Summary of Important Recent Circulars from RBI in August 2008

September 26, 2008
2 mins read

A.P. (DIR Series) Circular No. 5 dated August 6, 2008.
Guidelines on trading of Currency Futures in Recognised Stock/New Exchanges

This circular permits persons resident in India to participate in the currency futures market in India subject to the RBI guidelines contained in the Currency Futures (Reserve Bank Directions, 2008). The said guidelines are annexed to this circular. The currency futures must be traded on recognised stock exchanges / new exchanges, recognised by SEBI.

A.P. (DIR Series) Circular No. 6 dated August 13, 2008.
Export of Goods and Services — Direct Dispatch of Shipping Documents, Realisation and Repatriation of Export Proceeds — Liberalisation

This circular, subject to certain conditions, permits an exporter to dispatch shipping documents, up to US $ 1 million or its equivalent per export consignment, directly to the consignee or his agent resident in the country of final destination of goods, provided:
a. The export proceeds have been realised in full.
b. The exporter is a regular customer of the bank for a period of at least six months.
c. The exporter’s account with the bank is fully compliant with Reserve Bank’s extant KYC / AML guidelines.
d. The bank is satisfied about the bonafides of the transaction.

Press Note 7 (2008) No. 5(10)/2006-FC dated June 16, 2008.
Consolidated policy on Foreign Direct Investment

This Press Note contains a summary of the FDI Policy and regulations applicable to various sectors and activities. The Press Note has incorporated policy changes up to March 31, 2008.

A.P. (DIR Series) Circular No. 7 dated August 13, 2008.
Overseas Direct Investment by Registered Trust / Society

This circular permits Registered Trusts and Societies that have setup hospital(s) in India to make investment in the same sector(s), after obtaining prior approval of RBI, by way of Joint Venture or Wholly Owned Subsidiary outside India. Application for permission has to be made in Form ODI.

A.P. (DIR Series) Circular No. 9 dated August 21, 2008.
Foreign Exchange Management Act, 1999 — Advance Remittance for import of Goods — Liberalisation

Presently, importers (other than a Public Sector Company or a Department / Undertaking of the Government of India) are permitted to make advance remittance up to US $ 1,000,000 or its equivalent. This circular has enhanced this limit of US $ 1,000,000 with immediate effect to US $ 5,000,000 or its equivalent, subject to satisfaction of / compliance with certain conditions.

A.P. (DIR Series) Circular No. 12 dated August 28, 2008.
Foreign Exchange Management Act, 1999 — Import of Platinum / Palladium / Rhodium / Silver

Presently, importers of Platinum / Palladium / Rhodium / Silver can avail Suppliers’ and Buyers’ credit (trade credit) up to US $ 20 million per import transaction with a maturity period of up to one year from the date of shipment. This circular provides that with immediate effect importers of Platinum/ Palladium / Rhodium / Silver cannot avail Suppliers’ and Buyers’ credit, including the usance period of Letters of Credit, exceeding 90 days.

A.P. (DIR Series) Circular No. 13 dated September 1, 2008.
Direct Receipt of Import Bills / Documents — Liberalisation

Presently, importers can make remittances up to US $ 100,000 to overseas suppliers even when import bills / documents are directly received by them. This circular has, subject to certain terms and conditions increased this limit of US $ 100,000 to US $ 300,000.


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