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RBI CIRCULAR

Registration Office (FRRO) concerned. The opening without prejudice to permissions / approvals, if any,
of such NRO accounts will be subject to reporting required under any other law.
of the details of the accounts opened by the Yours faithfully
concerned Authorised bank, to the Ministry of (R. K. Moolchandani)
Home Affairs (MHA) on a quarterly basis. The
report shall contain details of (i) name/s of the Chief General Manager
individual/s; (ii) date of arrival in India; (iii) Passport
No. and place/country of issue; (iv) Residential Trade Credit Policy – Revised framework
Permit/Long Term Visa reference and date & place RBI/2018-2019/140
of issue; (v) name of the FRO/FRRO concerned; (vi)
complete address and contact number of the March 13, 2019
branch where the bank account is being 1. `Attention of Authorised Dealers is invited to the rationalised
maintained. The Head Office of the AD bank shall principal regulation governing the External Commercial
furnish the above details on a quarterly basis to the Borrowings (ECB) and Trade Credits already notified on
Under Secretary (Foreigners), Ministry of Home December 17, 2018 through the Foreign Exchange
Affairs, NDCC-II Building, Jai Singh Road, New Delhi Management (Borrowing and Lending) Regulations, 2018
– 110 001. AD banks are advised to ensure strict gazetted vide Notification No. FEMA.3R/2018-RB dated
compliance to these instructions. December 17, 2018. The new ECB framework based on
iii. In terms of extant instructions, SNRR accounts the above regulation was issued on January 16, 2019 vide
cannot be held for more than seven years. It has A. P. (DIR Series) Circular No. 17. The Trade Credit
now been decided that SNRR accounts opened by framework based on the aforementioned notified
persons resident outside India may remain regulation is being issued now. Detailed instructions are set
operative beyond the stipulated period of seven out in the Annex to this circular.
years with RBI approval. Further, the restriction of 2. `Trade Credits can be raised under the automatic route
seven years will not be applicable to SNRR up to the amount specified in the Annex to this circular
accounts opened by persons resident outside India and in compliance with the other applicable norms. The
who are registered with SEBI and wish to make designated AD Category I bank while considering the
investment in India in accordance with Foreign Trade Credit proposal is expected to ensure compliance
Exchange Management (Transfer or Issue of with applicable Trade Credit guidelines by their
Security by a Person Resident Outside India) constituents. Any contravention of the applicable
Regulations, 2017, as amended from time to time. provisions will invite penal action or adjudication under
iv. The extant Schedule 5 of the Foreign Exchange the Foreign Exchange Management Act, 1999.
Management (Deposit Regulations) 2016 pertaining 3. The amended Trade Credit policy will come into force
to Escrow Accounts has been replaced to align the with immediate effect. Authorised Dealer banks may
same with the provisions of Foreign Exchange bring the contents of this circular to the notice of their
Management (Transfer or Issue of Security by a constituents and customers. The Master Direction No.
Person Resident Outside India) Regulations, 2017, 5 dated January 01, 2016 on the subject is being revised
in terms of which, Escrow Accounts can be opened to reflect the above changes.
by residents and non-residents for acquisition/ 4. The direction contained in this circular has been issued
transfer of capital instruments/convertible notes under sections 10(4) and 11(1) of the Foreign Exchange
and can also be funded by guarantee(s).
Management Act, 1999 (42 of 1999) and is without
2. AD Category – I banks may bring the contents of this prejudice to permissions /approvals, if any, required
circular to the notice of their constituents and under any other law.
customers concerned.
Yours faithfully
3. The directions contained in this circular have been Ajay Kumar Misra
issued under sections 10(4) and 11(1) of the Foreign Chief General Manager – in- Charge
Exchange Management Act, 1999 (42 of 1999) and are

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