credit policy
overview
| coop banks
| basics
|
lending
|adv banking
| products
| IT
& banking
daily news |
banking software|
bank directory|
internet banking|
IT directory|
bankers forum
Click here to return to main page of Annual Policy Statement 2006-07
Part II. Annual Statement on Developmental and Regulatory Policies for the Year 2006-07
Financial Markets
Foreign Exchange Market
136. The Reserve Bank has taken several initiatives to liberalise and simplify procedures for conduct of foreign exchange business with a view to facilitating prompt and efficient services. Further measures proposed in this direction are detailed below:
(a) Extension of Time Limit to Realise Export Proceeds
137. At present, Authorised Dealers (ADs) are allowed to extend the time limit for realisation of export proceeds beyond the prescribed period of six months up to an invoice value of US$ 100,000. As a measure of liberalisation, it is proposed that:
• ADs could, henceforth, grant extension of time to realise export proceeds up to US $ 1 million beyond the prescribed period of six months.
(b) Remittance of Initial and Recurring Expenses for Branch Offices Opened Abroad
138. ADs are permitted to remit initial and recurring expenses of the branch office of an Indian entity abroad up to 2 per cent and 1 per cent of the average annual sales/income or turnover during the last two accounting years, respectively. As a measure of further liberalisation and simplification, it is proposed that:
• ADs would, henceforth, allow remittances towards initial and recurring expenses of branch offices of Indian entities up to 10 per cent and
5 per cent of the average annual sales/income or turnover during the last two accounting years, respectively.
(c) Working Group on Cost of NRI Remittances
139. Remittances from non-resident Indians (NRIs) constitute a significant segment of the country’s foreign exchange inflows. Concerns have been expressed on the relatively high cost that can be faced, particularly by migrants wishing to send small amounts back to families. In these cases, the exchange rate charged on money transfers can be a significant additional cost that is often not obvious to those sending money transfers.
140. The Reserve Bank has recently constituted a Group (Chairman: Shri P.K. Pain), including representatives from banks, to examine the various cost aspects including cost structure for each element of the value chain and associated transfer costs and suggest measures to reduce the cost and make remittance business more efficient. The Group is expected to submit its report by end-May 2006. The report will be put in the public domain for feedback from the public.
(d) Advisory Group on FEMA Regulations Relating to Services
141. Services are one of the fastest growing sectors in the Indian economy and contribute substantially to output, employment and exports. The current Foreign Exchange Management Act (FEMA) regulations are generally oriented to trade in both goods and services and the unique features of the services sector may need to be specifically and clearly addressed. It is, therefore, proposed to:
• constitute an Advisory Group (Chairman: Shri Mohandas Pai) to review all foreign exchange regulations relating to services and make appropriate suggestions for further clarification or simplification and prepare a compendium of all foreign exchange regulations that apply to the services sector.
(e) Access to Foreign Exchange for Individuals
142. With the progressive liberalisation in foreign exchange related transactions, a large segment of the population can undertake a variety of current account transactions without approaching the Reserve Bank. More entities are being allowed to handle non-trade current account transactions in order to enable individuals to have easy access to foreign exchange as well as to enhance competition among the service providers. Select
full fledged money changers (FFMCs), urban co-operative banks (UCBs) and regional rural banks (RRBs) are permitted to release/remit foreign exchange for a range of current account transactions such as private visits, business travel, fee for participation in global conferences/training/international events, film shooting, medical treatment, emigration and emigration consultancy fees. Consequently, scheduled commercial banks holding full fledged AD licence are designated as AD Category I and those undertaking non-trade current account transactions as AD Category II.
(f) Anti-Money Laundering Guidelines for Authorised Money Changers
143. The Reserve Bank issued guidelines for authorised money changers (AMCs) in February 2006 in order to protect them from being used for money laundering activities. The guidelines require AMCs to put in place a policy framework on ‘know your customer’ and ‘anti-money laundering’ measures for prevention of money laundering while undertaking money changing transactions.
Click Here For Highlights of Annual Policy Statement for the Year 2006-07
Advertise
| Book Store |
About us |
Contact us
| Terms of use | Disclaimer
© Banknet India |
All rights reserved worldwide.
Best viewed with IE 4.00 & above at a screen resolution of 800 x 600
or higher