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April 2013

Memorandum of Instructions for Opening and Maintenance of Rupee/Foreign Currency Vostro Accounts of Non-resident Exchange Houses

By Gaurang Gandhi, Chartered Accountant
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Presently, banks in India can receive cross-border inward remittances under Rupee Drawing Arrangements (RDA) through Exchange Houses situated in Gulf countries, Hong Kong, Singapore. In case of Malaysia, banks in India can receive cross-border inward remittances under Rupee Drawing Arrangements (RDA) through Exchange Houses only under Speed Remittance Procedure.

This circular provides that banks in India can now receive cross-border inward remittances under Rupee Drawing Arrangements (RDA) through Exchange Houses situated in all countries which are FATF compliant under Speed Remittance Procedure.

 Items No. 7 and 8 under Part (B) – Permitted Transactions have been modified, as under, to reflect the above mentioned change: –
 
7. Payments to medical institutions and hospitals in India, for medical treatment of NRI/their dependents and nationals of all FATF countries.

8. Payments to hotels by nationals of all FATF compliant countries/NRI for their stay.

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