1. This document discusses foreign exchange facilities available to resident Indians under the Foreign Exchange Management Act (FEMA) 1999. It covers current account transactions like travel abroad for various purposes, medical treatment, education, employment, emigration, and sending gifts. 2. It also discusses cases requiring prior approval from authorities and general rules regarding usage of foreign exchange, international cards, gifts/donations, and authorized persons for foreign exchange transactions. 3. The key facilities available to residents include drawing foreign exchange for travel up to $10,000, medical expenses up to $100,000, education expenses as per estimates, employment abroad up to $100,000, and emigration up to country limit or $100,000

1. Forex Facilities in India
(under the FEMA, 1999)
1
Definitions
Facilities for Resident Indians
Facilities for Non Resident Indians (NRIs)
and Persons of Indian Origin (PIOs)

2. 2
Definitions

3. Person Resident in India
3
A 'person resident in India' is defined in Section 2(v) of FEMA, 1999 as :
A person residing in India for more than 182 days during the course of
the preceding financial year but does not include –
(A) a person who has gone out of India or who stays outside India, in
either case - for or on taking up employment outside India, or for
carrying on outside India a business or vocation outside India, or for
any other purpose, in such circumstances as would indicate his
intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case,
otherwise than –
for or on taking up employment in India, or for carrying on in India a
business or vocation in India, or for any other purpose, in such
circumstances as would indicate his intention to stay in India for an
uncertain period any person or body corporate registered or
incorporated in India, an office, branch or agency in India owned or
controlled by a person resident outside India, an office, branch or
agency outside India owned or controlled by a person resident in India;

4. NRI and PIO
4
 A Non Resident Indian (NRI) is a person resident
outside India, who is a citizen of India or is a
person of Indian origin.
 A Person of Indian Origin (PIO) for this purpose
is a citizen of any country other than Bangladesh
or Pakistan, if (a) he at any time held Indian
passport; or (b) he or either of his parents or any
of his grandparents was a citizen of India by
virtue of the Constitution of India or the
Citizenship Act, 1955 (57 of 1955); or (c) the
person is a spouse of an Indian citizen or a
person referred to in sub-clause (a) or (b).

5. Authorised Persons
5
 Authorised Dealers (ADs)
An Authorised Dealer is normally a bank
specifically authorized by the Reserve
Bank under Section 10(1) of FEMA, 1999,
to deal in foreign exchange or foreign
securities
 Full-Fledged Money Changers (FFMCs)
are permitted to release exchange for
business and private visits

6. 6
Facilities for Resident Indians

7. Current vs Capital Account
7
 Under the Foreign Exchange Management Act, 1999
(FEMA), which came into force with effect from June 1,
2000, all transactions involving foreign exchange have
been classified either as capital or current account
transactions.
 In terms of Section 5 of the FEMA, persons resident in
India are free to buy or sell foreign exchange for any
current account transaction except for those transactions
for which drawal of foreign exchange has been prohibited
by the Central Government.

8. Travel Abroad
8
Private Visits Business Trips
 Up to USD 10,000 for countries other  Up to USD 25,000 per visit for
than Nepal and Bhutan, for tourism, countries other than to Nepal and
etc. in any one financial year, on self- Bhutan.
declaration basis, irrespective of the  Visits in connection with
number of visits undertaken during attending of an international
the year. conference, seminar, specialised
 This limit of USD 10,000 or its training, study tour, apprentice
equivalent per financial year for training, etc., are treated as
private visits can also be availed of by a business visits.
person who is availing of foreign  Release of foreign exchange
exchange for travel abroad for any exceeding USD 25,000 for
purposes, such as, for employment or business travel abroad (other than
immigration or studies. to Nepal and Bhutan), irrespective
 No foreign exchange is available for of the period of stay, requires
visit to Nepal and/or Bhutan for any prior permission from RBI.
purpose.
 A resident Indian is allowed to take
INR of denomination of Rs.100 or
lesser denomination to Nepal and
Bhutan without limit.

9. Medical Treatment
9
 An AD can release forex up to USD 100,000 for medical
treatment abroad on self declaration basis, without insisting on
any estimate from a hospital/doctor in India/abroad.
 A person visiting abroad for medical treatment can obtain
forex exceeding the above limit, provided the request is
supported by an estimate from a hospital/doctor in
India/abroad.
 An amount up to USD 25,000 is allowed for maintenance
expenses of a patient going abroad for medical treatment or
check-up abroad, or to a person for accompanying as attendant
to a patient going abroad for medical treatment/check-up.
 The amount of USD 25,000 allowed to the patient going abroad
is in addition to the limit of USD 100,000 mentioned above.

10. Students Going Abroad
10
 For studies abroad the estimate received from the
institution abroad or USD 100,000, per academic year,
whichever is higher, may be availed of from an AD.
 Students going abroad for studies are treated as Non-
Resident Indians (NRIs) and are eligible for all the
facilities available to NRIs under FEMA, 1999.
 Educational and other loans availed of by students as
residents in India can be allowed to continue.
 A student holding NRO account may withdraw and
repatriate up to USD 1 million per financial year from his
NRO account.
 The student may avail of an amount of USD 10,000 or its
equivalent for incidental expenses out of which USD 3000
or its equivalent may be carried in the form of foreign
currency while going for study abroad.

11. Employment Abroad
11
 A person going abroad for
employment can draw foreign
exchange up to USD 100,000 from any
AD on self-declaration.

12. Emigration
12
 A person going abroad on emigration can draw
foreign exchange from an AD up to the amount
prescribed by the country of emigration or USD
100,000 on self- declaration
 This amount is only to meet the incidental
expenses in the country of emigration.
 No amount of foreign exchange can be remitted
outside India to become eligible or for earning
points or credits for immigration. All such
remittances require prior permission of RBI.
 If requirement exceeds USD 100,000, the person
requires to obtain prior approval from RBI.

13. Cases Requiring Prior Approval
13
 Dance troupes, artistes, etc., who wish to
undertake cultural tours abroad, are required
to prior approval from the Ministry of Human
Resources Development (Department of
Education and Culture), Government of India,
New Delhi.
 Permission is required for receiving
grant/donation from abroad under the Foreign
Contribution Regulation Act, 1976 which is
administered and monitored by the Ministry of
Home Affairs, though no specific approval
from the RBI is required in this regard.

14. General
14
 Permissible foreign exchange can be drawn 60 days in
advance. If it is not possible to use it within a period of
60 days, it should be immediately surrendered to an
authorised person.
 Residents can retain foreign exchange up to USD
2,000, in the form of foreign currency notes or TCs for
future use or credit to their Resident Foreign Currency
(Domestic) Accounts. Foreign coins can be held
without any limit.
 Foreign exchange for travel abroad can be purchased
from an authorised person against Rupee payment in
cash only up to Rs.50,000/-. If the Rupee equivalent
exceeds Rs.50,000/-, the entire payment should be
made by way of a crossed cheque/ banker’s cheque/
pay order/ demand draft/ debit card / credit card /
prepaid card only.

15. International Credit / Debit Cards
15
 International Credit Cards (ICCs) / ATMs/ Debit Cards can be
used for travel abroad in connection with various purposes.
 They can also be used for making personal payments like
subscription to foreign journals, internet subscription, etc.
 The entitlement of foreign exchange on ICCs is limited by the
credit limit fixed by the card issuing authority only.
 With ICCs one can (i) meet expenses/make purchases while
abroad (ii) make payments in foreign exchange for purchase
of books and other items through internet in India. If the
person has a foreign currency account in India or with a bank
overseas, he/she can even obtain ICCs of overseas banks and
reputed agencies.
 Use of these instruments for payment in foreign exchange in
Nepal and Bhutan is not permitted.

16. Gifts / Donations
16
 Any resident individual, may remit the
entire limit of USD 200,000 in one
financial year under LRS as gift to a
person residing outside India or as
donation to a charitable / educational
/ religious / cultural organisation
outside India.
 Remittances exceeding USD 200,000
requires prior permission from RBI.

17. Sending Gifts Abroad
17
 A person resident in India is free to send
(export) any gift article of value not
exceeding Rs.5,00,000 provided export of
that item is not prohibited under the extant
Foreign Trade Policy and the exporter
submits a declaration that goods of gift are
not more than Rs.5,00,000 in value.
 Export of goods or services up to
Rs.5,00,000 may be made without any
forms like GR / SDF / PP / SOFTEX, etc.

18. Indian Currency While Going Abroad
18
 Residents can take outside India
(other than to Nepal and Bhutan) INR
notes up to an amount not exceeding
Rs. 7,500/ - per person.
 They may take or send outside India
(other than to Nepal and Bhutan)
commemorative coins not exceeding
two coins each.

19. Indian Currency While Coming to India
19
 A resident of India, who has gone out of
India on a temporary visit can bring into
India, at the time of his return from any
place outside India (other than Nepal and
Bhutan), INR notes up to an amount not
exceeding Rs.7,500.
 A person can take or send out of India to
Nepal or Bhutan, currency notes of
Government of India and Reserve Bank
notes, in denominations not exceeding
Rs.100.

20. Forex While Coming to India
20
 A person coming into India from abroad can
bring with him forex without any limit.
 If the aggregate value of the forex brought
(currency notes, bank notes or travellers
cheques) exceeds USD 10,000 or its
equivalent and/or the value of foreign
currency alone exceeds USD 5,000 or its
equivalent, it should be declared to the
Customs Authorities at the Airport in the
Currency Declaration Form (CDF), on arrival
in India.

21. Taking Jewellery Abroad
21
 Taking personal jewellery out of India
is goverened by the Baggage Rules,
governed and administered by the
Customs Authorities. Approvals, if
any, required should be obtained
from Customs Authorities.
 No approval of the RBI is required.

22. Local Hospitality
22
 A person resident in India is free
to make any payment in Indian
Rupees towards meeting
expenses on boarding, lodging
and relating services or travel to
and from and within India, of a
person resident outside
India, who is on a visit to India.

23. Purchase of Air Tickets in India
23
 Residents may book their tickets
in India for their visit to any third
country not involving India. For
example, residents can book their
tickets for travel from London to
New York, through any domestic
or foreign airlines in India itself
and pay for the same in INR
locally.

24. Foreign Currency Denominated Accounts
24
 Exchange Earners Foreign
Currency Accounts
 Resident Foreign Currency
Accounts
 Resident Foreign Currency
(Domestic) Account

25. Exchange Earners Foreign Currency A/c
25
 All resident foreign exchange earners
can credit up to 100 per cent of their, to
their EEFC Account with an AD in India.
 Funds held in EEFC account can be
utilised for all permissible current
account transactions and also for
approved capital account transactions
 The account is maintained in the form of
a non-interest bearing current account.

26. Resident Foreign Currency Accounts
26
 A person resident in India may open, hold and maintain with an
Authorised Dealer in India a Resident Foreign Currency (RFC)
Account to keep their foreign currency assets which were held
outside India at the time of return can be credited to such accounts.
 The foreign exchange received as:
o pension of any other superannuation or other monetary
benefits from the employer outside India
o received or acquired as gift or inheritance
o received as the proceeds of life insurance policy claims /
maturity / surrender values settled in foreign currency from an
insurance company in India
can also be credited to this account.
 RFC account can be maintained in the form of current or savings or
term deposit accounts.
 The funds in RFC account are free from all restrictions regarding
utilisation of foreign currency balances including any restriction on
investment outside India.

27. Resident Foreign Currency (Domestic) Account
27
 A resident Individual may open, hold and maintain with an AD
in India, a Resident Foreign Currency (Domestic) Account, out
of foreign exchange acquired in the form of notes and travellers
cheques, from any of the sources like, payment for services
rendered abroad, as honorarium, gift, services rendered or in
settlement of any lawful obligation from any person not resident
in India.
 The account may also be credited with / opened out of foreign
exchange earned abroad like proceeds of export of goods and /
or services, royalty, honorarium, etc., and / or gifts received
from close relatives (as defined in the Companies Act) and
repatriated to India through normal banking channels.
 The account is maintained in the form of current account and
does not bear any interest. There is no ceiling on the balances in
the account. The account may be debited for payments made
towards permissible current and capital account transactions.

28. Holding Assets Abroad
28
Residents in India are free to hold, own,
transfer or invest in foreign currency,
foreign security or any immovable
property situated outside India if such
currency, security or property was
acquired, held or owned by such person
when he was resident outside India or
inherited from a person who was
resident outside India.

29. Liberalised Remittance Scheme (LRS)
29
 All resident individuals, including minors, are
allowed to freely remit up to USD 200,000 per
financial year (April – March) for any
permissible current or capital account
transaction or a combination of both.
 Under the Scheme, resident individuals can
acquire and hold immovable property or shares
or debt instruments or any other assets outside
India, without prior approval of the Reserve
Bank. Individuals can also open, maintain and
hold foreign currency accounts with banks
outside India for carrying out transactions
permitted under the Scheme.

30. LRS: Prohibited Items
30
 Remittance for any purpose specifically prohibited under Schedule-I
(like purchase of lottery tickets/sweep stakes, proscribed magazines,
etc.)
 Remittance from India for margins or margin calls to overseas
exchanges / overseas counterparty;
 Remittances for purchase of FCCBs issued by Indian companies in the
overseas secondary market;
 Remittance for trading in foreign exchange abroad;
 Remittance by a resident individual for setting up a company abroad;
 Remittances directly or indirectly to Bhutan, Nepal, Mauritius and
Pakistan;
 Remittances directly or indirectly to countries identified by the
Financial Action Task Force (FATF) as “non co-operative countries
and territories”,; and
 Remittances directly or indirectly to those individuals and entities
identified as posing significant risk of committing acts of terrorism

31. LRS facility
31
 The facility under the Scheme is in addition
to those already available for private travel,
business travel, studies, medical treatment,
etc., The Scheme can also be used for these
purposes.
 However, gift and donation remittances
cannot be made separately and have to be
made under the Scheme only. Accordingly,
resident individuals can remit gifts and
donations up to USD 200,000 per financial
year under the Scheme.

32. LRS: Repatriation of the accrued interest/dividend
32
 The investor can retain and reinvest
the income earned on investments
made under the Scheme.
 The residents are not required to
repatriate the funds or income
generated out of investments made
under the Scheme.

33. LRS: Purchase of Objects of Art
33
 Remittances under the Scheme can be
used for purchasing objects of art
subject to the provisions of other
applicable laws such as the extant
Foreign Trade Policy of the
Government of India.

34. Frequency and Currency of Remittance
34
 No restriction on the frequency. However,
the total amount of foreign exchange
purchased from or remitted through, all
sources in India during a financial year
should be within the cumulative limit of USD
200,000.
 The remittances can be made in any freely
convertible foreign currency equivalent to
USD 200,000 in a financial year.

35. LRS: Requirements for the Remitter
35
 Designate a branch of an AD through which all the
remittances under the Scheme will be made.
 Maintain the bank account with the bank for a
minimum period of one year prior to the remittance.
 Furnish an application-cum-declaration in the
specified format regarding the purpose of the
remittance and declare that the funds belong to him
and will not be used for purposes prohibited or
regulated under the Scheme.

36. 36
Facilities for Non Resident Indians (NRIs)
and Persons of Indian Origin (PIOs)

37. Types of Accounts
37
 An NRI or PIO can open, hold and maintain
different types of accounts with an AD in
India.
 NRO Savings accounts can also be
maintained with the Post Offices in India.
 However, individuals/ entities of Bangladesh
and Pakistan require the prior approval of
the RBI.

38. Types of Accounts
38
 Non-Resident (Ordinary) Rupee
Account (NRO Account)
 Non-Resident (External) Rupee
Account (NRE Account)
 Foreign Currency Non Resident
(Bank) Account – [FCNR (B) Account]

39. Non-Resident (Ordinary) Rupee Account (1)
39
 NRO accounts may be opened / maintained in the form of current,
savings, recurring or fixed deposit accounts.
 Savings Account - Normally maintained for crediting legitimate dues
/ earnings / income such as dividends, interest etc. Interest rates on
NRO Savings deposits shall be at the rate applicable to domestic
savings deposits.
 Permissible credits to NRO account are transfers from rupee
accounts of non-resident banks, remittances received in permitted
currency from outside India through normal banking channels,
permitted currency tendered by account holder during his
temporary visit to India, legitimate dues in India of the account
holder like current income like rent, dividend, pension, interest,
etc., sale proceeds of assets including immovable property acquired
out of rupee/foreign currency funds or by way of legacy/
inheritance.
 Eligible debits such as all local payments in rupees including
payments for investments as specified by RBI and remittance
outside India of current income like rent, dividend, pension,
interest, etc., net of applicable taxes, of the account holder.

40. Non-Resident (Ordinary) Rupee Account (2)
40
 NRI/PIO may remit from the balances held in NRO account an
amount not exceeding USD one million per financial year,
subject to payment of applicable taxes
 The limit of USD 1 million per financial year includes sale
proceeds of immovable properties held by NRIs/PIO.
 The accounts may be held jointly with residents and / or with
non-resident Indian.
 The NRO account holder may opt for nomination facility.
 NRO (current/savings) account can also be opened by a foreign
national of non-Indian origin visiting India, with funds remitted
from outside India through banking channel or by sale of foreign
exchange brought by him to India. The details of this facility are
given in the FAQs on “Accounts opened by Foreign Nationals and
Foreign Tourists” available on the RBI website.
 Loans to non-resident account holders and to third parties may
be granted in Rupees by Authorized Dealer / bank against the
security of fixed deposits subject to certain terms and
conditions.

41. Non-Resident (External) Rupee Account (1)
41
 NRE account may be in the form of savings, current, recurring
or fixed deposit accounts. Such accounts can be opened only by
the non-resident himself and not through the holder of the
power of attorney.
 NRE accounts cannot be held jointly with residents
 Balances held in the NRE account are freely repatriable.
 Accrued interest income and balances held in NRE accounts are
exempt from Income tax and Wealth tax, respectively.
 ADs may at their discretion/commercial judgement allow for a
period of not more than two weeks, overdrawings in NRE
savings bank accounts, up to a limit of Rs.50000 subject to the
condition that such overdrawings together with the interest
payable thereon are cleared/repaid within a period of two
weeks, out of inward remittances through normal banking
channels or by transfer of funds from other NRE/FCNR
accounts.

42. Non-Resident (External) Rupee Account (2)
42
 Savings - The interest rates on NRE Savings deposits shall be at the rate
applicable to domestic savings deposits.
 Term deposits – The interest rates are stipulated by the Department of
Banking Operations and Development, Reserve Bank of India. At present,
with effect from the close of business in India on November 15, 2008,
interest rates on NRE deposits for one to three years should not exceed the
LIBOR/SWAP rates plus 175 basis points, as on the last working day of the
previous month, for US dollar of corresponding maturities. The interest
rates as determined above for three year deposits will also be applicable in
case the maturity period exceeds three years.
 Permissible credits to NRE account are inward remittance to India in
permitted currency, proceeds of account payee cheques, demand drafts /
bankers' cheques, issued against encashment of foreign currency, where the
instruments issued to the NRE account holder are supported by encashment
certificate issued by AD Category-I / Category-II, transfers from other NRE /
FCNR accounts, interest accruing on the funds held in such accounts,
interest on Government securities/dividends on units of mutual funds
purchased by debit to the NRE/FCNR(B) account of the holder, certain types
of refunds, etc.

43. Non-Resident (External) Rupee Account (3)
43
 Eligible debits are local disbursements, transfer to other
NRE / FCNR accounts of person eligible to open such
accounts, remittance outside India, investments in
shares / securities/commercial paper of an Indian
company, etc.
 Loans up to Rs.100 lakh can be extended against security
of funds held in NRE Account either to the depositors or
third parties.
 Such accounts can be operated through power of
attorney in favour of residents for limited purpose of
withdrawal of local payments or remittances through
normal banking channels to the account holder himself.

44. Foreign Currency Non Resident (Bank) Account (1)
44
 FCNR (B) accounts are only in the form of term deposits of 1 to 5
years
 All debits / credits permissible in respect of NRE accounts are
permissible in FCNR (B) accounts also.
 Account can be in Pound Sterling, US Dollar, Japanese Yen,
Euro, Canadian Dollar and Australian Dollar.
 In case the depositor with any convertible currency other than
designated currency desires to place a deposit in these accounts,
authorised dealers may undertake with the depositor a fully
covered swap in that currency against the desired designated
currency. Such a swap may also be done between two designated
currencies.
 Loans up to Rs.100 lakh can be extended against security of
funds held in FCNR(B) deposit either to the depositors or third
parties.

45. Foreign Currency Non Resident (Bank) Account (2)
45
 The interest rates are stipulated by RBI. At present, in respect of FCNR
(B) deposits of all maturities contracted effective from November 15,
2008, interest is paid within the ceiling rate of LIBOR / SWAP rates
plus 100 basis points for the respective currency/corresponding
maturities. On floating rate deposits, interest is be paid within the
ceiling of SWAP rates for the respective currency / maturity plus 100
basis points. For floating rate deposits, the interest reset period is six
months.
 When an account holder becomes a person resident in India, deposits
may be allowed to continue till maturity at the contracted rate of
interest, if so desired by him.
 Terms and conditions as applicable to NRE accounts in respect of joint
accounts, repatriation of funds, opening account during temporary
visit, operation by power of attorney, loans/overdrafts against security
of funds held in accounts, apply mutatis mutandis to FCNR (B).

46. Borrowing Money from Close Relatives Outside India
46
An individual resident can borrow sum not
exceeding USD 250,000 or its equivalent from
his close relatives staying outside India,
subject to the conditions that:
 the minimum maturity period of the loan is
one year;
 the loan is free of interest; and
 the amount of loan is received by inward
remittance in free foreign exchange through
normal banking channels or by debit to the
NRE/FCNR account of the NRI.

47. Investment on Repatriation Basis (1)
47
NRIs may, without limit, purchase on
repatriation basis:
 Government dated securities / Treasury bills
 Units of domestic mutual funds;
 Bonds issued by a public sector undertaking
(PSU) in India.
 Non-convertible debentures of a company
incorporated in India.
 Perpetual debt instruments and debt capital
instruments issued by banks in India.

48. Investment on Repatriation Basis (2)
48
 Shares in Public Sector Enterprises being dis-
invested by the Government of India, provided
the purchase is in accordance with the terms
and conditions stipulated in the notice inviting
bids.
 Shares and convertible debentures of Indian
companies under the FDI scheme (including
automatic route & FIPB), subject to the terms
and conditions specified by RBI.
 Shares and convertible debentures of Indian
companies through stock exchange under
Portfolio Investment Scheme, subject to the
terms and conditions specified by RBI.

49. Investment on Non-Repatriation Basis (1)
49
NRIs may, without limit, purchase on non-
repatriation basis :
 Government dated securities / Treasury
bills
 Units of domestic mutual funds
 Units of Money Market Mutual Funds
 National Plan/Savings Certificates
 Non-convertible debentures of a company
incorporated in India

50. Investment on Non-Repatriation Basis (2)
50
 Shares and convertible debentures of Indian
companies through stock exchange under
Portfolio Investment Scheme, subject to the
terms and conditions specified by RBI.
 Exchange traded derivative contracts approved
by the SEBI, from time to time, out of INR funds
held in India on non-repatriable basis, subject to
the limits prescribed by the SEBI.
 NRIs are, however, not permitted to invest in
small savings or Public Provident Fund (PPF).

51. Investment in Immovable Property (1)
51
 An NRI / PIO / Foreign National who is a person resident in
India may acquire immovable property in India other than
agricultural land/ plantation property or a farm house out of
repatriable and / or non-repatriable funds.
 Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan,
China, Iran, Nepal and Bhutan require prior approval of the
RBI.
 The payment of purchase price, if any, should be made out of
(i) funds received in India through normal banking channels
by way of inward remittance from any place outside India or
(ii) funds held in any non-resident account maintained in
accordance with the provisions of the Act and the regulations
made by the Reserve Bank.

52. Investment in Immovable Property (2)
52
 No payment of purchase price for acquisition
of immovable property can be made either by
traveller’s cheque or by foreign currency notes
or by other mode other than those specifically
permitted as above.
 An NRI may acquire any immovable property
in India other than agricultural land / farm
house plantation property, by way of gift from
a person resident in India or from a person
resident outside India who is a citizen of India
or from a person of Indian origin resident
outside India

53. Investment in Immovable Property (3)
53
 NRI may acquire any immovable property in India
by way of inheritance from a person resident
outside India who had acquired such property in
accordance with the provisions of the foreign
exchange law in force at the time of acquisition by
him or the provisions of these Regulations or from
a person resident in India
 An NRI may transfer any immovable property in
India to a person resident in India.
 NRI may transfer any immovable property other
than agricultural or plantation property or farm
house to a person resident outside India who is a
citizen of India or to a person of Indian origin
resident outside India.

54. Investment in Immovable Property (4)
54
 In respect of such investments, NRIs are
eligible to repatriate:
 The sale proceeds of immovable property in
India if the property was acquired out of
foreign exchange sources i.e. remitted
through normal banking channels / by debit
to NRE / FCNR (B) account.
 The amount to be repatriated should not
exceed the amount paid for the property in
foreign exchange received through normal
banking channel or by debit to NRE account
(foreign currency equivalent, as on the date
of payment) or debit to FCNR (B) account.

55. Investment in Immovable Property (5)
55
 In the event of sale of immovable property, other
than agricultural land / farm house / plantation
property in India, by NRI / PIO, the repatriation of
sale proceeds is restricted to not more than two
residential properties subject to certain conditions.
 If the property was acquired out of Rupee sources,
NRI or PIO may remit an amount up to USD one
million per financial year out of the balances held
in the NRO account (inclusive of sale proceeds of
assets acquired by way of inheritance or
settlement), for all the bonafide purposes to the
satisfaction of the Authorized Dealer bank and
subject to tax compliance.

56. Investment in Immovable Property (6)
56
 Refund of (a) application / earnest money /
purchase consideration made by house-building
agencies/seller on account of non-allotment of
flats / plots and (b) cancellation of booking/deals
for purchase of residential/commercial
properties, together with interest, net of taxes,
provided original payment is made out of
NRE/FCNR (B) account/inward remittances.
 Housing Loan in rupees availed of by NRIs/ PIOs
from ADs / Housing Financial Institutions in
India, can be repaid by the close relatives in
India of the borrower.

57. Facilities to Returning NRIs/PIO
57
Returning NRIs/PIO may continue to
hold, own, transfer or invest in foreign
currency, foreign security or any
immovable property situated outside
India, if such currency, security or
property was acquired, held or owned
when resident outside India

58. Foreign Currency Account
58
 A person resident in India who has gone abroad for
studies or who is on a visit to a foreign country may open,
hold and maintain a Foreign Currency Account with a
bank outside India during his stay outside India, provided
that on his return to India, the balance in the account is
repatriated to India. However, short visits to India by the
student who has gone abroad for studies, before
completion of his studies, shall not be treated as his return
to India.
 A person resident in India who has gone out of India to
participate in an exhibition/trade fair outside India may
open, hold and maintain a Foreign Currency Account with
a bank outside India for crediting the sale proceeds of
goods on display in the exhibition/trade fair. However, the
balance in the account is repatriated to India through
normal banking channels within a period of one month
from the date of closure of the exhibition/trade fair.

59. Resident Foreign Currency Account
59
 Returning NRIs /PIOs may open, hold and
maintain with an AD in India a Resident Foreign
Currency (RFC) Account to transfer balances held
in NRE/FCNR(B) accounts.
 Proceeds of assets held outside India at the time of
return, can be credited to RFC account.
 The funds in RFC accounts are free from all
restrictions regarding utilisation of foreign
currency balances including any restriction on
investment in any form outside India.
 RFC accounts can be maintained in the form of
current or savings or term deposit accounts, where
the account holder is an individual and in the form
of current or term deposits in all other cases.

60. Forex Facilities for Individuals
60
 NRIs can be Joint Holders in Resident’s SB/EEFC/RFC Accounts
 Residents can be Joint Holders in NRE/FCNR Accounts
 Residents can gift Shares/Debentures upto USD 50,000 Value
 Sale Proceeds of FDIs can be credited to NRE/FCNR (B) Account
 Gifts to NRIs can be credited to NRO Accounts in Rupees
 Loans to NRI Close Relatives can be given in Rupees
 Loans given to NRI Close Relatives can be repaid
 Residents can bear Medical Expenses of NRIs

61. 61
 Rupee / Foreign Currency vostro Accounts
 ECB Procedures simplified
 Contingency Plan for Bank ATMs
 Special Dispensation to NSTFDC
 Service Charges introduced for RTGS
 Submission of Credit Information to CICs
 Guidelines for Rehabilitation of Sick SME Units
 Authorisation Guidelines for PDs revised

62. Bank Rate, Cash Reserve Rate and Statutory
Liquidity Ratio
62
Statutory
Effective Date Bank Rate Cash Reserve Ratio
Liquidity Ratio
05-07-1935 3.50 (a) 5% of DL, (b) 2% of TL -
16-03-1949 3.00 - 20.00
06-03-1960 4.00 (a) 5% of DL, (b) 2% of TL -
17-02-1965 6.00 3.00% of NDTL -
02-03-1968 5.00 - -
09-01-1971 6.00 - -
31-05-1973 7.00 - -
23-07-1974 9.00 5.00 -
12-07-1981 10.00 6.00 -
04-02-1984 - 9.00 -
28-02-1987 - 9.50 -
24-10-1987 - 10.00 -

63. 30-07-1988 - 11.00 -
01-07-1989 - 15.00 -
04-07-1991 11.00 - -
09-10-1991 12.00 - -
16-04-1997 11.00 10.00 -
25-10-1997 - 9.75 25.00
17-01-1998 11.00 10.50 -
19-03-1998 10.50 - -
28-03-1998 - 10.25 -
03-04-1998 10.00 - -
11-04-1998 - 10.00 -
29-04-1998 9.00 - -
29-08-1998 - 11.00 -
02-03-1999 8.00 - -
63

64. 02-04-2000 7.00 9.00 -
22-07-2000 8.00 8.00 -
02-03-2001 7.00 8.25 -
23-10-2001 6.50 7.50 -
30-04-2003 6.00 4.75 -
26-04-2008 - 7.75 -
24-05-2008 - 8.25 -
30-08-2008 - 9.00 -
17-01-2009 - 5.00 -
27-02-2010 - 5.75 -
24-04-2010 - 6.00 -
16-12-2010 24
64

65. Annual (Gross)
Call/Noti
Units of Redemption Yield
ce Prime Lending Rates of Term
Commercial Bank Rates UTI (July- of Government
Money Lending Institutions
June) of India
Rates
Securities
Divid Yiel
IIBI /
Deposit Rates Lending Rates IDBI IFCI ICICI SFCs end d
IRBI
Rate Rate
Year
Key
Key Key Lending
Lending Lending Rates as
Rates as Rates as Prescribed
Prescribed Prescribed by
Over
by by RBI (All
3 Short
SBI RBI (All RBI (All Commerci Medium
1 to yrs. Abov -
Advanc Commerci Commerci al -Term Long-Term (15
3 & e5 Term
e al al Banks (5- yrs. & Above)
yrs. upto yrs. (1-
Rate Banks Banks including 15yrs.)
5 5yrs.)
including including SBI) -
yrs.
SBI) - SBI) - Minimum
Ceiling Minimum Rate
Rate Rate Selective
General General Credit
Control
8.50
6.00 (7.00
- 7.00- - 7.50- 3.85- 4.32-
1970-71 6.38 6.50 7.00 7.25 8.50 - - - 8.50) 9.00 8.50 - 10.50 8.00 7.55 4.28 4.84 4.77-5.53
65

66. 14.00
8.00- 17.50- (12.50- 11.25- 10.2 5.32- 5.81- 6.45-
1981-82 8.96 9.00 10.00 10.00 16.5019.50 13.50 19.50 14.00) 14.00 14.00 9.15 14.00 12.50 9 6.43 7.02 8.00
14.00 14.00
9.00- 14.00- -14.00- - 9.00- 14.0 7.04- 9.44- 10.86-
1990-91 15.85 10.00 11.00 11.00 16.5016.50 16.00 16 15.00 15.00 15.00 15.00 20.00 19.50 3 21.70 12.70 12.04
18.00 18.00
18.00- -18.00- - 9.00- 16.4 8.37- 9.50- 9.91-
1991-92 19.57 12.00 13.00 13.00 16.50 - 19.00 19 20.00 20.00 20.00 20.00 20.00 25.00 0 26.26 13.42 12.38
13.50
8.50- 10.00- 10.00- 13.60- - 12.00- 10.1 3.18- 6.50- 9.79-
1999-00 8.87 9.50 10.50 10.50 12.00 - 12.00-12.50 Free 17.10 17.00 12.50 14 18.00 13.75 9 14.30 13.84 13.11
7.50- 8.00- 8.00- 9.50- 5.32- 5.14- 7.41-
2001-02 7.16 8.50 8.50 8.50 11.50 - 11.00-12.00 Free 11.50 12.50 12.50 11.5 16.75 - - 10.96 13.85 10.86
8.00- 7.75- 7.75- 4.61- 5.50- 6.27-
2008-09 7.67 8.75 8.50 8.50 12.25 - 11.50-12.50 Free - - - - - - - 11.09 10.69 8.26
9.00- 8.50- 8.50-
2011-12 - 9.25 9.25 9.25 9.50 - 9.50-10.75 - - - - - - - - - - -
66

67. INR value against USD
67
Year Exchange rate (rupees per US$)
1952 5.000
1970 7.576
1975 8.409
1980 7.887
1985 12.369
1990 17.504
1995 32.427
2000 45.000
2006 48.336
2007 (Oct) 38.48
2008 (June) 42.51
2008 (Oct) 48.88
2009 (Oct) 46.37
2010 (Jan 22) 46.21
2011 (April) 44.17
2011 (Sept 21) 48.24
2011 (Nov 17) 50.97

68. Gold Price history
68
Gold World GDP Trade Weighted US
Year DJIA USD[5] US Debt USD bn[7]
USD/ozt[4] USD tn[6] dollar Index[8]
1970 37 839 3.3 370
1975 140 852 6.4 533 33.0
1980 590 964 11.8 908 35.7
1985 327 1,547 13.0 1,823 68.2
1990 391 2,634 22.2 3,233 73.2
1995 387 5,117 29.8 4,974 90.3
2000 273 10,787 31.9 5,662 118.6
2005 513 10,718 45.1 8,170 111.6
2010 1,410 11,578 63.2 14,025 99.9
1970 to 2010 net change, %
3,792 1,280 ... 3,691
1975 (post US off gold standard) to 2010 net change, %
929 1,259 ... 2,531
On August 22, 2011 gold reached a new record high of $ 1908.00 at the London Gold Fixing

69. 69
Acquisition and Transfer of
Immovable Property
FEMA Act imposes certain regulations
and restrictions for purchase and
transfer of properties in India, by
persons resident outside India.

70. A. Non-Resident Indian (NRI)
70
 (i) Purchase of immovable property
A NRI can acquire by way of purchase any
immovable property (other than agricultural land/
plantation property / farm house).
 (ii) Transfer of immovable property
A NRI can transfer any immovable property in
India to a person resident in India. He may transfer
any immovable property (other than agricultural land/
plantation property / farm house) to an Indian Citizen
resident outside India or a PIO resident outside India.

71. 71
 (iii) Payment for acquisition of Immovable Property
by way of inward remittances through Bank challans
or debit to NRE / FCNR(B) / NRO.
 (iv) Payment by travellers cheques and currency notes
prohibited.
 (v) NRI, who has purchased residential or commercial
property under the general permission, no documents
to be given to RBI.

72. Gift / Inheritance of Immovable Property
72
 A PIO may acquire by way of gift from a person
resident in India or a NRI or a PIO.
 This acquisition can also be by inheritance or
settlement.

73. Repatriation of sale proceeds of
immovable property
73
 Provided the acquisition requirements are met,
immovable property sold can be repatriated in
foreign exchange through banks. Same position
for inheritances and legacy.
 A NRI / PIO can take out upto US$ 1 million in
one financial year, out of those funds.
 Proper documentation necessary and income
tax settlement is also necessary and clearance.

74. 74
Questions?