A.P. (DIR Series) Circular No. 42
February 4, 2016
All Category – I Authorised Dealer Banks
Settlement of Export/ Import transactions in currencies not having a direct exchange rate
Attention of Authorised Dealer Category I (AD Category – I) banks is invited to Notification No. FEMA. 14 /RB -2000, dated 3rd May 2000, as amended from time to time, dealing with manner of receipt and payment, in terms of which export proceeds for exports from India and import payments for imports to India may be received / made in any mode in accordance with the directions issued by the Reserve Bank of India to the Authorized Dealers from time to time
2. To further liberalize the procedure and facilitate settlement of export and import transactions where the invoicing is in a freely convertible currency and the settlement takes place in the currency of the beneficiary, which though convertible, does not have a direct exchange rate, it has been decided that AD Category-I banks may permit settlement of such export and import transactions (excluding those put through the ACU mechanism), subject to conditions as under:
3. The Master Direction No. 16 of 2015-16 (on Export of Goods and Services) and Master Direction No. 17 of 2015-16 (on Import of Goods and Services) have been updated accordingly to incorporate the above changes.
4. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
5. The directions contained in this circular have been issued under Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.
(B P. Kanungo)
Principal Chief General Manager