RBI Circular on ‘Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses’

RBI Circular on ‘Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses’

1. The Reserve Bank of India issued a Circular on ‘Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses’ on January 09, 2014. The web-link of the said Circular is as below for ready reference:
https://rbidocs.rbi.org.in/rdocs/Notification/PDFs/AD88090114FS.pdf

2. Highlights of said Circular are as below:
A.P. (DIR Series) Circular No. 88 dated January 09, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses’

With a view to expanding the scope of the Rupee Drawing Arrangements (RDAs), it has been decided to include additional items underPermitted Transactions under RDAs. The amended instructions under Part (B) of Annex-I to the A.P. (DIR Series) Circular No. 28 dated February 6, 2008 are as given below:

Earlier guidelines under Part (B) Permitted Transactions of Annex-I Revised guidelines under Part (B) Permitted Transactions of Annex-I
Drawing Arrangements with Exchange Houses are primarily designed to channel inward personal remittances. Under no circumstances, donations/contributions to charitable institutions should be routed through the Exchange Houses. The following is the list of permissible transactions under Drawing Arrangements with Exchange Houses.1. Credit to Non-resident (External) Rupee accounts maintained by Non-resident Indians in Indian Rupees.2. Payments to families of Non-resident Indians.

3. Payments in favour of Insurance companies, Mutual Funds and the Post Master for premia/investments.

4. Payments in favour of bankers for investments in shares, debentures.

5. Payment to Coop. Housing Societies, Govt. Housing Schemes or Estate Developers for acquisition of residential flats in India in individual names subject to compliance of regulations thereof by the Non-resident Indians.

6. Payments of tuition/boarding, examination fee etc. to schools, colleges and other educational institutions.

7. Payments to medical institutions and hospitals for medical treatment of NRIs/their dependents and nationals of Gulf Countries in India.

8. Payments to hotels by nationals of Gulf countries/NRIs for their stay.

9. Payments to travel agents for booking of passages of NRIs and their families residing in India towards their travel in India by domestic airlines/rail, etc.

10. Trade transactions up to Rs. 2 lakhs per transaction.

Drawing Arrangements with Exchange Houses are primarily designed to channel inward personal remittances. Under no circumstances, donations/contributions to charitable institutions should be routed through the Exchange Houses. The following is the list of permissible transactions under Drawing Arrangements with Exchange Houses.1. Credit to Non-resident (External) Rupee accounts maintained by Non-resident Indians in Indian Rupees.2. Payments to families of Non-resident Indians.

3. Payments in favour of Insurance companies, Mutual Funds and the Post Master for premia/ investments.

4. Payments in favour of bankers for investments in shares, debentures.

5. Payment to Coop. Housing Societies, Govt. Housing Schemes or Estate Developers for acquisition of residential flats in India in individual names subject to compliance of regulations thereof by the Non-resident Indians.

6. Payments of tuition/ boarding, examination fee etc. to schools, colleges and other educational institutions.

7. Payments to medical institutions and hospitals for medical treatment of NRIs/their dependents and nationals of Gulf Countries in India.

8. Payments to hotels by nationals of Gulf countries/NRIs for their stay.

9. Payments to travel agents for booking of passages of NRIs and their families residing in India towards their travel in India by domestic airlines/rail, etc.

10. Trade transactions up to Rs. 2 lakhs per transaction.

11. Payments to utility service providers in India, for services such as water supply, electricity supply, telephone (except for mobile top-ups), internet, television etc.

12. Tax payments in India

13. EMI payments in India to Banks and Non-Banking Financial Companies (NBFCs) for repayment of loans

 

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