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of RBI has observed instances of non-resident guarantees, including standby letters of credit and performance guarantees, issued to persons resident in India, which are not permitted under FEMA regulations. Authorized Dealer Category-I banks must ensure guarantee contracts advised to or on behalf of their resident constituents comply with FEMA regulations. Banks are directed to notify their constituents about this circular issued u/ss 10(4) and 11(1) of FEMA, 1999.
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