MANU/APDR/0009/2016

Ministry : Reserve Bank of India

Department/Board : RBI A.P. DIR (Series)

Circular No. : A. P. (DIR Series) Circular No. 42
                   RBI/2015-2016/307

Date : 04.02.2016

Notification/ Circulars Referred : Notification No. FEMA. 14 /RB -2000, dated 3rd May 2000 MANU/RFEM/0006/2000

Citing Reference:
Notification No. FEMA. 14 /RB -2000, dated 3rd May 2000 MANU/RFEM/0006/2000  Referred

To

All Category - I Authorised Dealer Banks

Madam/ Sir,

Settlement of Export/ Import transactions in currencies not having a direct exchange rate

Attention of Authorised Dealer Category I (AD Category - I) banks is invited to Notification No. FEMA. 14 /RB -2000, dated 3rd May 2000, as amended from time to time, dealing with manner of receipt and payment, in terms of which export proceeds for exports from India and import payments for imports to India may be received / made in any mode in accordance with the directions issued by the Reserve Bank of India to the Authorized Dealers from time to time.

2. To further liberalize the procedure and facilitate settlement of export and import transactions where the invoicing is in a freely convertible currency and the settlement takes place in the currency of the beneficiary, which though convertible, does not have a direct exchange rate, it has been decided that AD Category-I banks may permit settlement of such export and import transactions (excluding those put through the ACU mechanism), subject to conditions as under:

a. Exporter/ Importer shall be a customer of the AD Bank,

b. Signed contract / invoice is in a freely convertible currency,

c. The beneficiary is willing to receive the payment in the currency of beneficiary instead of the original (freely convertible) currency of the invoice........