Non-resident rupee account rules: eligibility, permitted credits/debits and remittance controls with documentary and CA certification requirements.
The Circular consolidates RBI directives regulating Non-Resident Ordinary Rupee (NRO) Accounts: eligibility (NRIs, PIOs, visiting foreign nationals), permitted account types and joint holdings; permissible credits (inward remittances, foreign currency tendered, rupee dues) and debits (local payments, remittance of current income, repatriation subject to an annual ceiling); documentary, undertaking and Chartered Accountant certificate requirements for remittance of sale proceeds and assets; nationality-based restrictions; conditions for conversion on departure; loan/overdraft and Power of Attorney operational constraints; change of resident status procedures; and tax and reporting obligations for authorised dealers.

Vostro account controls: prior RBI approval, strict credit funding procedures and mandated collateral, audit and reporting requirements.
Prior Reserve Bank approval is required for AD Category I banks to open and maintain rupee and foreign currency vostro accounts of non resident Exchange Houses; the memorandum prescribes permitted uses (primarily inward personal remittances), three funding procedures (DDA, Non DDA, Speed Remittance) with specified collateral and audit/inspection regimes, separate rupee and foreign currency accounts, strict credit basis operations with no overdrafts, documentary and AML/KYC due diligence, prudential caps and extensive internal control, monitoring and reporting (Statements A-E and annual Board approved review) to ensure timely funding, prevent concealed overdrafts and maintain compliance.

Line of Credit conditions require majority Indian content and specified disbursement timelines under FEMA authority.
Exim Bank provided a USD 35.20 million Line of Credit to the Kingdom of Combodia for specified projects and supplies, requiring at least 85 per cent of contract value to be sourced from India; remaining non consultancy inputs may be procured abroad. The Credit Agreement (effective January 17, 2008) sets LC/disbursement deadlines at 48 months from scheduled completion for project exports and 72 months from execution for other supplies. Shipments must be declared on GR/SDF forms. No agency commission is payable under the LOC, though exporters may use their own funds or EEFC balances for commissions, subject to AD Category I bank compliance and realization rules. The directions are issued under FEMA provisions.

Line of Credit terms require majority India sourced supplies and specified LC opening deadlines under FEMA oversight.
Exim Bank's USD 60 million Line of Credit to Myanma Foreign Trade Bank finances eligible exports for a hydropower project and other supplies, requiring at least 85% India sourced goods and services. The Credit Agreement (effective December 19, 2007) sets LC opening deadlines: 48 months from scheduled completion for project exports and 72 months from agreement date for other supplies. Shipments must be declared on GR/SDF forms. No agency commission is payable under the LOC; exporters may use own funds or EEFC balances for commission remittance after realisation, subject to AD Category I bank approval. Directions are issued under FEMA sections 10(4) and 11(1).

Rupee value revision of special currency basket alters settlement basis under deferred payment protocols; banks must notify constituents.
The Reserve Bank fixed a revised rupee value for the special currency basket as the valuation basis for settlements under the Deferred Payment Protocols between the Government of India and the erstwhile USSR, effective from the notified date. Authorised Dealer Category - I banks are directed to inform their constituents of the revision. The directions are issued under the Foreign Exchange Management Act and without prejudice to other statutory permissions.

Line of Credit terms: export financing allowed with Indian sourcing, shipment declarations and limited agency commission under FEMA.
A Line of Credit from Exim Bank to the Nigerian Export Import Bank finances exports of eligible goods and services from India, requiring at least 85% Indian supply. The facility is time limited for opening Letters of Credit and disbursements; shipments must be declared on GR/SDF forms. Agency commission is generally disallowed but Reserve Bank may permit limited commission for exports needing after sales service subject to prior regional approval and invoice deduction; otherwise exporters may use own funds or EEFC balances. AD Category I banks must inform exporters and obtain full LOC details. Directions are issued under FEMA.

Short selling permission allows FIIs to short sell, lend and borrow equity shares under regulatory conditions.
SEBI-registered FIIs and their sub-accounts are permitted to short sell and to lend and borrow equity shares of Indian companies subject to RBI and SEBI conditions. Permission is conditional on compliance with current FDI policy and exclusion of shares on the RBI ban/caution lists; borrowed shares may be used only for delivery into short sales; margin must be cash with no interest payable to FIIs. Designated custodian banks must report such transactions daily for RBI monitoring, and related amendments to FEMA regulations are being made.