APPENDIX I
FOREIGN EXCHANGE REGULATION ACT, 1973
[As amended by the Foreign Exchange Regulation (Amendment) Act, 1993]
FOREIGN EXCHANGE REGULATION ACT, 1973
(46 of 1973)
[As amended by the Foreign Exchange Regulation (Amendment) Act, 1993]
(29 of 1993)
An Act to consolidate and amend the law regulating certain payments, dealings in
foreign exchange and securities, transactions indirectly affecting foreign
exchange and the import and export of currency, for the conservation of the
foreign exchange resources of the country and the proper utilisation thereof in
the interests of the economic development of the country.
BE it enacted by Parliament in the Twenty-fourth Year of the Republic of India as follows :-
Short title, extent, application and commencement
-
- This Act may be called the Foreign Exchange Regulation Act, 1973.
- It extends to the whole of India.
- It applies also to all citizens of India outside India and to branches and
agencies outside India of companies or bodies corporate, registered or
incorporated in India.
- It shall come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint in this behalf:
Provided that different dates may be appointed for different provisions of this
Act and any reference in any such provision to the commencement of this Act
shall be construed as a reference to the coming into force of that provision.
- In this Act, unless the context otherwise requires, -
- Appellate Board" means the Foreign Exchange Regulation Appellate Board
constituted by the Central Government under sub-section(1)of section 52;
- authorised dealer" means a person for the time being authorised under
section 6 to deal
in foreign exchange;
- bearer certificate" means a certificate of title to securities by the
delivery of which (with or without endorsement) the title to the securities is
transferable;
- certificate of title to a security" means any document used in the ordinary
course of business as proof of the possession or control of the security, or authorising or purporting to authorise, either by an endorsement or by delivery,
the possessor of the document to transfer or receive the security thereby
represented;
- coupon" means a coupon representing dividends or interest on a security;
The provisions of F.E.R. (Amendment) Act, 1993 (hereafter referred to as Act 29
of 1993) came into force on the 8th day of January 1993.
- currency" includes all coins, currency notes, banks notes, postal notes,
postal orders, money orders, cheques, drafts, traveller's cheques, letters of
credit, bills of exchange and promissory notes;
- foreign currency" means any currency other than Indian currency;
- foreign exchange" means foreign currency and includes -
- all deposits, credits and balances payable in any foreign currency, and any
drafts, traveller's cheques, letters of credit and bills of exchange, expressed
or drawn in Indian currency but payable in any foreign currency;
- any instrument payable, at the option of the drawee or holder thereof or
any other party thereto, either in Indian currency or in foreign currency or
partly in one and partly in the other;
- foreign security" means any security created or issued elsewhere than in
India, and any security the principal of or interest on which is payable in any
foreign currency or elsewhere than in India;
- Deleted by Act 29 of 1993
- Indian currency" means currency which is expressed or drawn in Indian
rupees but does not include special bank notes and special one-rupee notes
issued under section 28A of the Reserve Bank of India Act, 1934;
- Indian custom waters" means the waters extending into the sea to a distance
of twelve nautical miles measured from the appropriate base line on the coast of
India and includes any bay, gulf, harbour, creek or tidal river;
- money-changer" means a person for the time being authorised under section 7
to deal in foreign currency;
- overseas market", in relation to any goods, means the market in the country
outside India and in which such goods are intended to be sold;
- owner, in relation to any security, includes any person who has power to
sell or transfer the security, or who has the custody thereof or who receives,
whether on his own behalf or on behalf of any other person, dividends or
interest thereon, and who has any interest therein, and in a case where any
security is held on any trust or dividends or interest thereon are paid into a
trust fund, also includes any trustee or any person entitled to enforce the
performance of the trust or to revoke or vary, with or without the consent of
any other person, the trust or any terms thereof, or to control the investment
of the trust moneys;
- person resident in India" means -
- a citizen of India, who has, at any time after the 25th day of March, 1947,
been staying in India but does not include a citizen of India who has gone out
of, or stays outside, India, in either case--
- for or on taking up employment outside India,
or
- for carrying on outside India a business or vocation outside India,
or
- for any other purpose, in such circumstances as would indicate his intention
to stay outside India for an uncertain period;
- a citizen of India, who having ceased by virtue of paragraph (a) or
paragraph (b) or paragraph (c) of sub-clause (I) to be resident in India,
returns to, or stays in, India, in either case -
- for or on taking up employment in India,
or
- for carrying on in India a business or vocation in India,
or
- for any other purpose, in such circumstances as would indicate his intention
to stay in India for an uncertain period;
- a person, not being a citizen of India, who has come to, or stays in,
India, in either case -
- for or on taking up employment in India,
or
- for carrying on in India a business or vocation in India,
or
- for staying with his or her spouse, such spouse being a person resident in
India,
or
- for any other purposes, in such circumstances as would indicate his
intention to stay in India for an uncertain period;
- a citizen of India, who, not having stayed in India at any time after the
25th day of March, 1947, comes to India for any of the purposes referred to in
paragraphs (a), (b) and (c) of sub-clause (iii) or for the purpose and in the
circumstances referred to in paragraph (d) of that sub-clause or having come to
India stays in India for any such purpose and in such circumstances.
Explanation - A person, who has, by reason only of paragraph (a) or paragraph
(b) or paragraph (d) of sub-clause (iii) been resident in India, shall, during
any period in which he is outside India, be deemed to be not resident in India;
- person resident outside India" means a person who is not resident in India;
- precious stone" includes pearl and semi-precious stone and such other stone
or gem as the Central Government may for the purposes of this Act, notify in
this behalf in the Official Gazette;
- prescribed" means prescribed by rules made under this Act;
- Reserve Bank" means the Reserve Bank of India;
- "security" means shares, stocks, bonds, debentures, debenture stock,
Government securities as defined in the Public Debt Act, 1944, savings
certificates to which the Government Savings Certificates Act, 1959 applies,
deposit receipts in respect of deposits of securities, and units or sub-units of
unit trusts and includes certificates of title to securities, but does not
include bills of exchange or promissory notes other than Government promissory
notes;
- Deleted by Act 29 of 1993
- "transfer", in relation to any security, includes
transfer by way of loan or security.
Classes of officers of Enforcement
- There shall be the following classes of officers of Enforcement, namely:-
- Directors of Enforcement;
- Additional Directors of Enforcement;
- Deputy Directors of Enforcement;
- Assistant Directors of Enforcement;
and
- such other class of officers of Enforcement as may be appointed for the
purposes of this
Act.
Appointment and powers of officers of Enforcement
-
- The Central Government may appoint such persons as it thinks fit to be
officers of
Enforcement.
- Without prejudice to the provisions of sub-section (1), the Central
Government may authorise a Director of Enforcement or an Additional Director of
Enforcement or a Deputy Director of Enforcement or an Assistant Director of
Enforcement to appoint officers of Enforcement below the rank of an Assistant
Director of Enforcement.
- Subject to such conditions and limitations as the Central Government may
impose, an officer of Enforcement may exercise the powers and discharge the
duties conferred or imposed on him under this Act.
- Entrustment of functions of Director
- The Central Government may, by order and subject to such conditions and
limitations as it thinks fit to impose, authorise any officer of customs or any
Central Excise Officer or any police officer or any other officer of the Central
Government or a State Government to exercise such of the powers and discharge
such of the duties of the Director of Enforcement or any other officer of
Enforcement under this Act as may be specified in the order.
Authorised dealers in foreign exchange
-
- The Reserve Bank may, on an application made to it in this behalf, authorise any person to deal in foreign exchange.
- An authorisation under this section shall be in writing and -
- may authorise transactions of all descriptions in foreign currencies or may
be restricted to authorising dealings in specified foreign currencies only;
- may authorise dealings in all foreign currencies or may be restricted to
authorising specified transactions only;
- may be granted to be effective for a specified period, or within specified
amounts;
- may be granted subject to such conditions as may be specified therein.
- Any authorisation granted under sub-section (1) may be revoked by the
Reserve Bank at any time if the Reserve Bank is satisfied that, -
- (i) it is in the public interest to do so;
or
- the authorised dealer has not complied with the conditions subject to which
the authorisation was granted or has contravened any of the provisions of this
Act or of any rule, notification, direction or order made thereunder:
Provided that no such authorisation shall be revoked on the ground specified in
clause (ii) unless the authorised dealer has been given a reasonable opportunity
for making a representation in the matter.
- Any authorised dealer shall, in all his dealings in foreign exchange and in
the exercise and discharge of the powers and of the functions delegated to him
under section 74, comply with such general or special directions or instructions
as the Reserve Bank may, from time to time, think fit to give, and, except with
the previous permission of the Reserve Bank, an authorised dealer shall not
engage in any transaction involving any foreign exchange which is not in
conformity with the terms of his authorisation under this section.
- An authorised dealer shall, before undertaking any transaction in foreign
exchange on behalf of any person, require that person to make such declarations
and to give such information as will reasonably satisfy him that the transaction
will not involve, and is not designed for the purpose of, any contravention or
evasion of the provisions of this Act or of any rule, notification, direction or
order made thereunder, and where the said person refuses to comply with any such
requirement or makes only unsatisfactory compliance therewith, the authorised
dealer shall refuse to undertake the transaction and shall, if he has reason to
believe that any such contravention or evasion as aforesaid is contemplated by
the person, report the matter to the Reserve Bank.
- Money-changers
-
- The Reserve Bank may, on an application made to it in this behalf, authorise any person to deal in foreign currency.
- An authorisation under this section shall be in writing and -
- may authorise dealings in all foreign currencies or may be restricted to
authorising dealings in specified foreign currencies only;
- may authorise transactions of all descriptions in foreign currencies or may
be restricted to authorising specified transactions only;
- may be granted with respect to a particular place where alone the money
changer shall carry on his business;
- may be granted to be effective for a specified period, or within specified
amounts;
- may be granted subject to such conditions as may be specified therein.
- Any authorisation granted under sub-section (1) may be revoked by the
Reserve Bank at any time if the Reserve Bank is satisfied that -
- it is in the public interest to do so;
or
- the money-changer has not complied with the conditions subject to which the authorisation was granted or has contravened any of the provisions of this Act
or of any rule, notification, direction or order made thereunder:
Provided that no such authorisation shall be revoked on the ground specified in
clause (ii) unless the money-changer has been given a reasonable opportunity for
making a representation in the matter.
- The provisions of sub-sections (4) and (5) of section 6 shall, in so far as
they are applicable, apply in relation to a money-changer as they apply in
relation to an authorised dealer.
Explanation - In this section, "foreign currency" means foreign currency in the
form of notes, coins or traveller's cheques and "dealing" means purchasing
foreign currency in the form of notes, coins or traveller's cheques or selling
foreign currency in the form of notes or coins.
- Restrictions on dealing in foreign exchange
- Except with the previous general or special permission of the Reserve
Bank, no person other than an authorised dealer shall in India, and no person
resident in India other than an authorised dealer shall outside India, purchase
or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to
or exchange with, any person not being an authorised dealer, any foreign
exchange:
Provided that nothing in this sub-section shall apply to any purchase or sale of
foreign currency effected in India between any person and a money-changer.
Explanation - For the purposes of this sub-section, a person, who deposits
foreign exchange with another persons or opens an account in foreign exchange
with another person, shall be deemed to lend foreign exchange to such other
person.
- Except with the previous general or special permission of the Reserve Bank,
no person, whether an authorised dealer or a money-changer or otherwise, shall
enter into any transaction which provides for the conversion of Indian currency
into foreign currency or foreign currency into Indian currency at rates of
exchange other than the rates for the time being authorised by the Reserve Bank.
- Where any foreign exchange is acquired by any person, other than an authorised dealer or a money-changer, for any particular purpose, or where any
person has been permitted conditionally to aquire foreign exchange, the said
person shall not use the foreign exchange so acquired otherwise than for that
purpose or, as the case may be, fail to comply with any condition to which the
permission granted to him is subject, and where any foreign exchange so acquired
cannot be so used or the conditions cannot be complied with, the said person
shall, within a period of thirty days from the date on which he comes to know
that such foreign exchange cannot be so used or the conditions cannot be
complied with, sell the foreign exchange to an authorised dealer or to a
money-changer.
- For the avoidance of doubt, it is hereby declared that where a person
acquires foreign exchange for sending or bringing into India any goods but sends
or brings no such goods or does not send or bring goods of a value representing
the foreign exchange acquired, within a reasonable time or sends or brings any
goods of a kind, quality or quantity different from that specified by him at the
time of acquisition of the foreign exchange, such person shall, unless the
contrary is proved, be presumed not to have been able to use the foreign
exchange for the purpose for which he acquired it or, as the case may be, to
have used the foreign exchange so acquired otherwise than for the purposes for
which it was acquired.
- Nothing in this section shall be deemed to prevent a person from buying from
any post office, in accordance with any law or rules made thereunder for the
time being in force, any foreign exchange in the form of postal orders or money
orders.
- Restrictions on payments
- Save as may be provided in and in accordance with any general or special
exemption from the provisions of this sub-section which may be granted
conditionally or unconditionally \by the Reserve Bank, no person in, or resident
in, India shall -
- make any payment to or for the credit of any person resident outside India;
- receive, otherwise than through an authorised dealer, any payment by order
or on behalf of any person resident outside in India.
Explanation - For the purposes of this clause, where any person in, or resident
in, India receives any payment by order or on behalf of any person resident
outside India through any other person (including an authorised dealer) without
a corresponding inward remittance from any place outside India, then, such
person shall be deemed to have received such payment otherwise than through an
authorised dealer;
- draw, issue or negotiate any bill of exchange or promissory note or
acknowledge any debt, so that a right (whether actual or contingent) to receive
a payment is created or transferred in favour of any person resident outside
India;
- make any payment to, or for the credit of, any person by order or on behalf
of any person resident outside India;
- place any sum to the credit of any person resident outside India;
- make any payment to, or for the credit of, any person or receive any payment
for, or by order or on behalf of, any person as consideration for or in
association with -
- the receipt by any person of a payment or the acquisition by any person of
property outside India,
- the creation or transfer in favour of any person of a right (whether actual
or contingent) to receive payment or acquire property outside India;
- draw, issue or negotiate any bill of exchange or promissory note, transfer
any security or acknowledge any debt, so that a right (whether actual or
contingent) to receive a payment is created or transferred in favour of any
person as consideration for or in association with any matter referred to in
clause (f).
- Nothing in sub-section (1) shall render unlawful -
- the making of any payment already authorised either with foreign exchange
obtained from an authorised dealer or a money-changer under section 8 or with
foreign exchange retained by a person in pursuance of an authorisation granted
by the Reserve Bank;
- the making of any payment with foreign exchange received by way of salary or
payment for services not arising from any business in, or anything done while
in, India.
- Save as may be provided in, and in accordance with, any general or special
exemption from the provisions of this sub-section, which may be granted
conditionally or unconditionally by the reserve Bank, no person shall remit or
cause to be remitted any amount from any foreign country into India except in
such a way that the remittance is received in India only through an authorised
dealer.
- Nothing in this section shall restrict the doing by any person of anything
within the scope of any authorisation or exemption granted under this Act.
- For the purposes of this section and section 19, "security" includes coupons
or warrants representing dividends or interest and life or endownment insurance
policies.
- Blocked accounts
- Where an exemption from the provisions of section 9 is granted by the
Reserve Bank in respect of payment of any sum to any person resident outside
India and the exemption is made subject to the condition that the payment is
made to a blocked account -
- the payment shall be made to a blocked account in the name of that person in
such manner as the Reserve Bank may, by general or special order, direct;
- the crediting of that sum to that account shall, to the extent of the sum
credited, be a good discharge to the person making the payment.
- No sum standing at the credit of a blocked account shall be drawn on except
in accordance with any general or special permission which may be granted
conditionally or otherwise by the Reserve Bank.
- In this section, "blocked account" means an account opened, whether before
or after the commencement of this Act, as a blocked account at any office or
branch in India of a bank authorised in this behalf by the Reserve Bank, or an
account blocked, whether before or after such commencement, by order of the
Reserve Bank.
- Deleted by Act 29 of 1983
- Deleted by Act 29 of 1993
- Restrictions on import and export of certain currency
- The Central Government may, by notification in the Official Gazette,
order that, subject to such exemption, if any, as may be specified in the
notification, no person shall, except with the general or special permission of
the Reserve Bank and on payment of the fee, if any, prescribed, bring or send
into India any foreign exchange or any Indian currency.
Explanation - For the purposes of this sub-section, the bringing or sending into
any port or place in India of any such article as aforesaid intended to be taken
out of India without being removed from the ship or conveyance in which it is
being carried shall nonetheless be deemed to be a bringing, or, as the case may
be, sending, into India of that article.
- No person shall, except with the general or special permission of the
Reserve Bank or the written permission of a person authorised in this behalf by
the Reserve Bank, take or send out of India any Indian currency or foreign
exchange other than foreign exchange obtained by him from an authorised dealer
or from a money-changer.
- Acquisition by Central Government of foreign exchange
The Central Government may, by notification in the Official Gazette, order
every person in, or resident in, India -
- who owns or holds such foreign exchange as may be specified in the
notification, to offer it, or cause it to be offered, for sale to the Reserve
Bank on behalf of the Central Government or to such person, as the Reserve Bank
may authorise for the purpose, at such price as the Central Government may fix,
being a price which is not less than the price calculated at the rate of
exchange for the time being authorised by the Reserve Bank;
- who is entitled to assign any right to receive such foreign exchange as may
be specified in the notification, to transfer that right to the Reserve Bank on
behalf of the Central Government on payment of such consideration therefor as
the Central Government may fix having regard to the rate for the time being
authorised by the Reserve Bank in pursuance of sub-section (2) of section 8 for
conversion into Indian currency of the foreign currency in which such foreign
exchange is expressed:
Provided that the Central Government may, by the said notification or by a
separate order, except any person or class of persons from the operation of the
order made in the said notification:
Provided further that nothing in this section shall apply to any foreign
exchange acquired by a person from an authorised dealer or from a money-changer
and retained by him with the permission of the Reserve Bank for any purpose.
- Deleted by Act 29 of 1993
- Duty of persons entitled to receive foreign exchange
- No person who has a right to receive any foreign exchange or to receive
from a person resident outside India a payment in rupees shall, except with the
general or special permission of the Reserve Bank, do or refrain from doing
anything, or take or refrain from taking any action, which has the effect of
securing -
- that the receipt by him of the whole or part of that foreign exchange or
payment is delayed,
or
- that the foreign exchange or payment ceases in whole or in part to be
receivable by him.
- Where a person has failed to comply with the requirements of sub-section (1)
in relation to any foreign exchange or payment in rupees, the Reserve Bank may
give to him such directions as appear to be expedient for the purposes of
securing the receipt of the foreign exchange or payment, as the case may be.
- Deleted by Act 29 of 1993
- Payment for exported goods
-
- The Central Government may, by notification in the Official Gazette,
prohibit the taking or sending out by land, sea or air (hereafter in this
section referred to as export) of all goods or of any goods or class of goods
specified in the notification from India directly or indirectly to any place so
specified unless the exporter furnishes to the prescribed authority a
declaration in the prescribed form supported by such evidence as may be
prescribed or so specified and true in all material particulars which, among
others, shall include the amount representing -
- the full export value of the goods;
or
- if the full export value of the goods is not ascertainable at the time of
export, the value which the exporter, having regard to the prevailing market
conditions, expects to receive on the sale of the goods in the overseas market,
and affirms in the said declaration that the full export value of the goods
(whether ascertainable at the time of export or not) has been, or will within
the prescribed period be, paid in the prescribed manner.
- If the Central Government is of opinion that it is necessary or expedient in
the public interest so to do, it may, by notification in the Official Gazette,
specify any goods, from among those goods to which a notification under clause
(a) applies, and direct that in respect of the goods so specified, where an
exporter makes a declaration under sub-clause (ii) of clause (a) of the value
which he, having regard to the prevailing market conditions expects to receive
on the sale of such goods in the overseas market, he shall not, except with the
permission of the Reserve Bank on an application made to the Reserve Bank by the
exporter in this behalf, authorise or permit or allow or in any manner be a
party to, the sale of such goods for a value less than that declared:
Provided that no permission shall be refused by the Reserve Bank under this
clause unless the exporter has been given a reasonable opportunity for making a
representation in the matter:
Provided further that where the exporter makes an application to the Reserve
Bank for permission under this clause and the Reserve Bank does not, within a
period of twenty days from the date of receipt of the application, communicate
to the exporter that permission applied for has been refused, it shall be
presumed that Reserve Bank has granted such permission.
Explanation - In computing the period of twenty days for the purposes of the
second proviso, the period, if any, taken by the Reserve Bank for giving an
opportunity to the exporter for making a representation under the first proviso
shall be excluded.
- Where any export of goods, to which a notification under clause (a) of
sub-section (1) applies, has been made, no person shall, except with the
permission of the Reserve Bank, do or refrain from doing anything, or take or
refrain from taking any action, which has the effect of securing -
- in a case falling under sub-clause (i) or sub-clause (ii) of clause (a) of
sub-section (1), -
- that payment for the goods -
- is made otherwise than in the prescribed manner,
or
- is delayed beyond the
period prescribed under clause (a) of sub-section
(1) or
- that the proceeds of sale of the goods exported do not represent the full
export value of the goods subject to such deductions, if any, as may be allowed
by the Reserve Bank;
and
- in a case falling under sub-clause (ii) of clause (a) of sub-section (1),
also that the sale of the goods is delayed to an extent which is unreasonable
having regard to the ordinary course of trade:
Provided that no proceedings in respect of any contravention of the provisions
of this sub- section shall be instituted unless the prescribed period has
expired and payment for the goods representing the full export value has not
been made in the prescribed manner within the prescribed period.
- Where in relation to any goods to which a notification under clause (a) of
sub-section (1) applies the prescribed period has expired and payment therefor
has not been made as aforesaid, it shall be presumed, unless the contrary is
proved by the person who has sold or is entitled to sell the goods or to procure
the sale thereof, that such person has not taken all reasonable steps to receive
or recover the payment for the goods as aforesaid and he shall accordingly be
presumed to have contravened the provisions of sub-section (2).
- Where in relation to any goods to which a notification under clause (a) of
sub-section (1) applies the prescribed period has expired and payment therefor
has not been made as aforesaid, the Reserve Bank may give to any person who has
sold the goods or who is entitled to sell the goods or procure the sale thereof,
such directions as appear to it to be expedient for the purpose of securing -
- if the goods have been sold, the payment therefor,
or
- if the goods have not been sold, either the sale of the goods and payment therefor as aforesaid, or the re-import of the goods into India as the
circumstances permit,
within such period as the Reserve Bank may specify in this behalf and without
prejudice to the generality of the foregoing provision, may direct that the
goods, the right to receive the payment therefor or any other right to enforce
such payment shall be transferred or assigned to the Central Government or to a
person specified in the directions.
- Where any goods or a right to receive payment or any other right to enforce
such payment, are or is transferred or assigned in accordance with sub-section
(4), the Central Government shall pay to the person transferring or assigning
the same, the amount recovered by or on behalf of the Central Government in
respect of the goods, after deducting all costs, charges and expenses incurred
by the Central Government in selling the goods or in recovering or realising the
amount in respect of such goods.
- Without prejudice to the provisions of sub-section(1), where the value of
the goods specified in the declaration furnished under that sub-section is less
than the amount which in the opinion of the Reserve Bank, in a case falling
under sub-clause (i) of clause (a) of that sub-section, represents the full
export value of those goods, or in a case falling under sub-clause (ii) of that
clause, the value which the exporter can, having regard to the prevailing market
conditions, expect to receive on the sale of the goods in the overseas market,
the Reserve Bank may issue an order requiring the person holding the shipping
documents to retain possession thereof until such time as the exporter of the
goods has made arrangements for the Reserve Bank or a person authorised by the
Reserve Bank to receive on behalf of the exporter payment in the prescribed
manner of an amount which in the opinion of the Reserve Bank represents the full
export value of such goods or the value which the exporter, having regard to
theprevailing market conditions, can be expected to receive on the sale of the
goods in the overseas market.
- For the purpose of ensuring compliance with provisions of this section and
any order or direction made thereunder, the Reserve Bank or the prescribed
authority referred to in sub-section (1) may require any person making any
export of goods to which a notification under clause (a) of that sub-section
applies to exhibit contracts with his foreign buyer or other evidence to show
that the full export value of the goods, or, as the case may be, the value which
the exporter, having regard to the prevailing market conditions, expects to
receive on the sale of the goods in the overseas market, has been, or will
within the prescribed period be, paid in the prescribed manner.
- Without prejudice to the provisions of sub-section (1), where the Reserve
Bank has permitted any authorised dealer to accept for negotiation or collection
of shipping documents covering exports from his constituent [not being a person
who has signed the declaration in terms of sub-section (1)], such authorised
dealer shall, before accepting such documents for negotiation or collection,
require the constituent concerned also to sign such declaration and thereupon
such constituent shall be bound to comply with such requisition and the original
declarant and such constituent signing the declaration shall each be considered
to be the exporter for the purposes of this section, and shall be governed by
the provisions thereof accordingly.
- Without prejudice to the provisions of sub-section (1), in relation to
export of goods to which a notification under clause (a) of that sub-section
applies, the Reserve Bank may, for the purpose of ensuring that the full export
value of the goods or, as the case may be, the value which the exporter, having
regard to the prevailing market conditions, expects to receive on the sale of
the goods in the overseas market, is received in proper time or without delay,
by general or special order, direct from time to time, that in respect of export
of goods to any destination or any class of export transactions or any class of
goods or class of exporters, the exporter shall, prior to the export of the
goods, comply with any or all of the following conditions as may be specified in
the order, namely:-
- that any contract or other arrangement for the sale of the goods shall be
registered in such manner and with such authority or organisation as may be
specified in the order;
- that the payment for the goods is covered by an irrevocable letter of credit
or by such other arrangement or document as may be specified in the order;
- that a copy of the declaration to be furnished to the prescribed authority
under sub-section(1) shall be submitted to such authority or organisation as may
be specified in the order for certifying that the value of the goods specified
in such declaration represents the proper value thereof;
- that any declaration to be furnished to the prescribed authority under
sub-section (1) shall be submitted to the Reserve Bank for its prior approval,
which may, having regard to the circumstances, be given or withheld or may be
given subject to such conditions as the Reserve Bank may deem fit to impose:
Provided that no approval shall be withheld by the Reserve Bank under this
clause unless the exporter has been given a reasonable opportunity for making a
representation in the matter.
- Where the Central Government is of opinion that, in respect of any goods or
class of goods or class of exporters, or in respect of export to any
destination, the practice of exporting goods in accordance with any term to the
effect that the goods will be sold on account of the exporter and the account of
such sales rendered to the exporter has resulted or is likely to result in the
full export value of the goods not being brought into India in the prescribed
manner or within the prescribed period, it may, by general or special order,
prohibit the export, in accordance with such term, of such goods or class of
goods or by such exporters or to such destination.
Payment for lease, hire or other arrangement
-
- No person shall, except with the general
or special permission of the Reserve Bank, take or send out by land, sea
or air any goods from India to any place on lease or hire or under any
arrangement other than sale or disposal in any other manner of such
goods.
- Regulation of export and transfer of securities
- Notwithstanding anything contained in section 81 of the
Companies Act, 1956, no person shall, except with the general or special
permission of the Reserve Bank, --
- take or send any security to any place
outside India;
- transfer any security, or create or transfer any
interest in a security, to or in favour of a person resident outside
India;
- Deleted by Act 29 of 1993;
- issue, whether in India or elsewhere, any
security which is registered or to be registered in India, to a
person resident outside India;
- acquire, hold or dispose of any foreign
security.
- Where the holder of a security is a nominee, neither he nor
any person through whose agency the exercise of all or any of the
holder's rights in respect of the security is controlled shall, except
with the general or special permission of the Reserve Bank, do any act,
whereby he recognises or gives effect to the substitution of another
person as the person from whom he directly receives instructions, unless
both the person previously instructing and the person substituted for
that person were, immediately before the substitution, resident in
India.
- The Reserve Bank may, for the purpose of securing that the
provisions of this section are not evaded, require that the person
transferring any security and the person to whom such security is
transferred shall subscribe to a declaration that the transferee is not
resident outside India.
- Notwithstanding anything contained in any other law, no person
shall, except with the permission of the Reserve Bank, -
- enter any transfer of securities in any
register or book in which securities are registered or inscribed if
he has any ground for suspecting that the transfer involves any
contravention of the provisions of this section, or
- enter in any such register or book, in
respect of any security whether in connection with the issue or
transfer of the security or otherwise, an address outside India
except by way of substitution for any such address in the same
country or for the purpose of any transaction for which permission
has been granted under this section with knowledge that it involves
entry of the said address.
- Deleted by Act 29 of 1993
- Notwithstanding anything contained in any other law, no transfer of
any share, bond or debenture of a company registered in India made by a
person resident outside India or by a national of a foreign State to
another person resident in India shall be valid unless such transfer is
confirmed by the Reserve Bank on an application made to it in this
behalf by the transferor or the transferee.
- If the Reserve Bank is of opinion that it is necessary or expedient
in the public interest so to do, it may, by general or special
permission exempt any transfer referred to in sub-section (5) or any
class of such transfers from the operation of the provisions of that
sub-section, subject to such conditions, if any, as may be specified in
such permission.
- For the purposes of this section -
- "holder", in relation to a bearer security,
means the person having physical custody of the security; provided
that, where a bearer security is deposited with any person in a
locked or sealed receptacle from which the person with whom it is
deposited is not entitled to remove it without the authority of some
other person, that other person shall be deemed to be the holder of
the security;
- "nominee" means a holder of any security
(including a bearer security) or any coupon representing dividends
or interest who, as respects the exercise of any rights in respect
of the security or coupon, is not entitled to exercise those rights
except in accordance with the instructions given by some other
person, and a person holding a security or coupon as a nominee shall
be deemed to act as nominee for the person who is entitled to give
instructions either directly or through the agency of one or more
persons, as to the exercise by the holder of the security or coupon
of any rights in respect thereof and is not, in so doing, himself
under a duty to comply with instructions given by some other person.
- Deleted by Act 29 of 1993
- Deleted by Act 29 of 1993
- Restrictions on issue of bearer securities
Except with the general or special permission of the Reserve Bank, no person
shall, in India,and no person resident in India shall, outside India, create
or issue any bearer certificate or coupon or so alter any document that it
becomes a bearer certificate or coupon.
- Deleted by Act 29 of 1993
- Restriction on settlement etc.
No person resident in India shall, except with the general or special
permission of the Reserve Bank, settle, or make a gift of, any property so
that a person who at the time of the settlement or the making of the gift is
resident outside India, elsewhere than in the territories notified in this
behalf by the Reserve Bank, will have an interest in the property, or
exercise any power for payment in favour of a person who at the time of the
exercise of the power is resident outside India elsewhere than in such
notified territories:
Provided that any settlement or gift made or any power exercised as
aforesaid without the permission of the Reserve Bank shall not be invalid
merely on the ground that such permission has not been obtained.
- Restriction on holding of immovable property outside India
- No person resident in India shall, except with the general or
special permission of the Reserve Bank, acquire or hold or transfer or
dispose of by sale, mortgage, lease, gift, settlement or otherwise, any
immovable property situate outside India:
Provided that nothing in this sub-section shall apply to the acquisition
or transfer of any such immovable property by way of lease for a period
not exceeding five years.
- Any person resident in India and holding any immovable
property outside India at the commencement of this Act shall, before the
expiry of a period of three months from such commencement or such
further period as the Reserve Bank may allow in this behalf, declare
such holding to the Reserve Bank in such form and containing such
particulars as may be specified by the Reserve Bank.
- Deleted by Act 29 of 1993
- Nothing in this section shall apply to a national of a foreign
State.
- Certain provisions as to guarantee in respect of debt or other
obligation
Except with the general or special permission of the Central Government, or
the Reserve Bank, no person resident in India shall give a guarantee in
respect of any debt or other obligation or liability-
- of a person resident in India, and due or
owing to a person resident outside India, or
- of a person resident outside India.
- Deleted by Act 29 of 1993
- Restrictions on the appointment of certain persons and companies as
agents
- Without prejudice to the provisions of section 47 and
notwithstanding anything contained in any of other provision of this Act
or the Companies Act, 1956, a person resident outside India (whether a
citizen of India or not) or a person who is not a citizen of India but
is resident in India, or a company (other than a banking company) which
is not incorporated under any law in force in India or any branch of
such company, shall not, except with the general or special permission
of the Reserve Bank act, or accept appointment, as agent in India of any
person or company, in the trading or commercial transactions of such
person or company, or
- Where any such person or company(including its branch) as is
referred to in sub-section (1) acts or accepts appointment as such
agent, without the permission of the Reserve Bank, such acting or
appointment shall be void.
- Where any such person or company (including its branch) as is
referred to in sub- section (1) acts as, or holds the appointment of,
any such agent as is referred to in that sub-section at the commencement
of this Act, such person or company (including its branch) shall, within
a period of six months from such commencement or such further period as
the Reserve Bank may allow in this behalf, make an application to the
Reserve Bank in such form and containing such particulars as may be
specified by the Reserve Bank for permission to continue to act, as such
agent.
- On receipt of an application under sub-section (3), the Reserve Bank
may, after making such inquiry as it deems fit, either allow the
application subject to such conditions, if any, as the Reserve Bank may
think fit to impose, or reject the application:
Provided that no application shall be rejected under this sub-section
unless the parties who may be affected by such rejection have been given
a reasonable opportunity for making a representation in the matter.
- Where any application has been rejected under sub-section (4),
the acting, appointment or permission, as the case may be, shall be void
on the expiry of a period of ninety days, or such other later date as
may be specified by the Reserve Bank, from the date of receipt by the
person or company (including its branch) concerned of the communication
conveying such rejection.
- Where no application has been made under sub-section (3) by
any such person or company (including its branch) as is referred to in
sub-section (1), the Reserve Bank may, by order, direct such person or
company (including its branch) to desist from such acting on the expiry
of such period as may be specified in the direction:
Provided that no direction shall be made under this sub-section unless
the parties who may be affected by such direction have been given a
reasonable opportunity for making a representation in the matter.
- Where any direction made under sub-section (6) has not been complied
with by any person or company (including its branch), then, without
prejudice to any action that may be taken under this Act, the acting,
shall be with effect from the expiry of the period specified in the
direction.
Explanation - For the purposes of this section, -
- "agent" includes any person or company
(including its branch) who or which buys any goods with a view to
sell such goods before any processing thereof;
- "company" means any body corporate and includes
a firm or other association of individuals;
- "processing" means any art or process for
producing, preparing or making an article by subjecting any material
to a manual, mechanical, chemical, electrical or any other like
operation but does not include any process incidental or ancillary
to the completion of a manufactured product such as dividing,
pressing, compressing, packing, re-packing, labeling, re-labeling,
branding or the adoption of any such treatment as is necessary to
render such product marketable to the consumer.
- Deleted by Act 29 of 1993
- Restrictions on establishment of place of business in India
- Without prejudice to the provisions of section 28 and section
47 and notwithstanding anything contained in any other provisions of
this Act or the provisions of the Companies Act, 1956, a person resident
outside India (whether a citizen of India or not) or a person who is not
a citizen of India but is resident in India or a company (other than a
banking company) which is not incorporated under any law in force in
India or any branch of such company, shall not, except with the general
or special permission of the Reserve Bank, -
- carry on in India, or establish in India a
branch, office or other place of business for carrying on any
activity of a trading, commercial or industrial nature, other than
an activity for the carrying on of which permission of the Reserve
Bank has been obtained under Section 28; or
- acquire the whole or any part of any
undertaking in India of any person or company carrying on any trade,
commerce or industry or purchase the shares in India of any such
company.
- A company (other than a banking company) in which the
non-resident interest is more than forty per cent, shall not, except
with the general or special permission of the Reserve Bank, carry on in
India any activity relating to agriculture or plantation or acquire the
whole or any part of any undertaking in India of any person or company
carrying on any activity relating to agriculture or plantation or
purchase the shares in such company.
-
- Where any person or company (including its
branch) referred to in sub-section (1) carries on any activity
referred to in clause (a) of that sub-section at the commencement of
this Act or has established a branch, office or other place of
business for the carrying on of such activity at such commencement,
then, such person or company (including its branch) may make an
application to the Reserve Bank within a period of six months from
such commencement or such further period as the Reserve Bank may
allow in this behalf for permission to continue to carry on such
activity or to continue the establishment of the branch, office or
other place of business for the carrying on of such activity, as the
case may be.
- Every application made under clause (a) shall be
in such form and contain such particulars as may be specified by the
reserve Bank.
- Where any application has been made under
clause (a), the Reserve Bank may, after making such inquiry as it
may deem fit, either allow the application subject to such
conditions, if any, as the Reserve Bank may think fit to impose or
reject the application:
Provided that no application shall be rejected under this clause
unless the parties who may be affected by such rejection have been
given a reasonable opportunity for making a representation in the
matter.
- Where an application is rejected by the
Reserve Bank under clause (c), the person or company (including its
branch) concerned shall discontinue such activity or close down the
branch, office or other place of business established for the
carrying on of such activity, as the case may be, on the expiry of a
period of ninety days or such other later date as may be specified
by the Reserve Bank from the date of receipt by such person or
company (including its branch) of the communication conveying such
rejection.
- Where no application has been made under
clause (a) by any person or company (including its branch), the
Reserve Bank may, by order, direct such person or company (including
its branch) to discontinue such activity or to close down the
branch, office or other place of business established for the
carrying on of such activity, as the case may be, on the expiry of
such period as may be specified in the direction:
Provided that no direction shall be made under this clause unless
the parties who may be affected by such direction have been given a
reasonable opportunity for making a representation in the matter.
- Notwithstanding anything contained in sub-section (2), the
Reserve Bank may, having regard to -
- the fact that any person or company
(including its branch), referred to in sub-section (1), is carrying
on any activity referred to in clause (a) of that sub-section at the
commencement of this Act or has established a branch, office or
other place of business for the carrying on of such activity at such
commencement, in either case, in pursuance of any permission or
licence granted by the Central Government; and
- the nature of the activity which is
being, or intended to be, carried on by such person or company
(including its branch), by order, exempt -
- such person or company (including its
branch); or
- any class of such persons or companies
(including their branches), in relation to such activity as may
be specified in the order, from the operation of the provisions
of sub-section (2) subject to such conditions as may be
specified in the order:
Provided that the Reserve Bank shall not make any order under
this sub-section in a case where the activity which is being, or
intended to be, carried on is solely of a trading nature.
-
- Where at the commencement of this Act any
person or company (including its branch) referred to in sub-section
(1) holds any shares in India of any company referred to in clause
(b) of that sub-section, then, such person or company (including its
branch) shall not be entitled to continue to hold such shares unless
before the expiry of a period of six months from such commencement
or such further period as the Reserve Bank may allow in this behalf
such person or company (including its branch) has made an
application to the Reserve Bank in such form and containing such
particulars as may be specified by the Reserve Bank for permission
to continue to hold such shares.
- Where an application has been made under clause
(a), the Reserve Bank may, after making such inquiry as it may deem
fit, either allow the application subject to such conditions, if
any, as the Reserve Bank may think fit to impose or reject the
application:
Provided that no application shall be rejected under this clause
unless the parties who may be affected by such rejection have been
given a reasonable opportunity for making a representation in the
matter.
- Where an application has been rejected
under clause (b) or where no application has been made under clause
(a), the Reserve Bank may, if it is of opinion that it is expedient
so to do for the purpose of conserving the foreign exchange, direct
such person or company (including its branch) to sell or procure the
sale of such shares:
Provided that no direction shall be made under this clause unless
notice of such direction for a period of not less than ninety days
has been given to the person or company (including its branch) to be
affected by such direction.
Explanation - For the purposes of this section, -
- "company" has the same meaning as in
clause (b) of the Explanation to section 28:
- "non-resident interest" means
participation in the share capital by, or entitlement to the
distributable profits of any individual or company resident
outside India, or any company not incorporated under any law in
force in India, or any branch of such company whether resident
outside India or not.
- Prior permission of Reserve Bank required for practising profession,
etc. in India by nationals of foreign States
- No national of a foreign State shall, without the previous
permission of the Reserve Bank practise any profession or carry on any
occupation, trade or business in India in a case where such national
desires to acquire any foreign exchange (such foreign exchange being
intended for remittance outside India) out of any moneys received by him
in India by reason of the practising of such profession or the carrying
on of such occupation, trade or business, as the case may be.
- Where any national of a foreign State desires to obtain the
permission of the Reserve Bank under sub-section (1), he may make an
application to the Reserve Bank in such form, in such manner and
containing such particulars as may be prescribed.
- On receipt of an application under sub-section (2), the
Reserve Bank may, after making such inquiry as it deems fit, allow the
application subject to such conditions, if any, as it may think fit to
impose or reject the application:
Provided that no application shall be rejected under this sub-section
unless the applicant has been given a reasonable opportunity for making
a representation in the matter.
- Restriction on acquisition, holding, etc., of immovable property in
India
- No person who is not a citizen of India and no company (other
than a banking company) which is not incorporated under any law in force
in India shall, except with the previous general or special permission
of the Reserve Bank, acquire or hold or transfer or dispose of by sale,
mortgage, lease, gift, settlement or otherwise any immovable property
situate in India:
Provided that nothing in this sub-section shall apply to the acquisition
or transfer of any such immovable property by way of lease for a period
not exceeding five years.
- Any person or company referred to in sub-section (1) and
requiring a special permission under that sub-section for acquiring, or
holding, or transferring, or disposing of, by sale, mortgage, lease,
gift, settlement or otherwise any immovable property situate in India
may make an application to the Reserve Bank in such form and containing
such particulars as may be specified by the Reserve Bank.
- On receipt of an application under sub-section (2), the Reserve Bank
may, after making such inquiry as it deems fit, either grant or refuse
to grant the permission applied for:
Provided that no permission shall be refused unless the applicant has
been given a reasonable opportunity for making a representation in the
matter:
Provided further that if before the expiry of a period of ninety days
from the date on which the application was received by the Reserve Bank,
the Reserve Bank does not communicate to the applicant that the
permission applied for has been refused, it shall be presumed that the
Reserve Bank has granted such permission.
Explanation - In computing the period of ninety days for the purposes of
the second proviso, the period, if any, taken by the Reserve Bank for
giving an opportunity to the applicant for making a representation under
the first proviso shall be excluded.
- Every person and company referred to in sub-section (1)
holding at the commencement of this Act any immovable property situate
in India shall, before the expiry of a period of ninety days from such
commencement or such further period as the Reserve Bank may allow in
this behalf, make a declaration in such form as may be specified by the
Reserve Bank regarding the immovable property or properties held by such
person or