FEMA - Foreign Travel - Mode of payment in Rupees

By Vijay Kumar

Authorised Dealers are allowed to accept payment in cash up to Rs. 50,000 (Rupees Fifty Thousand only) against sale of foreign exchange for travel abroad (for private visit or for any other purpose). Wherever the sale of foreign exchange exceeds the amount equivalent to Rs.50,000, the payment must be received only by a -

(i) crossed cheque drawn on the applicant's bank account, or

(ii) crossed cheque drawn on the bank account of the firm/company sponsoring the visit of the applicant, or

(iii) Banker's cheque/Pay Order/Demand Draft.

With a view to provide flexibility in the mode of payment against sale of foreign exchange, in addition to the payment by Rupees/through crossed cheque/Banker's cheque/Pay order/Demand draft, RBI has directed that Authorised Dealers Category I & II and FFMCs may also accept the payments made by the traveller through debit cards/credit cards/ prepaid cards for travel abroad (for private visit or for any other purpose) provided -

(i) KYC/AML guidelines are complied with,

(ii) sale of foreign currency/issue of foreign currency travellers' cheques is within the limits (credit/prepaid cards) prescribed by the bank,

(iii) the purchaser of foreign currency/foreign currency travellers' cheque and the credit/debit/prepaid card holder is one and the same person.

RBI Circular No. 40/ RBI., Dated: December 10, 2008