CHAPTER X
INWARD
AND OUTWARD REMITTANCES
-
Inward Remittances.
-
Inward
Remittance - No Restrictions.
-
Outward
Remittances.
-
Mode
of Remittances.
-
Prescribed
Application Forms.
-
Applications
by Letters.
-
Applications
to be submitted to the State Bank only through an Authorised
Dealer.
-
Forwarding
Applications to the State Bank.
-
Processing
of Approved Form etc.
-
Permits
for Recurring Remittances.
-
Effecting
Remittances against Permits.
-
Period
of validity of approval by the State Bank.
-
Release
of Foreign Exchange for Travel Abroad.
-
Processing
of Approvals given on one Authorised Dealer's Form by another
Authorised Dealer.
-
Reporting
of Remittances.
-
Cancellation
of Outward Remittances.
-
Cancellation
of Inward Remittances.
-
Utilisation
of Exchange for the purpose it is obtained.
1.
Inward Remittances.
The
term 'inward remittance" means purchase of foreign currencies
in whatever form and includes not only remittances by M.T., T.T.,
draft etc., but also purchase of travellers cheques, drafts under
travellers letters of credit, bills of exchange, currency notes
and coins etc. Debit to banks' non-resident Rupee accounts also
constitutes an inward remittance. This chapter, however, does
not cover purchase of foreign currency notes and coins which is
dealt with in Chapter
XI.
2.
Inward Remittance – No Restrictions.
There
is no restriction on receipt of remittances from abroad either
in foreign currency or by debit to non-resident Rupee accounts
of banks' overseas branches or correspondents. Authorised Dealers
may freely purchase T.Ts, M.Ts, drafts, bills etc., expressed
and payable in foreign currencies or drawn in Rupees on banks'
non-resident Rupee accounts. There is also no objection to their
obtaining reimbursement in foreign currency from their overseas
branches and correspondents in respect of Rupee bills and drafts
which are purchased by them under letters of credit opened by
non-resident banks or under other arrangements.
3.
Outward Remittances.
The
term "outward remittance" means sale of foreign exchange
in any form and includes not only remittances by T.Ts, M.Ts, drafts
etc., but also sale of travellers cheques, travellers letters
of credit, foreign currency notes and coins etc. Outward remittance
can be made either by sale of foreign exchange or by credit to
non-resident Rupee account of banks' overseas branches or correspondents.
Authorised Dealers may sell foreign exchange for approved transactions
only in accordance with the procedure outlined in this chapter.
This chapter does not cover sale of foreign currency notes and
coins which is dealt with in Chapter
XI.
4.
Mode of Remittances.
Authorised
Dealers should normally avoid issuing drafts in cover of outward
remittances whenever remittance can be made by T.Ts, or M.Ts,
etc. Where, however, the normal means of transfer is likely to
result in unnecessary hardship or inconvenience to the remitter,
drafts may be issued in the name of the beneficiaries of the remittance
but such drafts should be crossed by the issuing bank as "Account
Payee only".
5.
Prescribed Application Forms.
(i)
There are three types of application forms for outward
remittances:
(a)
Form
'I' is to cover remittance against imports (Appendix
V-30 )
(b)
Form
'T-1' is to cover sale of exchange for travel (Appendix
V-64)
(c)
Form
'M' is to cover all other remittances (Appendix
V-8)
(ii)
Any person who wishes to purchase foreign exchange must
lodge an application with an Authorised Dealer on the appropriate
prescribed form duly supported by the requisite documents. On
receipt, the application should be examined by the Authorised
Dealer and if the Authorised Dealer is satisfied that the application
is covered by the regulations and it is empowered to approve the
remittance on behalf of the State Bank, it may effect the sale
of foreign exchange. If the transaction requires prior approval
of the State Bank, the application should be forwarded by the
Authorised Dealer to the State Bank for consideration with comments
under its stamp and signature.
6.
Applications by Letters.
In
some cases, applications are made by letters as it becomes difficult
for the applicants to fully describe on the prescribed application
form the purpose of purchase of foreign exchange particularly
for travel abroad and for purposes other than
import. In all such cases, letters should be accompanied
by Form 'T-1'
or 'M'
as the case may be, duly filled in. If the remittance is permissible,
the State Bank will return the form duly approved. In cases where
remittance is required to be made in installments at periodical
intervals, the State Bank may issue special permits authorising
remittances in the desired manner.
7.
Applications to be submitted to the State Bank only through
an Authorised Dealer.
All
applications for foreign exchange should be forwarded to the State
Bank through Authorised Dealers who should arrange their delivery
to the State Bank through their own messengers or through post.
All applicants who present their applications directly to the
State Bank will be asked to resubmit them through an Authorised
Dealer.
8.
Forwarding Applications to the State Bank.
When
submitting applications to the State Bank, Authorised Dealers
should take all reasonable precautions to satisfy themselves as
to the bonafides of the applicants. They should verify that the
application form has been duly completed and signed by the applicant
and then affix their stamp and signature thereon in token of their
having examined the application and of having satisfied themselves
that to the best of their knowledge and belief, the statements
made in the form are correct and that full documentary evidence
as required has been submitted. In this connection, reference
is also invited to para
6 of Chapter 1. The applicant should also be advised
that under Section 22 of the Act, it is an offence to give any
information or make any statement which he knows or has reasonable
cause to believe to be false or not true in any material particular.
9.
Processing of Approved Form etc.
After
receipt of approved forms or permits etc., from the State Bank,
Authorised Dealers should see that the forms etc., have been approved
by the authorised officers of the State Bank and that they bear
its embossing seal. Authorisations which are signed by officers
whose specimen signatures are not available with the Authorised
Dealer, should be presented to the nearest office of the State
Bank for authentication. It is also important that once a form
has been approved by or on behalf of the State Bank, the Authorised
Dealer should effect remittance only on behalf of the original
applicant for whom the form has been approved and in favour of
the beneficiary whose name appears in the approval. They must
in no case accept instructions from third parties. In those cases
where Authorised Dealers are empowered under the instructions
laid down in this Manual to approve applications on behalf of
the State Bank, they should ensure while approving the form that
the applications are complete in all respects and that all the
necessary documentary or other evidence as required has been submitted
to and examined by them and that they have satisfied themselves
as to the genuinness of the transaction.
10.
Permits for Recurring Remittances.
(i)
Permits (Appendix
V-9) issued by the State Bank are of three types. In
the first type of permits, the State Bank authorises remittances
upto a stated amount within a stated period which an Authorised
Dealer may make on behalf of the permit holder. Remittances under
such permits may be made during the period of validity of the
permit in amounts as required by the applicant provided that the
total of such remittances under the permit does not exceed the
overall limit laid down in the permit.
(ii)
The second type of permits covers
remittances on a periodical (monthly) basis but the periodical
(monthly) limits are not cumulative and remittances in all during
any one period (month) must not exceed the prescribed rate laid
down in the permit. If remittances are not made upto the full
extent of the limit in any period (month), it is not permissible
to carry forward unutilised balance in order to make larger remittances
in subsequent periods.
(iii)
The
third type of permits allows remittances on a periodical (monthly)
basis but the periodical (monthly) amount is sanctioned on a cumulative
basis so that unutilised amounts for earlier periods (months)
can be remitted in subsequent periods (months). Unutilised amounts
may, however, be accumulated only within the validity of the permit
and the entire unutilised balance of such permits will lapse after
the last day of the validity of the permit. In such cases it is
not permissible to make remittances in advance of the entitlements
of the subsequent periods (months).
(iv)
Requests for utilisation of lapsed quotas should be forwarded
by Authorised Dealers to the State Bank giving full reasons for
non-utilisation on due dates supported by suitable documentary
evidence, wherever available.
11.
Effecting Remittances against Permits.
In
all cases where permits are issued by the State Bank, it will
be in order for the Authorised Dealers to effect remittances against
the permits subject to report on form
'M'. Authorised Dealers must state on form
'M' the number of the permit against which the remittance
has been made and also certify that the remittance has been endorsed
on the permit. The remittance must be endorsed on the reverse
of the permit giving the amount and date of remittance under their
stamp and signature. When the permit is exhausted, it should be
returned to the State Bank by the Authorised Dealers alongwith
the form
'M' on which the last remittance is reported. In all
cases where the purpose for which the permit was granted ceases
to exist and no further remittances are required or are permissible,
the unutilised permit should be returned to the State Bank with
an advice that the permit should be cancelled.
All
Authorisations given by the State Bank are valid for a period
not exceeding 30 days from the date of approval unless they are
expressly approved as valid for a specified longer period or unless
they have been revalidated for a further period. Similarly, permits
issued by the State Bank are also valid for specified periods
as stated on the permit. Authorised Dealers should not effect
any remittance against approved forms, permits etc., which have
been lapsed unless they have been duly revalidated.
13.
Release of Foreign Exchange for Travel Abroad.
Foreign
exchange is issued to the travellers against specific or general
approval given by the State Bank. It may be drawn in any foreign
currency equivalent to the sanctioned amount exclusively in the
forms specified in paragraph 44 of Chapter XVII. In cases where
a traveller desires to draw foreign exchange partly in foreign
currency instruments and partly in foreign currency notes, Authorised
Dealers will prepare two separate 'T-1'
forms. In the portion meant for their certificate,
the Authorised Dealers will give on both the 'T-1'
forms a suitable indication as to the amounts of foreign
exchange released in foreign currency instruments and notes. The
'T-1'
forms will be attached with Schedules
E-3 annexed to Summary Statements
S-1 and S-6.
In the case of sale of foreign exchange partly in foreign currency
instruments and partly in foreign currency notes against specific
approval issued by the State Bank, a photocopy of the State Bank's
sanction will also be made. Authorised Dealers will give a suitable
indication to this effect, both on the original sanction as well
as its photocopy which will be attached with the relative 'T-1'
forms and surrendered to the State Bank alongwith the
monthly returns of foreign exchange transactions.
14. Processing of Approvals given on one Authorised Dealer’s
Form by another Authorised Dealer.
There
may be instances where a traveller or a remitter might approach
an Authorised Dealer for issue/remittance of foreign exchange
against approved form 'T-1'
or 'M'
bearing the identifying prefix and serial number of another Authorised
Dealer. While releasing/remitting foreign exchange against such
form 'T-1'
or 'M',
Authorised Dealers should insert their own identifying prefix
and serial number borne on one of the blank 'T-1'
or 'M'
forms in their possession, and score out the prefix and serial
number already appearing on approved form 'T-1'
or 'M'
under proper authentication. The Authorised Dealers should, however,
destroy that blank form 'T-1'
or 'M'
whose serial number is so inserted by them.
15.
Reporting of Remittances.
Authorised
Dealers should submit to the State Bank alongwith the appropriate
returns as laid down in Chapter
XXII, forms ‘M’,
‘T’-1
and 'I'
as the case may be, in cover of each remittance effected by them.
Where remittances are approved by the State Bank, the approved
forms should be submitted in original. Where approval is given
by the State Bank by letter or through issue of permit, particulars
of the letter or of the permit should be given on the appropriate
form before submitting it to the State Bank with the returns.
16.
Cancellation of Outward Remittances.
In
the event of any outward remittance which has already been reported
to the State Bank being subsequently cancelled, either in full
or in part, Authorised Dealers must report the cancellation of
the outward remittance as an inward remittance. The return in
which the reversal of the transaction is reported should be supported
by a letter giving the following particulars:
(a)
The date of the return in which the outward remittance
was reported.
(b)
The name and address of the applicant.
(c)
The amount of the sale as effected originally.
(d)
The amount cancelled.
(e)
Reasons for cancellation.
17.
Cancellation of Inward Remittances.
In
the event of any inward remittance which has already been reported
to the State Bank, being subsequently cancelled either in full
or in part, because of non-availability of the beneficiary, Authorised
Dealers must report the cancellation of the inward remittance
as an outward remittance on form 'M'.
The return in which the reversal of the transaction is reported
should be supported by a letter giving the following particulars:
(a)
The date of the return in which the inward remittance was
reported.
(b)
The name and address of the beneficiary.
(c)
The amount of the purchase as effected originally.
(d)
The amount cancelled.
(e)
Reasons for cancellation.
18.
Utilisation of Exchange for the purpose it is obtained.
Where
any foreign exchange is acquired by any person other than an Authorised
Dealer for any particular purpose or where any person has been
permitted conditionally to acquire foreign exchange, the said
person will not use the foreign exchange so acquired otherwise
than for that purpose or fail to comply with the prescribed conditions.
In cases where the foreign exchange so acquired cannot be used
in full or in part for the purpose for which it was acquired or
any of the conditions subject to which the foreign exchange was
released cannot be complied with, the foreign exchange should
immediately be surrendered to an Authorised Dealer.