PREFACE

In this 50th year of independence we are pleased to present thisCitizen’s Charter. The Charter is aimed at informing the citizens theprocedures to be followed in making applications relating to exchangecontrol matters.

During the last few years the Exchange Control Regulations havebeen simplified and made transparent. India has now attained ArticleVIII status of International Monetary Fund. Consequently regulationsgoverning all outward remittances for bonafide current accounttransactions have been liberalised. Extensive powers have been delegatedto banks authorised to deal in foreign exchange known as authoriseddealers and practically, foreign exchange for all transactions of currentnature can be made available by authorised dealers without requiringthe approval of the Reserve Bank. Every effort is made by the Departmentto deal with the applications which are still required to be referred toReserve Bank, promptly, with a view to rendering satisfactory customerservice.

We are confident that the booklet will be useful to the citizens. Wealso look forward to valuable suggestions from citizens to help us servebetter.

Khizer Ahmed

23.02.1998Reserve Bank of IndiaExchange Control DepartmentCentral OfficeMumbai

Chief General Manager

CHAPTER I

Functions of the Department

The basic function of the Department is to administer the provisionsof the Foreign Exchange Regulation Act 1973 (as amended by the ForeignExchange Regulation (Amendment) Act, 1993), for the conservation offoreign exchange resources of the country and the proper utilisationthereof in the interest of economic development of the country. TheDepartment regulates the transactions which come under the purview ofthe provisions of the Foreign Exchange Regulation Act, 1973 in general,and those having international financial implications. Some of the majormatters regulated/handled by the Exchange Control Department are asunder :-

a) issuing licences to authorised dealers/money changers.

b) purchase/sale of and other dealings in foreign exchange andmaintenance of balances at foreign centres.

4 procedure for realisation of exports.

.4 Payments to non-residents or to their accounts in India.

e) transfer of securities between residents and non-residents, betweentwo non-residents and acquisition and holding of foreign securities.

f ) export and import of currency cheques, drafts, travellers cheques,securities and other financial instruments.

g> activities in India of branches of foreign firms/companies andforeign nationals.

h) foreign direct investment, portfolio investment, investment byNon-Residents of Indian nationaity/origin and corporate bodiespredominently owned by such persons.

9 setting up of joint ventures/subsidiaries abroad by Indiancompanies.

j) acquisition, holding and disposal of immovable property in Indiaby foreign nationals and foreign companies. Holding and disposalof immovable property abroad by residents in India.

CHAPTER II

Organisation of the Exchange Control Department

2.1 The Central Office of the Department which is mainly concernedwith laying down the policies and procedures is situated inMumbai. All communications to Central Office should be ad-dressed to :

The Chief General ManagerReserve Bank of IndiaExchange Control department, Central OfficeCentral Office BuildingShahid Bhagat Singh Marg,Mumbai 400 001.

2.2 The Department has 16 Regional Offices and two cells. Theaddresses and jurisdiction of these offices/cells are as under-

Office Address Jurisdiction

Ahmedabad Navjivan Post Office, State of GujaratAshram Road, I? B. No.1,Ahmedabad-380 014

Bangalore 10-3-8, Nrupathunga State of KarnatakaRoad, I?. B. No. 6768,Bangalore- 002.

Bhopal Hoshangabad Road, State of Madhyal? B. No. 32,Bhopal-462 011.

Bhubaneswar Pt. Jawaharlal Nehru State of OrissaMarg, I? B. No.16,Bhubaneswar-753 001.

4

Calcutta 15,Netaji Subhas Road, States of Sikkim andI? B. No.552, West Bangal andCalcutta-700 001. Union Territory of Andaman

and Nicobar Islands

Chandigarh Opp. Telephone Bhavan, States of HaryanaSector 17, (excluding theChandigarh-160 017. districts of Faridabad,

Gurgaon and Sonepat),Himachal Pradesh andPunjab and Union erritoryof Chandigarh.

Chennai Fort Glacis, Rajaji Road, State of Tamil Nadu andP.B. No, 40, Union Territory ofChennai-600 001. Pondicherry

Kochi Ernakulam North, State of Kerala and UnionI?B. No. 3605, Territory of LakshadweepKochi- 018.

Guwahati Station Road, Panbazar, States of Arunachal Pradesh,P.B. No.120, Assam, Manipur,Guwahati-781 001. Meghalaya, Mizoram,

Nagaland and Tripura.

Hyderabad 6-l-56, Saifabad, State of Andhra PradeshSecretariat Road,P.B. No. 31,Hyderabad-500 004.

Jaipur II Floor, Tonk Road, State of RajasthanNear Rambagh Circle,I’.B.No. 12, Jaipur302 004.

5

Kanpur MSG. Road, l?B. No. 82,Kanpur-208 001.

State of Uttar Pradeshexcluding New OkhlaIndustrial DevelopmentArea (NOIDA) in Ghaziabaddistrict.

Mumbai Amar Building, State of Maharashtra, UnionSir P.M. Road, Fort,Mumbai-400 001.

Territory of Dadra andNagar Haveli and UnionTerritory of Daman and Diu

iew Delhi 6, Parliament Street, Union Territory of Delhi,P.B. No. 696, the districts of Faridabad,New Delhi-110 001. Gurgaon and Sonepat of

State of Haryana andNew Okhla IndustrialDevelopment Area(NOIDA) in Ghaziabaddistrict of State of UttarPradesh

Panaji Dada Vaidya Road,Near Hotel Samarat,Panaji (Goa)- 001.

State of Goa

Patna South of Gandhi Maidan, State of BiharI?B. No. 162, Patna-800 001.

Jammu Rail Head Complex, State of Jammu and Kashmir(Cell)

Nagpur

Jammu- 012.

Raghavendra Rao Road, Akola, Amaravati,(Cell) l?B. No. 15,

Nagpur-440 001Bhandara, Buldhana,Chandrapur, Gadchiroli,Nagpur, Vardha, Yeotmaldistricts of Maharashtra

6

Note :- The Exchange Control Cell at Nagpur deals with only mattersrelating to foreign travel and sundry remittances. All other matters arehandled by the Mumbai Regional Office.

2.3 Generally, all applications for matters relating to Exchange Control(except where the applications are required to be addressedspecifically to Central Office of the Department) have to beforwarded to the concerned Regional Office of the Departmentunder whose jurisdiction the applicant is residing through abranch of an authorised dealer in foreign exchange.

7

Guide to Citizens

3.1 Extensive powers have been delegated to authorised dealers toallow remittances for various purposes without requiring theapproval of Reserve Bank of India. An illustrative list of areaswhere exchange facilities can be allowed by authorised dealersunder delegated powers is given below :-

a> Release of exchange under Basic Travel Quota,

b) Release of exchange for travel abroad for various purposessuch as business, studies, participation in conferences/seminars, study tours, specialised training, employment,emigration, medical treatment/check-up, participation inoverseas exhibitions/trade fairs.

4 Remittance towards gifts/donations/royalty on books/computer software, sundry remittances, cost of ElectronicData base training/coaching expenses for export activities,advertisement in print media.

4 Remittance for initial/maintenance expenses of overseasoffices.

e> Remittances connected with exports such as claims,commission, legal expenses controlling charges etc.

f 1 Remittances for imports including advance payments uptocertain ceilings.

9) Remittance of dividends/interest.

h) Remittance towards engagement of foreign nationals.i> Remittance of surplus freight/passage collections by foreign

airline/shipping companies etc.

3.2 The cases which are beyond the powers delegated to authoriseddealers are considered by the Reserve Bank of India. The proformafor applications for various purposes have been incorporated inVolume II of Exchange Control Manual. In cases where applicationshave not been prescribed, the applicants may apply on a simpleletter giving the full facts of the case.

8

jnsequent delegation3.3 Sincethe simplification of procedures and cc 1 yof powers to authorised dealers is an on-going process, the citizensmay first approach the authorised dealers for guidance on mattersrelating to Exchange Control.

3.4 The citizens needing any clarification/guidance on any matterrelating to Exchange Control may approach the Enquiry Sectionattached to the office during the visiting hours which have beendisplayed in the respective Offices. In the case of need they mayalso approach the General Manager’/Deputy General Manager/Assistant General Manager holding the charge of the concernedRegional Office.

3.5 A Complaint Redressal Cell has been set up in the Central Office ofthe Bank to attend to the complaints emanating from the membersof the public. This Cell functions under the overall charge of anExecutive Director. The complaints may be addressed to :-

The Chief General ManagerReserve Bank of IndiaDepartment of Government & Bank AccountsComplaint Redressal Cell3rd Floor, Marshall Building Annexe,Shoorji Vallabhdas Marg,Fort, Mumbai-400 038.

Similar cells have also been set up in different offices of theReserve.Bank which function under the Chief General Manager/GeneralManager i.e. the Officer-in-Charge of the office concerned. -

3.6 Complaint/suggestion boxes have also been provided at theCentral Office as well as the Regional Offices of the Department.

3.7 A time schedule prescribed for disposal of various applications ofrepetitive nature received in the Department is given in theAnnexure.

9

CHAPTER IV

Publications

4.1 The Department has brought out Exchange Control Manual whichis compendium of various statutory directions, administrativeinstructions, explanatory notes issued by the Reserve Bank fromtime to time in connection with administration of ExchangeControl. The Exchange Control Manual is also available in theform of computer floppy

4.2 The directions to Full-Fledged/Restricted Money Changers, LifeInsurance Corporation, General Insurance Corporation and itssubsidiaries, etc. in the matter of their respective business activitieshave been incorporated in separate Memoranda.

4 .3 The copies of Exchange Control Manual/Memoranda are availablefor sale to General Public with

The DirectorDepartment of Economic Analysis and PolicyDivision of Reports, Reviews & Publications (Sales Section)Reserve Bank of IndiaAmar Building, Ground FloorSir l? M. Road, Fort, Mumbai 450 001.

The amendments to the Exchange Control Manual and Memorandaare notified through A. D. Circulars issued by the Department from time

.e Sales

4 .4 The list of such paid publications brought out by the Departmentis as under :- \

15

Publication Date of PricePublication

0 Exchange Control January 1996 Rs. 400.00Manual, 1993 US$40( V o l . I & II)

ii) F L M July 1997 Rs. 20.00(Memorandum ofinstructions to Full-Fledeed Monev

iii) R L M July 1995 Rs. 20.00(Memorandum ofInstructions toRestricted MoneyChangers)

iv ) PEM May 1997 Rs. 40.00(Memorandum ofInstructions onProject and ServiceExports)

4.5 The Department has brought out the following publications on thetopics of interest to the members of public.

Publication Year of PricePublication

Facilities for Non- June 1996 Rs. 2500Resident Indians US$6

1 1

Exchange Facilitiesfor Resident Indians

January 1997 Rs. 15.00

Exchange Facilitiesfor Foreign Travel

July 1996 Rs. 8.00

4.6 In addition to the above, as a measure of customer education theDepartment has brought out booklets/pamphlets on the followingsubjects indicating briefly the regulations and procedure relevantto the subject for information of its customers which are availablefree of cost.

Exchange Control Regulations for ExportsFacilities for Returning IndiansProject ExportsPayment Procedures : Exports to RussianFederationForeign Exchange Facilities forStudies Abroad

November 1995November 1995December 1995

Facilities to Non-Residents : ImmovableProperty in IndiaBank Deposit Schemes for Non-residentIndians

December 1995

August 1996

September 1996

September 1996

ANNEXURE

Time limit for disposal of applicationsreceived in Exchange Control Department

Type of applications Maximum no. ofworking days for

disposal of applications

TRAVEL

References relating to releaseof exchange for travel abroad forvarious purposes.

3

EXPORTS

1 . Approval/Counter-signature of GR/PP 3forms in respect of caution-listed exporters

2. General permission for waiving GR form 5formalities for exports

3 . Extension of time limit for realisation of 5export proceeds

4. Approval for direct despatch of shipping 5documents to the consignees/their agents(in case where powers are not delegated toauthorised dealers)

5 . Refund of advance payments received 3against exports

6 . Export of goods for display in exhibitions/ 3trade fairs abroad

13

3

8, Approval for payment terms inrespect of Project Exports

I M P O R T S

3

1 . Hiring/leasing of aircrafts/ships 7

2 . Advance remittance for imports 3

3 . Issue of code number for opening of ?diplomatic bond store account

4 . Applications for -

{a) Permission for facility for >import into bond )

( b ) Permission for import of )shipstores 3

(c) Remittance/opening of letters of )credit for import into bond )

5 . Hiring of transponders 3

M I S C E L L A N E O U S

1 . Release of exchange against inward 1remittances

32 . Release of exchange on repatriation basis

3 . Issue of Money-changer’s licence 5

4 . Approval for issue of shares to foreign 3collaborators

14

5 . Remittance of retirement benefitsto expatriate staff

6 . Demurrage charges

FOREIGN INVESTMENT IN INDIA

1 . Foreign Direct Investmentunder automatic route

15

3 . Foreign Technical Collaboration

4 . Disinvestment of shares by 1foreign investors

2 . NRI Investment 15

15

5

E X T E R N A L C O M M E R C I A L B O R R O W I N G S

1 . Short term

2 . US $3 Million Scheme

INDIAN INVESTMENT ABROAD

7

7

1 . Investment in overseas Joint Ventures & WhollyOwned Subsidiaries under fast track route

21

2 . Investment in overseas joint ventures/whollyowned subsidiaries (not covered by automaticroute)

60

3 . GR approval for exports to Indian Joint 3Ventures abroad against equity participation

4 . Issue of licences to Indian companies for holding 3shares in Joint Ventures/Subsidiaries abroad

15

5 . Issue of licence for export of share certificate/s 3

6 . Disinvestments of shares in overseasJoint Ventures/Subsidiaries

1.5--

Notes :-

3 The number of davs mentioned above exrll~d~ the rim nf,

submission of application.J --

ii) The maximum number of days for disposal of cases indicatedabove are applicable provided the applications are completein all respects.

iii) The above time schedule is not applicable in cases whichrequire reference to Government and other agencies.