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FOREIGN EXCHANGE MANAGEMENT (PERMISSIBLE CAPITAL ACCOUNT TRANSACTIONS)
REGULATIONS, 2000
Notification
No. 1 dated 3rd May 2000
GSR
384 (E), dated 3.5.2000: In exercise of the powers conferred by
sub-section (2) of section 6, sub-section (2) of section 47 of the Foreign
Exchange Management Act, 1999(42 of 1999), the Reserve Bank of India makes, in
consultation with the Central Government following regulations relating to
capital account transactions namely:
(i)
These Regulations may be called the �Foreign Exchange Management
(Permissible Capital Account Transactions) Regulations, 2000�.
(ii)
They shall come into force on the 1st day of June 2000.
In
these Regulations, unless the context requires otherwise,
-
(a)
�Act � means the Foreign Exchange Management Act, 1999 (42 of 1999);
(b)
�Drawal �means drawal of foreign exchange from an authorised person
and includes opening of letter of credit or use of International credit card or
International debit card or ATM card or any other thing by whatever name called
which has the effect of creating foreign exchange liability;
(c)
�Schedule� means a schedule to these Regulations;
(d)
�Transferable Development Rights� means certificates issued in
respect of category of land acquired for public purpose either by Central or
State Government in consideration of surrender of land by the owner without
monetary compensation, which are transferable in part or whole;
(e)
The words and expressions used but not defined in these Regulations shall
have the same meanings respectively assigned to them in the Act.
(1)
Capital account transactions of a person may be classified under the
following heads, namely: -
(A) transactions,
specified in Schedule I, of a person resident in India;
(B) transactions,
specified in Schedule II, of a person resident outside India.
(2)
Subject to the provisions of the Act or the rules or regulations or
direction or orders made or issued thereunder, any person may sell or draw
foreign exchange to or from an authorised person for a capital account
transaction specified in the Schedules:
Provided
that the transaction is within the limit, if any, specified in the regulations
relevant to the transaction.
Save
as otherwise provided in the Act, rules or regulations made thereunder,
(a)
no person shall undertake or sell or draw foreign exchange to or from an
authorised person for any capital account transaction,
(b)
no person resident outside India shall make investment in India, in any
form, in any company or partnership firm or proprietary concern or any entity,
whether incorporated or not, which is engaged or proposes to engage-
(i)
in the business of chit fund, or
(ii) as
Nidhi company, or
(iii)
in agricultural or plantation activities, or
(iv)
in real estate business, or construction of farm houses, or
(v)
in trading in Transferable Development Rights (TDRs)
Explanation:
For the purpose of this regulation, �real estate business� shall not
include development of townships, construction of residential / commercial
premises, roads or bridges.
The
payment for investment shall be made by remittance from abroad through normal
banking channels or by debit to an account of the investor maintained with an
authorised person in India in accordance with the regulations made by the
Reserve Bank under the Act.
Every
person selling or drawing foreign exchange to or from an authorised person for a
capital account transaction shall furnish to the Reserve Bank, a declaration in
the form and within the time specified in the regulations relevant to the
transaction .
Schedule
I [See Regulation 3 (1) (A)]
Classes
of capital account transactions of persons resident in India
(a)
Investment by a person resident in India foreign securities
(b)
Foreign currency loans raised in India and abroad by a person resident in
India
(c)
Transfer of immovable property outside India by a person resident in
India
(d)
Guarantees issued by a person resident in India in favour of a person
resident outside India
(e)
Exports, import and holding of currency / currency notes
(f)
Loans and overdrafts (borrowings) by a person resident in India from a
person resident outside India
(g)
Maintenance of foreign currency accounts in India and outside India by a
person resident in India
(h)
Taking out of insurance policy by a person resident in India from an
insurance company outside India
(i)
Loans and overdrafts by a person resident in India to a person resident
outside India
(j)
Remittance outside India of capital assets of a person resident in India
(k)
Sale and purchase of foreign exchange derivatives in India and abroad and
commodity derivatives abroad by a person resident in India.
SCHEDULE
II [See Regulation 3(1)(B)]
Classes
of capital account transactions of persons resident outside India
(a)
Investment in India by a person resident outside India, that is to say,
(i)
issue of security by a body corporate or an entity in India and
investment therein by a person resident outside India; and
(ii)
investment by way of contribution by a person resident outside India to
the capital of a firm or a proprietorship concern or an association of persons
in India .
(b)
Acquisition and transfer of immovable property in India by a person
resident out India.
(c)
Guarantee by a person resident outside India in favour of, or on behalf
of, a person resident in India.
(d)
Import and export of currency /currency notes into /from India
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