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| The Reserve Bank of India today issued 17 Master Directions covering foreign exchange transactions. Master Directions on foreign exchange being issued today consolidate relevant A.P (DIR Series) Circulars issued so far within the ambit of the relevant regulations, amended up to date and cover different classes of transactions permitted under the rules and regulations framed under the Foreign Exchange Management Act, 1999 (FEMA).
Master Directions on foreign exchange matters deal with the manner in which an authorised person should conduct cross border/forex transactions. The Reserve Bank frames regulations in respect of capital account and trade transactions in terms of Sections 6, 7, 8, 9, 10 and 47 of FEMA whereas the Government of India frames rules in respect of current account transactions and compounding proceedings. Further, in terms of section 3 of FEMA, all cross border and/or foreign exchange transactions are to be conducted through a person authorised to do so under section 10 of FEMA. The Reserve Bank of India thus issues directions [through A.P. (DIR Series) Circulars] to the Authorised Persons under section 11 of FEMA in regard to the manner of conducting these transactions with their customers/ constituents.
The existing set of Master Circulars issued on various subjects will stand withdrawn with the issue of the Master Direction on the subject.
Sangeeta Das
Director |
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. The Master Directions consolidate instructions on rules and regulations framed by the Reserve Bank under various Acts including banking issues and foreign exchange transactions. The process of issuing Master Directions involves issuing one Master Direction for each subject matter covering all instructions on that subject. Any change in the rules, regulation or policy is communicated during the year by way of circulars/press releases. The Master Directions will be updated suitably and simultaneously whenever there is a change in the rules/regulations or there is a change in the policy. Explanations of rules and regulations will be issued by way of Frequently Asked Questions (FAQs) after issue of the Master Directions in easy to understand language wherever necessary. With the issue of this Master Direction, the instructions/guidelines contained in the circulars listed therein stand repealed.
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