Page 52 - Banking Finance May 2019 N

RBI CIRCULAR

to their being eligible for export under the Foreign Trade Accounts by Long Term Visa (LTV)
Policy of the Government of India and whose purchase
may be agreed to be financed by the Exim Bank under holders, changes related to Special Non-
this agreement. Out of the total credit by Exim Bank Resident Rupee (SNRR) Account and
under this agreement, goods and services of the value
of at least 75 per cent of the contract price shall be Escrow Account
supplied by the Seller from India and the remaining 25 RBI/2018-19/155
per cent of goods and services may be procured by the
March 28, 2019
Seller for the purpose of the eligible contract from
outside India.
1. Attention of Authorised Dealers (ADs) is invited to the
2. The Agreement under the LoC is effective from April Foreign Exchange Management (Deposit) Regulations,
02, 2019. Under the LoC, the terminal utilization period 2016 notified vide Notification No. FEMA 5(R)/2016-RB
is 60 months after the scheduled completion date of dated April 1, 2016 and A.P.(DIR Series) Circular No.67/
the project. 2015-16[(1)/5(R)] dated May 5, 2016. The FEM
3. Shipments under the LoC shall be declared in Export (Deposit) (Amendment) Regulations 2018 i.e FEMA
Declaration Form as per instructions issued by the 5(R)(1) have since been notified by the Government of
Reserve Bank from time to time. India vide GSR No 1093(E) dated November 9, 2018
necessitating following changes to the extant
4. No agency commission is payable for export under the
instructions.
above LoC. However, if required, the exporter may use
i. Authorized Dealers may allow a Foreign Portfolio
his own resources or utilize balances in his Exchange Investor (FPI) and a Foreign Venture Capital
Earners’ Foreign Currency Account for payment of Investor (FVCI), registered with the Securities and
commission in free foreign exchange. Authorised Dealer Exchange Board of India (SEBI) to open and
Category- I (AD Category- I) banks may allow such maintain a non-interest bearing foreign currency
remittance after realization of full eligible value of account for the purpose of making investment in
export subject to compliance with the extant accordance with the Foreign Exchange
instructions for payment of agency commission. Management (Transfer or Issue of Security by a
5. AD Category – I banks may bring the contents of this Person Resident Outside India) Regulations, 2017,
circular to the notice of their exporter constituents and as amended from time to time.
advise them to obtain complete details of the LoC from ii. Authorized Dealers may open only one Non-
the Exim Bank’s office at Centre One, Floor 21, World Resident Ordinary (NRO) Account for a citizen of
Trade Centre Complex, Cuffe Parade, Mumbai 400 005 Bangladesh or Pakistan, belonging to minority
or from their website www.eximbankindia.in communities in those countries, namely Hindus,
Sikhs, Buddhists, Jains, Parsis and Christians,
6. The directions contained in this circular have been
residing in India and who has been granted a Long
issued under section 10(4) and 11(1) of the Foreign
Term Visa (LTV) by the Central Government. The
Exchange Management Act (FEMA), 1999 (42 of 1999) account will be converted to a resident account
and are without prejudice to permissions/ approvals, if
once such a person becomes a citizen of India
any, required under any other law.
within the meaning of the Citizenship Act, 1955.
This account can also be opened if such person has
Yours faithfully applied for LTV which is under consideration of the
(R K Moolchandani) Central Government, in which case, the account
Chief General Manager will be opened for a period of six months and may
be renewed at six monthly intervals subject to the
Foreign Exchange Management (Deposit) condition that the individual holds a valid visa and
Regulations, 2016 - Opening of NRO valid residential permit issued by Foreigner
Registration Office (FRO)/ Foreigner Regional

52 | 2019 | MAY | BANKING FINANCE