Current account transaction limit amended, raising the schedule threshold and altering permitted remittance ceiling for transactions.
The Central Government substituted the prior monetary figure with a higher monetary figure in item No. 2 of Schedule III to the Foreign Exchange Management (Current Account Transactions) Rules, 2000, thereby increasing the permissible current account transaction threshold; the change was issued under the proviso to Section 5 read with clause (a) of sub section (2) of Section 46 of the Foreign Exchange Management Act and comes into force on publication in the Official Gazette.

Diplomatic deposit eligibility expanded to include non-diplomatic staff nationals holding official embassy passports.
Amendment broadens Regulation 4(3) to substitute the phrase to include non-diplomatic staff who are nationals of the concerned foreign countries and hold official passports of foreign embassies, and inserts "and non-diplomatic staff" in Clause (c) so that both diplomatic personnel and qualifying non-diplomatic staff are covered.

Foreign currency accounts: DTA units may receive foreign exchange payments for supplies to SEZ units under amended FEMA rules.
The Regulations amend the Schedule to the 2000 Rules by inserting in paragraph 1, sub paragraph (1A), clause (ii) that payments received in foreign exchange by a unit in the Domestic Tariff Area for supply of goods to a unit in a Special Economic Zone are included under the foreign currency account provisions; the amendment takes effect on publication in the Official Gazette.

Non-resident shareholding: existing non-resident shareholders may apply for additional shares subject to overall sectoral cap restraints.
The Regulations add a provision allowing existing non-resident shareholders to apply for and the investee company to allot additional shares, provided that the overall issue of shares to non-residents in the total paid-up capital does not exceed the sectoral cap, and renumber existing sub-regulations 2(ii) and 2(iii) of Regulation 6 as 2(iii) and 2(iv).

Borrowing from close relatives abroad allowed subject to minimum maturity, interest-free terms, and permitted receipt channels.
Resident individuals may borrow from close relatives abroad subject to conditions: minimum one-year maturity, interest-free, and receipt by inward remittance in free foreign exchange through normal banking channels or by debit to the non-resident lender's NRE/FCNR account; 'close relative' adopts the definition in Section 6 of the Companies Act, 1956. The amendment also omits the Schedule clause titled 'Scheme for raising loans from NRIs on repatriation basis.'

Resident Foreign Currency Account permits residents to hold non interest foreign currency balances for specified receipts and permitted transactions.
A resident may open and maintain with an Authorised Dealer a Resident Foreign Currency (Domestic) Account funded from specified foreign exchange receipts (currency notes, bank notes and travellers cheques acquired on travel, honoraria or gifts from non residents, or unspent travel foreign exchange). Debits are permitted for current account transactions under the Current Account Transactions Rules and permissible capital account transactions; the account is a non interest Current Account and there is no ceiling on balances.

Offshore Banking Unit operations limited to foreign exchange; transactions with residents barred without Reserve Bank permission.
Offshore Banking Units in notified Special Economic Zones are not regarded as authorised dealers under the Foreign Exchange Management Act unless directed by the Reserve Bank, and general regulations do not apply except as provided. OBUs shall not transact with residents in India without Reserve Bank permission. OBUs may undertake foreign exchange business only, may deal with authorised dealers in India on a principal-to-principal basis, and may transact with SEZ units only within eligibility, ceilings and conditions prescribed; banking business under the Banking Regulation Act is confined to foreign exchange and subject to licence conditions.

Rupee derivative contract rebooking restriction: cancelled contracts require RBI permission, while export contracts remain exempt.
The amendment provides that rupee involving derivative contracts, once cancelled, shall not be re booked except with Reserve Bank permission, though they may be rolled over at ongoing rates on or before maturity; contracts covering export transactions are exempt and may be cancelled, re booked or rolled over without restriction. The amendment substitutes item (h) of paragraph A.1 of Schedule I and takes effect upon publication in the Official Gazette.

EEFC account limits updated: resident categories may retain specified portions of foreign earnings in EEFC accounts, with RBI approval for higher retention.
Amendment revises EEFC account retention limits for defined resident categories, permitting differentiated proportions of foreign exchange earnings to be credited to EEFC accounts, subject to Reserve Bank approval for higher retention. It clarifies that professional earnings - including director's fees, consultancy fees, lecture fees and honoraria - qualify for credit when rendered in an individual capacity and expands the definition of "professional" by listing example professions while allowing RBI to specify additional persons.

Rupee loans to NRI/PIO employees allowed subject to staff-scheme parity and mandatory NRO credit plus remittance-only repayment.
Insertion permits Indian incorporated bodies to grant rupee loans to NRI or PIO employees for personal purposes, including housing, provided loans follow the lender's staff welfare/housing loan schemes and resident-staff terms; loan proceeds must not be used for specified disallowed purposes; proceeds must be credited to the borrower's NRO account; and repayment must be by remittance from abroad or from the borrower's NRE/NRO/FCNR accounts, with lenders prohibited from accepting other sources.

SEZ units foreign commodity hedging allowed without prior approval, subject to stand-alone isolation requirement for export-import transactions.
A proviso to the Foreign Exchange Management (Foreign exchange derivative contracts) Regulations, 2000 permits a unit in a Special Economic Zone to enter into commodity exchange contracts outside India to hedge export/import price risk without prior Reserve Bank approval, provided such contracts are entered on a stand-alone basis, meaning the SEZ unit is completely isolated from financial contracts with its parent or subsidiary for those transactions.

Amendment to foreign exchange regulations removes a specified condition in Regulation 6 and renumbers subsequent conditions.
Amendment deletes a specified condition in clause (b) of Regulation 6 of the Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations 2000 and renumbers the subsequent conditions accordingly. The Reserve Bank of India issues the amendment under powers conferred by the Foreign Exchange Management Act and titles it the Amendment Regulations 2002, which come into force on publication in the Official Gazette.

Refunds of property deposits allowed where payments originated from NRE/FCNR or lawful remittances, subject to genuineness checks.
The amendment permits refunds of application/earnest money or purchase consideration for non allotment or cancellation of property bookings, together with interest net of income tax, where the original payment originated from the holder's NRE or FCNR account or was remitted from abroad through normal banking channels, subject to the authorised dealer being satisfied about the genuineness of the transaction.

Foreign Currency Accounts for SEZ units allowed subject to receipt, usage and restriction conditions under amended FEMA regulations.
A unit in a Special Economic Zone may open, hold and maintain a Foreign Currency Account with an authorized dealer provided all foreign exchange receipts of the unit are credited thereto; foreign exchange purchased in India against rupees requires prior RBI permission before credit; funds are to be used for bona fide trade transactions of the SEZ unit; balances are exempt from specified restrictions in the cited government notification; and funds in these accounts may not be lent or made available to any resident in India other than a SEZ unit.

Remittance limits revised; NRIs and PIOs may remit inherited assets with tax clearance through authorised dealers.
The amendment defines Non-Resident Indian (NRI), replaces the prior rupee limit with an annual foreign-currency ceiling for remittance of assets, and permits NRIs/PIOs to remit inherited assets up to that annual ceiling on production of documentary evidence and a tax clearance/no-objection certificate; all installments must be made through the same authorised dealer. Authorised dealers may effect eligible remittances without prior Reserve Bank approval, and a related provision concerning remittances exceeding the annual ceiling on account of legacy, bequest or inheritance to persons permanently resident abroad is substituted.

Foreign insurance restriction relaxed so SEZ units may obtain general insurance from insurers outside the country.
An amendment to Regulation 3 of the Foreign Exchange Management (Insurance) Regulations, 2000 inserts a proviso exempting units located in Special Economic Zones from the prohibition on taking general insurance policies issued by insurers outside India; the amendment is made under section 47(2) of the Foreign Exchange Management Act and takes effect on publication in the Official Gazette.

Borrowing limit increase under foreign exchange regulations expands permitted threshold for external borrowing and lending.
The amendment substitutes the earlier fifteen per cent limit with twenty five per cent in Regulation 4(2)(i) of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000, constituting the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) (Amendment) Regulations, 2002; it comes into force on publication in the Official Gazette and partially modifies Notification No. FEMA 3/2000-RB.

Acquisition of foreign securities: limits and approval framework for resident individuals clarified, with resale without prior approval allowed.
The amendments allow a resident individual to acquire qualification shares in a foreign company for a director's post subject to minimum required holding, an upper limit of one percent of paid-up capital, and a yearly monetary ceiling; acquisitions beyond these limits require prior RBI approval. They also permit acquisition of rights shares by resident individuals by virtue of existing holdings, and provide that qualification shares and rights shares acquired under these provisions may be sold without prior approval.

Foreign exchange account limits updated: revised EEFC crediting percentages and RBI discretion to permit higher holdings.
Amendment replaces percentage ceilings for crediting foreign exchange to EEFC Accounts, specifying full allowance for Status Holder Exporters, reduced allowances for 100% EOUs and notified park units, and a lower allowance for other residents; it empowers the Reserve Bank to permit higher holdings on application and inserts a specification of qualifying foreign exchange earnings while deleting a proviso from the new sub paragraph.

Regulatory amendment: Status Holder exporters now eligible alongside Special Economic Zone units under Regulation 9 of export rules.
Amendment adds the words "or by a Status Holder exporter, as defined in the EXIM Policy in force," to clause (a) of sub regulation (2) of Regulation 9, thereby making Status Holder exporters eligible alongside units in a Special Economic Zone for the purposes of that clause.