RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001

A.D.(M.A.Series ) Circular No.50 December 29,1998

To,

All Authorised Dealers in Foreign Exchange

Dear Sirs,

Amendments to Exchange Control Manual (ECM)

It has been decided to amend/modify the Exchange Control regulations as set out in the following paragraphs.

1. Introduction of Euro

Euro has been introduced as a currency of European Currency Area with effect from 1st January, 1999. It has been decided to allow authorised dealers to accept deposits denominated in Euro under FCNR(B) Scheme. During the transition stage viz. 1st January 1999 to 31st December 2001, National Currency Units of the member countries of the European Currency Area will continue to co-exist. Accordingly , authorised dealers may continue to accept deposits under FCNR(B) Scheme denominated in Deutsche Mark upto 31st December 2001.

2. Registration charges for Patents/Trade Marks

Authorised dealers have been permitted to allow remittances related to registration of Patents/Trade Marks. Accordingly, authorised dealers may allow remittances related to registration or renewal of registration of Patents and Trade Marks with overseas Governments/Regulatory Authorities/International Organisations on the basis of documentary evidence in support of payment of such fees.

3. QA.22 accounts in the names of Liasion Offices

In terms of para 11A.2(vi) authorised dealers have been permitted to open QA.22 accounts in the names of liason offices of foreign companies after verifying approval granted by Reserve Bank under section 29(1)(a) of FERA 1973. Authorised dealers are also allowed to credit certain refunds received from Government Departments/Utility Companies etc., provided the original payment relating to the transaction was made from the QA.22 account. It has now been decided that authorised dealers may also allow credit of the sale proceeds of the assets of the Liason Offices to their respective QA.22 accounts provided the sale price is less than the book value of the assets as certified by a Chartered Accountant and the assets were acquired by payment from QA.22 account.

4. The following consequential amendments may be carried out in the Exchange Control Manual

Volume I

(i) In the last sentence of paragraph 2.1 the words " in European Currency Unit (ECU) of the European Monetary System (EMS) ." may be substituted by the words " in Euro of the European Currency Area."

(ii) In the first sentence of paragraph 2.3 the words " regarding choice of currencies besides Indian rupees , SDR or ECU ' may be substituted by the words " regarding choice of curencies besides Indian rupees, SDR or Euro".

(iii) In paragraph 5B.1(ii)( c) the words "Deutsche Mark" may be substituted by the words "Deutsche Mark/Euro".

(iv) In paragraph 14B.1 the sentence " At present , accounts are permitted ton be maintained only in Pound Sterling, U.S.Dollar, Deutsche Mark and Japanese Yen" may be substituted by the sentence " At present, accounts are permitted to be maintained only in Pound Sterling, U.S.Dollar, Deutsche Mark, Japanese Yen and Euro."

(v) A new item XIV A may be inserted after item XIV in part B of Annexure I to Chapter 8 as per Slip i.

(vi) Paragraph 11A.2(vi) may be replaced as per slip 2.

5. Authorsied dealers may bring the contents of this circular to the notice of their concerned constituents.

6. The directions contained in this circular have been issued under Section 73(3) of the Foreign Exchange Regulation Act,1973 (46 of 1973) and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.

Yours faithfully,

B.MAHESHWARAN

Chief General Manager

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