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Authorized dealers, authorized banks, and persons resident in India must follow specified modes for receipt and payment in foreign exchange and Indian rupees for international transactions. The regulations govern trade receipts and payments involving Asian Clearing Union member countries, other foreign nations, Nepal, Bhutan, and Iran. Authorized dealers permit third-party receipts and payments for exports and imports under specific Reserve Bank guidelines. Specific exemptions allow receipts and payments through bank drafts, cards, postal orders, and special non-resident rupee accounts when transactions comply with the Foreign Exchange Management Act and foreign trade policies.
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Relative A.P. (DIR) circular: 11/20.10.2016
RESERVE BANK OF INDIA FOREIGN EXCHANGE DEPARTMENT CENTRAL OFFICE MUMBAI 400 001
Notification No. FEMA 14(R)/2016-RB May 02, 2016 (Amended upto March 04, 2020) (Amended upto November 13, 2019)
Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016
In exercise of the powers conferred by Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), and in supersession of Notification No. FEMA.14/ 2000-RB dated May 3, 2000, as amended from time to time, dealing with Manner of Receipt and Payment, Notification No. FEMA.16/2000-RB dated May 3, 2000, as amended from time to time, dealing with Receipt from and Payment to a person Resident outside India and Notification No. FEMA. 17/ 2000-RB dated May 3, 2000, as amended from time to time, dealing with Transactions in Indian Rupees with Residents of Nepal and Bhutan, the Reserve Bank of India makes the following Regulations in respect of Manner of Receipt and Payment, namely
Short title and commencement : These Regulations may be called the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016. They shall come into effect from the date of their publication in the Official Gazette.
Definitions : In these Regulations, unless the context requires otherwise, -
The words and expressions used but not defined in these Regulations shall have the same meaning respectively assigned to them in the Act.
(A) 2 Members of the Asian Clearing Union (ACU) (i) Bangladesh, Myanmar, Pakistan, Sri Lanka & Republic of Maldives - Receipt for export of eligible goods and services by debit to the ACU Dollar account and / or ACU Euro account and / or 2 ACU Japnese Yen account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the ACU Dollar account and / or ACU Euro Account and / or 2 ACU Japnese Yen account of the authorized dealer maintained with the correspondent bank in that member country; Receipt may also be made in any freely convertible currency in all other cases. In respect of exports from India to Myanmar, payment may be received in any freely convertible currency or through ACU mechanism from Myanmar. (ii) Nepal and Bhutan – Receipt may be in Rupees Receipts for export of goods to Nepal may be made in free foreign exchange, provided the importer resident in Nepal has been permitted by the Nepal Rashtra Bank to make payment in free foreign exchange. However such receipts shall not be routed through the ACU mechanism. (iii) Islamic Republic of Iran Receipt for export of eligible goods and services, in any freely convertible currency and / or in accordance with the directions issued by the Reserve Bank to the authorized dealers from time to time. Receipt in any freely convertible currency and / or in accordance with the directions issued by the Reserve Bank to the authorized dealers from time to time in all other cases.
(B) All countries other than those mentioned in A above (i) Receipt in rupees from the account of a bank situated in any country other than a member country of the Asian Clearing Union. (ii) Receipt in any freely convertible currency.
(2) (a) In respect of an export from India, receipt shall be made in a currency appropriate to the place of final destination as mentioned in the declaration form irrespective of the country of residence of the buyer. (b) Any other mode of receipt of export proceeds for an export from India in accordance with the directions issued by the Reserve Bank of India to authorized dealers from time to time.
(3) Authorised dealers have been permitted to allow receipts for export of goods/ software to be received from a Third party (a party other than the buyer) as per the guidelines issued by the Reserve Bank.
(2) In addition to 4 (1) (i) & (iii) above, any person resident in India may also receive any payment for other than exports by means of postal order issued by a post office outside India or by a postal money order issued by such post office.
(3) 4 Payment may also be received in rupees by a person resident in India from SNRR Account of person resident outside India after ensuring that the underlying transactions are in conformity with the provisions of the Foreign Exchange Management Act, 1999 and the rules, regulations and directions issued thereunder
