Notification No. FEMA/219/2011-RB/G.S.R. 491(E),
In exercise of the powers conferred by clause (b) of section 9 and clause (e) of sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following amendments to the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000 (Notification No. FEMA 10/2000-RB, dated May 3, 2000), namely :—
1. Short title and commencement.—
(i) These Regulations may be called the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) (Amendment) Regulations, 2011.
(ii) They shall be deemed to have come into force with effect from February 13, [email protected]
2. Amendment of the Regulations.—
In the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000, dated May 3, 2000 as amended from time to time, viz. :
(a) in regulation 4 the word “Schedule” shall be amended to read as “Schedule-I”,
(b) in regulation 6 after sub-regulation (4) the following sub-regulation shall be added namely :—
“(4) An Authorized Dealer Category-I Banks in India may allow firms and companies who comply with the eligibility criteria stipulated in the Foreign Trade Policy of the Government of India, in force from time to time and the directions as may be issued by Reserve Bank of India, from time to time, to open, hold and maintain Diamond Dollar Accounts (DDAs) in India subject to the terms and conditions of the DDA Scheme specified in Schedule II.”
[See sub-regulation (4) of regulation 6]
Diamond Dollar Account (DDA) Scheme
1. Firms and companies may open and maintain DDA with AD Category-1 banks, subject to the following terms and conditions :—
(a) The exporter should comply with the eligibility criteria stipulated in the Foreign Trade Policy of the Government of India, issued from time to time.
(b) The DDA shall be opened in the name of the exporter and maintained in US Dollars only.
(c) The account shall only be in the form of current account and no interest should be paid on the balance held in the account.
(d) No intra-account transfer should be allowed between the DDAs maintained by the account holder.
(e) An exporter firm/company shall be permitted to open and maintain not more than 5 DDAs.
(f) The balances held in the accounts shall be subject to Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements.
(g) Exporter firms and companies maintaining foreign currency accounts, excluding EEFC accounts, with banks in India or abroad, are not eligible to open Diamond Dollar Accounts.
(h) The transactions in the DDA would be as under :
2. Permissible credits :—
(i) Amount of pre-shipment and post-shipment finance availed in US Dollars.
(ii) Realisation of export proceeds from shipments of rough, cut, polished diamonds and diamond studded jewellery.
(iii) Realisation in US Dollars from local sale of rough, cut and polished diamonds.
3. Permissible debits :—
(i) Payment for import/purchase of rough diamonds from overseas/ local sources.
(ii) Payment for purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery from local sources.
(iii) Payment for import/purchase of gold from overseas/nominated agencies and repayment of US Dollars loans availed from the bank.
(iv) Transfer to rupee account of the exporter.
The above transactions are subject to the provisions of the Foreign Trade Policy of Government of India, issued from time to time.
4. Application procedure :—
The exporter firm/company shall make an application in the format annexed to the AD Category-I bank for opening of the DDA. AD Category-I banks should assess the track record of the firm/company at the end of every licensing year (April-March). In case any firm/company fails to meet the eligibility criteria, the account may be closed immediately.
5. AD Category-I banks shall submit a monthly report to the Chief General Manager-in-Charge, Foreign Exchange Department, Reserve Bank of India, Trade Division, Amar Building, Mumbai-400 001, giving details of the name and address of the firm/company in whose name the Diamond Dollar Account is opened, along with the date of opening/closing the Diamond. Dollar Account, by the 10th of the following month to which it relates.
Application for opening diamond dollar accounts
The Branch Manager
(name and address of AD bank/branch)
We are dealing in purchase/sale of rough or cut and polished diamonds/precious metal jewellery plain, minakari and/or studded with/without diamond and/or other stones, with a track record of at least 2 years in import/export of diamonds/coloured gemstones/diamond and coloured gemstones studded jewellery/plain gold jewellery, and having an average annual turnover of Rs. 3 crore or above during preceding three licensing years.
2. We wish to open a current account/s under the Diamond Dollar Account Scheme with your bank in accordance with the provisions of (mention the relevant paragraph) of the Foreign Trade Policy (period, e.g., 2009-2014) of the Government of India read with the Handbook of Procedures (mention the relevant Volume No.) issued by Ministry of Commerce and Industry, Government of India.
3. The relevant particulars are furnished below :
(i) Name of the Firm/Company :
(ii) Address of the Registered Office :
(iii) Principal business :
(iv) IE Code No. :
(v) Annual Turnover of the last two years (enclose certificate of CA) :
(vi) Details of the EEFC account, if any :
4. We confirm that we are not maintaining any foreign currency account, excluding EEFC account, with banks in India or abroad.
5. We declare that we are not maintaining more than 5 DDAs including the one proposed to be opened with your branch.
6. We declare that we are neither on the caution list of exporters of Reserve Bank of India nor on the defaulters list of Export Credit Guarantee Corporation of India Ltd. (ECGC).
7. We undertake to abide by the rules of the Diamond Dollar Account Scheme framed/to be framed from time to time and the terms and conditions stipulated for opening and maintenance of the DDA with your bank and any other foreign exchange/foreign trade regulation of Reserve Bank of India/Government of India.
We request you to open a Diamond Dollar Account/s in the name of the firm/company.
(Signature of the Authorized Official of the firm/company)
Seal of firm/company :
@ It is clarified that no person will be adversely affected as a result of retrospective effect being given to these regulations.