Tag Archives: liberalisation

inter-bank transactions

RBI circular dated 6th January, 2020 permitting AD category 1 banks to undertake customer and inter bank transactions beyond onshore market hours.

Attention of Authorised Dealers (ADs) is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 notified vide Notification No. FEMA.25/RB-2000 dated May 3, 2000) issued under clause (h) of sub-section (2) of Section 47 of FEMA, 1999 (Act 42 of 1999), as amended from time to time and the Master Direction- Risk Management and Inter-bank Dealing dated July 05, 2016, as amended from time to time.

2. As announced in the Statement of Developmental and Regulatory Policies dated October 04, 2019 it has been decided to accept the recommendation of the Task Force on Offshore Rupee Market to permit AD Cat-I banks to offer foreign exchange prices to users at all times, out of their Indian books, either by a domestic sales team or through their overseas branches.

3. Accordingly, the following section is being added in Part C (Inter-Bank Foreign Exchange Dealings) of the Master Direction- Risk Management and Inter-Bank Dealings:

“6. Customer and inter-bank transactions beyond onshore market hours

Authorised dealers may undertake customer (persons resident in India and persons resident outside India) and inter-bank transactions beyond onshore market hours. Transactions with persons resident outside India, through their foreign branches and subsidiaries may also be undertaken beyond onshore market hours.”

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

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Non-residents allowed to carry upto Rs.10K upto DFA/SHA

RBI has vide its circular http://rbi.org.in/Scripts/NotificationUser.aspx?Id=8417&Mode=0 allowed non residents to carry with them upto Rs.10,000 in cash beyond the immigration counter upto the Duty Free Area/ Security Hold Area in order to avail of any cash purchases at the duty free shops at the international airports. But they should dispose of the Indian currency while entering the SHA since Indian rupees are not allowed to be taken abroad, reason being Indian rupees are not yet fully convertible. Foreign exchange counters are being established in the departure halls in international airports in order to provide facility to travellers to sell their unspent Indian currency to the dealers and in turn buy foreign currency.  

Vide another circular http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=29588 the RBI has clarified that this is not a form of restriction but of liberalisation considering the requests made from travellers to be allowed to carry Indian rupees beyond the immigration counter in order to make their purchase in rupees at the duty free shops. 


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