3B.5
- Document type
- Manual
- Dated
- Category
- Exchange Management Manual
Manner of Payment of Rupees against sale of Foreign Exchange
- (i)
- It is a basic understanding that when any person applies to an authorised dealer or to Reserve Bank for sale of foreign exchange to him, the foreign exchange is required for meeting his own commitments abroad or for his own use. The rupee funds against sales of foreign exchange should, therefore, be provided by the applicants themselves. Authorised dealers should, however, ensure that in all cases of sale of foreign exchange/remittance in foreign exchange equivalent to Rs.20,000/- or more, irrespective of whether remittances are made under powers delegated to authorised dealers or against Reserve Bank permits, the relative payment is received from the applicant only by a crossed cheque drawn on the applicants bank account or on the bank account of the firm/company. Authorised dealers may also accept payment in the form of a Bankers Cheque/Pay Order and/or Demand Draft. In no circumstances should payment in respect of such sale of foreign exchange/remittance in foreign exchange be accepted in cash.
- (ii)
- As an exception to the above rule, authorised dealers may sell foreign exchange equivalent to amount not exceeding Rs.50,000/- for travel abroad for business, BTQ, etc. purposes against payment in cash. Where the sale of foreign exchange to residents for the visits abroad exceeds the amount equivalent to Rs.50,000/-, the payment must be received only by a crossed cheque drawn on the applicants bank account or on the bank account of the firm/company sponsoring business visit of the applicant. Authorised dealers may also accept payment in the form of Bankers Cheque/Pay Order/Demand Draft in above cases.
- (iii)
- Where the rupee equivalent for drawing foreign exchange exceeds Rs.50,000 either for any single instalment or for more than one instalment reckoned together for a single journey/visit it should be paid by the traveller by means of a cross cheque/demand draft/pay order as stated above.
- NOTE:
- (i) This provision will also apply in the case of payments made in rupees by credit to accounts of non-resident banks or through ACU.
(ii) Where the rupee equivalent of foreign exchange drawn, in a single transaction for studies abroad is Rs.50,000 or more it should be paid by means of a crossed cheque/demand draft/pay order as stated above.