In respect of the following transactions, prior approval of the Central Bank should be obtained.
The restriction is not applicable if the payment is made out of funds held in Resident Foreign Currency Account or Exchange Earners Foreign Currency Account of the remitter:
1 Gift remittance exceeding USD 5000 per remitter or donor per annum.
2 Donation exceeding USD 5000 per remitter or donor per annum.
3 Release of exchange exceeding USD 10,000 or its equivalent in one calendar year, for one or more private visits to any country (except Nepal and Bhutan).
4 Exchange facilities for emigration exceeding USD 100,000 or amount prescribed by country of emigration.
5 Exchange facilities exceeding USD 100,000 for persons going abroad for employment.
6 Remittance for maintenance of close relatives abroad.
i. Exceeding net salary (after deduction of taxes, contribution to provident fund and other deductions) of a person who is resident but not permanently resident in India and (a) is a citizen of a foreign state other than Pakistan; or (b) is a citizen of India, who is on deputation to the office or branch or subsidiary or joint venture in India of such foreign company.
ii. Exceeding USD 100,000 per year, per recipient, in all other cases.
Release of foreign exchange exceeding USD 25,000 to a person, irrespective of period of stay, for business travel, or attending a Conference of specialized training or for maintenance expenses of a patient going abroad for medical treatment or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment or check-up.
Release of exchange for meeting expenses for medical treatment abroad exceeding the estimate from the doctor in India or hospital or doctor abroad.
Release of exchange for studies abroad exceeding the estimates from the institution abroad or USD 100,000 per academic year, whichever is higher.
Commission per transaction to agents abroad for sale of residential flats or commercial plots in India, exceeding USD 5000 or 5% of the inward remittance whichever is higher.
Remittance exceeding USD 100,000 by an entity in India by way of reimbursement of pre-incorporation expenses.
Remittances exceeding USD 100,000 per project for any consultancy service if procured from outside India.
Remittance for or purchase of trade mark or franchise in India.
Clarifications by the Central Bank
Central Bank clarified that:
The existing procedure to the followed by Indian companies for entering into collaboration arrangements with overseas collaborators would continue.
There would be no restriction regarding receipt of advance payment or back to back letter of credit for merchandising trade transactions.
Approval of Reserve Bank would be required for importers availing of suppliers’ credit beyond 180 days and buyers’ credit irrespective of the period of credit.
Next: Merchant Transactions