business. Financial activities remain subject to Regulation 7, two tier investment prohibition continues, and entities on the Reserve Bank's caution/defaulter list remain ineligible for the automatic route.

Prepayment of External Commercial Borrowings: automatic-route prepayments from local resources now allowed without a monetary ceiling.
Authorised Dealers must permit remittances for prepayment of outstanding External Commercial Borrowings under the automatic route without any limit when prepayment is made from local resources or market purchases; prepayments from EEFC balances or fresh foreign equity inflows remain permissible without restriction. All other conditions of the earlier circular continue to apply, the facility is available until further notice subject to review, and the directions are issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999.

Line of credit for export finance ensures majority reimbursement from India while importer pays a minority share in convertible currency.
The Government of India extended a line of credit to the Government of the Lao PDR to finance eligible imports of Indian capital goods, consultancy services and consumer durables. The credit covers 90 per cent of the f.o.b. value with the importer required to pay the remaining 10 per cent in freely convertible currency at L/C opening. Contracts require bilateral approval and submission to the Ministry of Finance; letters of credit must be opened by Lao banks, advised to the State Bank of India, and claims for reimbursement must be supported by a negotiating bank certificate confirming receipt of the importer's share.

Line of Credit for export finance allows eligible Indian exports to Russia with defined documentation and commission conditions.
A line of credit from Exim Bank to a Russian borrower finances specified Indian exports and related services to buyers in the borrower's country and requires declarations on GR/SDF forms. Letters of credit must be opened and the credit utilised within prescribed terminal dates. No agency commission is payable except, on merit, a capped commission for goods requiring after sales service, payable in the borrower's jurisdiction by deduction from the invoice and reflected in the reimbursable payment calculation.

Release of Exchange for Private Travel: nomination of regional nodal officers to process large private travel exchange requests.
Nomination of regional nodal officers at Jammu, Srinagar and Nagpur to process applications for the release of exchange for private travel exceeding the authorised dealer limit; authorised dealers must notify their constituents of these contact points. The instructions are issued under statutory powers in the Foreign Exchange Management Act, 1999, to govern routing and processing of private travel exchange applications requiring Reserve Bank involvement.

Removal of ceiling on EEFC trade loans permits exporters to extend loans overseas subject to reporting and FEMA compliance.
Authorised dealers may permit exporters to extend trade-related loans and advances to overseas importers from EEFC account balances without a ceiling, effective up to June 30, 2003 and subject to review, provided such transactions comply with the Foreign Exchange Management Regulations, 2000. Dealers must report these transactions quarterly, beginning with the quarter ending March 31, 2003, in the annexed format to the concerned Regional Office; amendments to the Regulations are being issued separately.

Chartered Accountant certificate requirement for foreign television advertisement remittances relaxed where prior export receipts tracked through same authorised dealer.
Remittances for advertisement charges on foreign television may be processed without insisting on a Chartered Accountant's certificate of export earnings where the required export earnings in each of the two preceding years have been realised through the same Authorised Dealer making the remittance. In all cases, a Chartered Accountant's certificate must be obtained for each remittance certifying that the payment represents advertisement charges for telecast in foreign countries and not in India alone; authorised dealers must inform their constituents. Directions issued under Sections 10(4) and 11(1) of FEMA, 1999.

Electronic Reporting System transition ends submission of supporting schedules; authorised dealers must still file R-Return cover pages electronically.
With the implementation of the Electronic Reporting System (FET-ERS Version 5.0), prescribed supporting documents, statements and schedules previously required with R-Returns are to be discontinued; authorised dealers must nevertheless continue to submit the hard copy cover-pages of R-Return (NOSTRO) and R-Return (VOSTRO) together with electronic filing via FET-ERS.

Sponsored ADRs/GDRs proceeds: resident holders may receive foreign currency sale proceeds with FIPB approval, credited to designated accounts.
Resident shareholders converting shares into sponsored ADRs/GDRs may receive disinvestment proceeds in foreign currency provided the conversion has FIPB approval; proceeds may be credited to EEFC/RFC(D) accounts or Rupee accounts in India. Persons who were residents when offering shares but have become non-residents may elect credit to foreign currency accounts abroad or any of their accounts in India. The facility is available until further notice and regulatory amendments will follow.

Foreign exchange restriction: authorised dealers barred from releasing funds to specified sponsors without central bank clearance.
Pursuant to the High Court's prima facie directions, authorised dealers are directed not to release any foreign exchange to the three specified sponsor companies in connection with the World Cup event without prior clearance from the central bank's Exchange Control Department; the circular states these are temporary measures issued under statutory FEMA powers.

Use of International Credit Cards allowed for residents abroad without prior central bank approval, subject to prohibited items.
The amendment exempts the use of International Credit Cards by residents abroad from Rule 5 prior-approval requirements, permitting payment for expenses up to the card limit without separate Reserve Bank monetary ceilings. Existing prohibitions on purchases of items such as lottery tickets, banned magazines, sweepstakes participation and call-back services remain applicable.

Foreign exchange rules for life insurance allow foreign currency claims to be credited to RFC and NRE/FCNR accounts under prescribed conditions.
The memorandum applies foreign exchange regulations to all IRDA registered life insurers and prescribes issuance, premium collection and claims settlement rules: foreign currency policies and rupee policies have defined funding and conversion conditions; claims in foreign currency may be paid proportionate to foreign currency premia and credited to NRE/FCNR or RFC accounts as applicable; rupee policy proceeds paid in non repatriable rupees must be credited to NRO accounts. Reinsurance is board approved with authorised dealers permitted to remit under approved terms. Insurers may maintain foreign currency accounts abroad, repatriate surplus funds, use overseas balances for normal overseas expenses and certain employee benefits, and make specified overseas investments without prior approval.

Acquisition of immovable property abroad: Indian corporates may purchase overseas premises with prior central bank permission.
Indian resident companies with overseas offices may acquire immovable property abroad for business and staff residential purposes only with prior permission of the Reserve Bank. Applications, submitted through an authorised dealer to the Chief General Manager, Exchange Control Department, must use the annexed form furnishing corporate details, overseas office establishment date, audited net worth, overdue export receivables, property particulars and purpose, remittance amount, source of funds and any investigations. Permission is time limited and subject to conditions and forthcoming amendments to the Foreign Exchange Management Regulations, 2000.

Parking of ECB funds abroad permitted with restrictions on use, documentary import support, reporting, and repatriation obligations.
Corporates raising External Commercial Borrowings may retain borrowed funds abroad in bank accounts for future forex requirements provided debits are only for approved purposes, payments to overseas suppliers are supported by import documents with certified evidence of imports submitted with the ECB2 return, parked deposits are not used to provide fund based or non fund based facilities in India, accounts are closed and unspent balances repatriated when requirements are met, and specified account details are submitted to the Reserve Bank through the authorised dealer within eight days of opening.