The Head Offices/Principal Offices of all
Authorized Dealers In Foreign Exchange

Dear Sirs,

Borrowings by Individual Foreign Nationals

In terms of para 5 Chapter XIX of FE Manual (8th Edition-2002), Authorised Dealers have general permission to grant Rupee loans/overdrafts to foreign nationals upto the extent of their two months salary. Requests for advances in excess of this are, however, referred to the State Bank.

2. Now, with a view to further liberalizing the foreign exchange regime, it has been decided to allow Authorised Dealers to grant Rupee loans/overdrafts to foreign nationals upto the extent of their requirements observing the relevant Prudential Regulations. Consequently, Para 5, Chapter XIX of FE Manual (8th Edition-2002) may be replaced with the following:

‘Authorised Dealers have general permission to grant Rupee loans/overdrafts to foreign nationals upto the extent of their requirement subject to the observance of relevant Prudential Regulations’.

Please bring the above to the notice of your branches and other constituents.