Foreign Exchange Control Manual, Annexure-II, Use of International Credit Cards.

Annexure II : Use of International Credit Cards
ANNEXURE II

International Credit Cards (ICCs) (Paragraph 8A.2)

1. A. Instructions to card issuing banks or their subsidiaries in India
   
   1. Banks and their subsidiaries may issue International Credit Cards ( ICCs) to residents. They are also free to issue single card valid in India, Nepal and Bhutan as well as other countries provided they have required mechanism in place to segregate rupee transactions (i.e. transactions in India, Nepal and Bhutan) and foreign currency transactions arising out of use of such cards. In such cases, however, the card should bear superscription ' Not valid for payment in Foreign Exchange in Nepal and Bhutan'.
      
   2. The card issuing banks/subsidiaries should invariably obtain an undertaking from the applicant, before issue of ICC, that the utilisation of the card would be strictly in accordance with the Exchange Control Regulations, and in the event of any failure on the part of the cardholder to comply with the regulations, he would be liable for action under the FERA, 1973.
      
   3. The card issuing banks/subsidiaries can accept payments directly from the card holders in Indian rupees towards the settlement of bills/invoices drawn in foreign exchange.
      
   4. Remittances towards settlement/reimbursement of ICC dues should be made through an authorised dealer.
      
   5. The card issuing bank/subsidiary need not insist on submission of documentary evidence like invoice/bills etc. if the remittance involved is less than U.S.$ 250 or its equivalent and the authorised dealer is satisfied about the bonafides of the remitter and the purpose of remittance.
      
   6. In case the amount of claim on account of use of ICC during visits abroad exceeds the applicant's entitlement the card issuing bank/organisation should provide the reimbursement and report the matter to the Regional Office of the Exchange Control Department giving full details. However, under no circumstances reimbursement should be delayed or refused on the grounds of excess drawing .
      
   7. ICC can also be issued to software engineers going abroad on software assignments provided the claims for such cards are met out of the foreign currency accounts of the engineers concerned or from EEFC balances of their employer in India.
      
   8. ICCs should not be issued to residents going abroad on employment and/or emigration.
      
      
2. Conditions governing the use of ICCs
   
   1. Residents are free to use ICCs for payments in rupees or foreign exchange for goods and services procured in India.
      
   2. ICCs can also be utilised by residents for making personal remittances which are permitted under the extant Exchange Control Regulations subject to the applicable ceilings, if any, and compliance with conditions and documentation prescribed for the purpose concerned.
      
   3. ICCs issued in India are not valid for payment in foreign exchange in Nepal and Bhutan.
      
   4. Residents going abroad are free to use ICCs for all bonafide personal expenses, including the purchase of goods for personal use provided , the total exchange drawn during the trip abroad does not exceed their entitlement. Import of goods so purchased abroad into India would be governed by the Baggage Rules/Exim Policy in force. The entitlement of exchange should be ascertained from the authorised dealer through whom reimbursement would be provided. The residents may , if they so desire, draw foreign exchange against ICCs in the form of foreign currency notes/travellers' cheques to the extent of their entitlement from an authorised dealer /full-fledged money changer. Sale of such foreign currency notes/travellers' cheques out of entitlement would be governed by extant regulations and would be subject to the applicable ceilings. Exchange sold in form of currency notes/travellers' cheques should be endorsed on the passport.
      
   5. Residents who have been issued ICCs and are going abroad for employment or on emigration are not permitted to use it for drawing exchange. They should surrender their ICCs before they proceed abroad on employment/emigration.
      
   6. ICCs can also be used for the following purposes:
      
      1. Import of software through Internet.
         
      2. Fees for training or education of scientific/technical nature through Internet.
         
      3. Registration of Internet domain name, hosting charges for websites/home pages overseas and access fees for Internet related services through website .
         
      4. Advance payment not exceeding U.S.$ 15,000 for import of software/database through internet may also be allowed .The cardholder should furnish the details of software/database obtained through the Internet, charges to be paid to the overseas organisation for downloading the software/data and a declaration having received the software/data for which the payment was made through ICC.
         
   7. The ICC cannot be used for effecting remittances for the purposes for which release of exchange is not permissible under the extant regulations like subscription to (a) magazines etc. which are on the proscribed/banned list and (b) football pools, sweepstakes or lotteries, etc.
      
   8. Cardholders drawing exchange under BTQ against ICCs should on their return to India get their passports endorsed from the authorised dealers through whom the reimbursement will be provided.

A.D.(M.A. Series) Circular No.27