A. P. (DIR Series) Circular No. 102 dated May 21, 2015

Rupee Drawing Arrangement – Increase in trade related remittance limit

This circular has increased the limit for trade transactions under the Rupee Drawing Arrangements (RDA) with respect to Vostro Accounts of Non-resident Exchange Houses from Rs. 500,000 to Rs. 1,500,000 with immediate effect.

Banks have been authorized, subject to certain conditions, to regularize payments exceeding the prescribed limit under RDA if they are satisfied with the bonafide of the transaction. Banks are also required to take the following steps: –

1. Ensure the remittances received under RDA are from FATF compliant countries.

2. Take care of KYC / AML / CFT and other due diligence concerns.

3. Review individual Exchange Houses that are frequently sending large value trade related remittances and report them to RBI.

4. Contact their correspondents that maintain accounts for or facilitate transactions on behalf of Exchange Houses in order to request additional information regarding high value trade related transactions and the parties involved. The collected details must be kept on record and it must be made available for scrutiny,

5. Ensure that the proceeds of export payment through RDA is applied to the outstanding export finance if any, availed by the exporter from any bank for the concerned export transaction and obtain a declaration to that effect from the exporter.