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Thursday, August 7, 2008

[FEMA] Project Offices - an additional Foreign Currency Account in India

Dear All,
 
Project Offices — Foreign Currency Accounts in India

As per Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, notified vide Notification No. FEMA 22/2000-RB dated May 3, 2000, Foreign Exchange Management (Remittance of Assets) Regulations, 2000, notified vide Notification No. FEMA 13/2000-RB dated May 3, 2000, as amended from time to time and A.P. (DIR Series) Circular No. 44 dated May 17, 2005, foreign companies having Project Offices in India are permitted to open only one foreign currency account for each project, subject to the terms and conditions as mentioned in A. P. (DIR Series) Circular No. 44 dated May 17, 2005. With a view to avoid currency exposures, many foreign companies have been approaching the Reserve Bank for permission to open more than one foreign currency account, usually in their home currency and another in US Dollar.
 
It has, therefore, been decided to liberalise the procedure and allow AD Category – I banks to open an additional foreign currency account for each Project Office (established under the general/specific approval of Reserve Bank) subject to the same terms and conditions as applicable to the existing foreign currency account provided that both the foreign currency accounts are maintained with the same AD Category – I bank. The other conditions mentioned in the abovementioned circular shall continue.

The above instructions shall come into force with immediate effect.

Source: A. P. (DIR Series) Circular No. 02 dated 31st July 2008
 
Thanks & Regards
Alagar
Investment Banking
Karvy Investor Services Limited
Chennai
Moble: 919884731993/ 919790906827

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