The Reserve Bank of India (“RBI”) circular dated July 3, 2024, addresses changes in the release of foreign exchange for miscellaneous remittances by authorised dealers in foreign exchange. The circular rescinds previous guidelines that permitted the release of foreign exchange for current account transactions up to USD 25,000 (US Dollars twenty-five thousand) or its equivalent based on a simple letter without requiring Form A2 or other documentation. Instead, authorised dealers are now required to obtain Form A2 in either physical or digital format for all cross-border remittances, irrespective of the transaction amount and there will not be any limit on the amount being remitted on the basis of ‘online' Form A2.
This change aims to streamline regulatory compliance and operational procedures. Authorised dealers must ensure compliance with the Foreign Exchange Management Act, 1999 (“FEMA”), specifically Section 10(5) of FEMA, to verify that transactions adhere to FEMA provisions.
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