Attention of Authorized Dealers (ADs) is invited towards card-based transactions conducted by their customers, involving cross-border payments.
2. It has been observed that individuals are using their debit/credit cards for cross-border transactions, which are of commercial nature and are not aligned with their personal needs as well as their risk profile. In order to ensure judicious use of cards, including virtual cards, it has been decided to place an annual limit of USD 30,000 per individual on card based cross-border transactions. For the purpose of this circular, the year will start from November 1, however, limit for the current year will be calculated from the date of issuance of this circular. This limit would be applicable for an individual across the banking industry.
3. ADs are advised to conduct proper due diligence of the individual customers at the time of their onboarding/ update of risk profiles and duly incorporate their cross-border payment needs through cards in their profiles. ADs are advised to ensure that issuance of multiple cards to a single customer are commensurate with their risk profile and are monitored collectively. Further, ADs should only allow those card based cross-border transactions, which are in-sync with the personal needs of the customers and have no commercial purpose.
4. Although, it is the primary responsibility of a customer to ensure that his/ her annual limit is not breached at any time, ADs shall institute a mechanism of ongoing monitoring whereby card based cross-border payments by individuals through single/multiple cards are only allowed in accordance with the limit prescribed above and as per the risk profile of the customer.
5. ADs desirous to facilitate their business customers may issue corporate cards, to be used strictly in accordance with the applicable provisions of the Foreign Exchange Manual and the profile of the customer. ADs shall institute a robust mechanism to monitor the payments through such corporate cards.
6. Besides, ADs are advised to run an awareness campaign to inform their customers about the contents of this circular and the fact that cross-border commercial payments through cards issued to individuals are not permissible.
7. ADs are advised to ensure meticulous compliance of these instructions and bring the same to the notice of all their constituents. Any non-compliance of above instructions may be dealt with under relevant provisions of the Foreign Exchange Regulation Act, 1947 and any pecuniary or administrative action, as deemed necessary, may be initiated against the delinquent ADs.