[PPT] - EXCHANGE CONTROL EXCHANGE CONTROL MEANS OFFICIAL INTERFERENCE IN PowerPoint Presentation

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EXCHANGE CONTROL EXCHANGE CONTROL MEANS OFFICIAL INTERFERENCE IN THE FOREIGN EXCHANGE DEALINGS OF A COUNTRY. THE CONTROL MAY EXTEND A WIDE AREA COVERING:

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EXCHANGE CONTROL

NON- RESIDENTS.

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EXCHANGE CONTROL OBJECTIVES:

CURRENCY IN TERMS OF OTHER CURRENCIES.

PRACTICABLE AND EQUILIBRIUM IN THE COUNTRY’S BALANCE OF PAYMENT.

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EXCHANGE CONTROL

METHODS:

EXCHANGE RATE OF THE COUNTRY’S CURRENCY IN TERMS OF OTHER CURRENCIES.

WHICH PAYMENTS FOR IMPORTS AND EXPORTS SHOULD BE MADE AND RECEIVED, TO AND FROM SPECIFIED COUNTRIES.

BETWEEN TWO COUNTRIES FOR THE PURPOSE OF AVOIDING THE BALANCE OF PAYMENTS DEFICITS.

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EXCHANGE CONTROL

ADMINISTRATION:

MINISTRY OF FOREIGN TRADE, GOVT. OF INDIA, ON THE BASIS OF THE FOREIGN EXCHANGE MANAGEMENT ACT 1999.

BANK.

WITH TRADE CONTROL AUTHORITIES.

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EXCHANGE CONTROL

CONTROL OVER SPENDING:

GOVERNMENT.

GENERAL OF FOREIGN TRADE PERMITTING IMPORT OF GOODS, CARRIES WITH IT PERMISSION TO PAY FOR THEM.

CURRENCIES AS WELL AS THE MANNER IN WHICH THE PAYMENT SHOULD BE MADE.

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TRANSACTIONS SUBJECT TO CONTROL

DRAFTS AND OTHER FINANCIAL INSTRUMENTS AND SECURITIES.

AND DISPOSAL OF IMMOVABLE PROPERTY IN INDIA BY FOREIGN NATIONALS AND COMPANIES AS WELL AS OUTSIDE INDIA BY RESIDENTS IN INDIA.

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TRANSACTIONS SUBJECT TO CONTROL

NON-RESIDENTS.

IN INDIA OF FOREIGN FIRMS, COMPANIES AND FOREIGN NATIONALS.

HOLDING OF SHARES IN INDIAN COMPANIES BY FOREIGN NATIONALS, FIRMS AND COMPANIES .

OUTSIDE INDIA BY INDIAN COMPANIES.

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PERMITTED CURRENCIES

CURRENCIES WHICH ARE FREELY CONVERTIBLE AND FOR WHICH A FAIRLY ACTIVE MARKET EXISTS FOR DEALING AGAINST THE MAJOR CURRENCIES.

POSITION IN ANY PERMITTED CURRENCY.

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CONVERTIBLE CURRENCIES

OR ANY OTHER CURRENCY FREELY, i.e. WITHOUT HAVING TO OBTAIN THE PRIOR PERMISSION OF THE MONETARY AUTHORITIES OF THE COUNTRY CONCERNED.

THERE IS NO RESTRICTION, EXCEPT THE EXCHANGE RATE OF THE CURRENCY IN TERMS OF OTHER CURRENCIES.

‘HARD CURRENCY' WHILE A CURRENCY NOT CONVERTIBLE WAS CALLED A ‘SOFT CURRENCY’.

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AUTHORIZED DEALER

FEMA, 1999 IS A PERSON AUTHORIZED IN WRITING BY THE RESERVE BANK TO DEAL IN FOREIGN EXCHANGE.

LICENCE GRANTED BY THE RESERVE BANK.

RESERVE BANK DOES NOT DEAL IN FOREIGN EXCHANGE WITH THE PUBLIC.

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AUTHORIZED DEALER

DEAL IN ALL FOREIGN CURRENCIES OR ONLY IN SPECIFIED CURRENCIES, OR TO UNDERTAKE TRANSACTIONS OF ALL DESCRIPTIONS IN FOREIGN CURRENCIES OR ONLY CERTAIN SPECIFIED TRANSACTIONS. THE AUTHORITY MAY BE FOR A SPECIFIC PERIOD OR WITHIN SPECIFIED AMOUNT.

CONSISTING OF STATE BANK OF INDIA AND ITS SUBSIDIARIES, IN ADDITIONS THERE ARE CERTAIN FIRMS , HOTELS, SHOPS etc, HAVE BEEN AUTHORIZED TO DEAL IN FOREIGN CURRENCY, AS ‘MONEY CHANGERS’.

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AUTHORIZED DEALER

CURRENCIES, OPEN AND MAINTAIN ACCOUNTS ABROAD IN SUCH CURRENCIES.

PURCHASE OF FOREIGN CURRENCIES.

NON-RESIDENTS AND PASS DEBITS IN SUCH ACCOUNTS.

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AUTHORIZED DEALER

PERMITTED CURRENCY FREELY AGAINST RUPEE FROM BANKS AND PUBLIC AND ALSO MAKE REMITTANCES.

SUBJECT TO EXCHANGE CONTROL REGULATIONS.

ANY PERSON, BANK OR MONEY CHANGER IN INDIA, SUBJECT TO REALIZATION OF THE PROCEEDS THROUGH HIS OVERSEAS BRANCH / CORRESPONDENT.

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AUTHORIZED DEALER

DELIVERIES TO AND FROM RESERVE BANK U.S. DOLLARS, DEUTSCH MARKS AND YEN FOR BOTH SPOT AND FORWARD DELIVERIES.

FOREIGN BUYERS AND SELLERS EXCEPT DEFERRED PAYMENT GUARANTEES FOR WHICH PRIOR APPROVAL OF RESERVE BANK IS NECESSARY.

FOREIGN BANKS.

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AUTHORIZED DEALER'S TRANSACTION WITH RBI

SELL AND BUY U.S. DOLLARS TO AND FROM THE AUTHORIZED DEALERS FOR PURPOSES APPROVED BY THE CENTRAL GOVT.

ONLY: THIS RECOURSE TO THE RESERVE BANK FOR TRANSACTIONS IN FOREIGN CURRENCIES IS AVAILABLE TO THE AUTHORIZED DEALERS FOR THEIR COVER OPERATIONS ONLY.

BANK BUYS SPOT ONLY US DOLLARS AND NOT BUY EITHER SPOT OR FORWARD ANY OTHER CURRENCY.

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AUTHORIZED DEALER’S TRANSACTION WITH RBI

PURCHASE AND SALES OF US DOLLARS WILL BE IN MULTIPLES OF 5000 WITH A MINIMUM OF U.S.$25,000.

CASE OF PURCHASE BY AN AUTHORIZED DEALER THE RESERVE BANK WILL SEND NECESSARY INFORMATION TO THE FEDERAL RESERVE BANK OF NEW YORK TO ARRANGE PAYMENTS OF FUNDSOT THE NEW YORK OFFICE.

VALUE AGAINST SALE OF FOREIGN CURRENCY TO THE RESERVE BANK WILL BE MADE BY THE RESERVE BANK’S CONCERNED ACCOUNT OF THE AUTHORIZED DEALER WITHOUT WAITING FOR THE CREDIT INFORMATION.

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FEDAI

INDIA FIXES, IN CONSULTATION WITH RESERVE BANK , THE RUPEE-STERLING RATES FOR TRANSACTIONS IN STERLING BETWEEN THE BANKS AND THE PUBLIC, AND SUPPLY THE RATES TO THE BANKS FROM TIME TO TIME.

AUTHORIZED DEALERS IN RESPECT OF THE FOREIGN EXCHANGE TRANSACTIONS.

DOCUMENTARY BILLS, L /C OPENING AND GUARANTEE COMMISSION, TRANSIT PERIOD etc.

THE AUTHORIZED DEALER.

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CORRESPONDENT

HOME COUNTRY MAINTAINS AN ACCOUNT AND ROUTES ITS BUSINESS IN CONNECTION WITH THE FOREIGN EXCHANGE TRANSACTION UNDERTAKEN BY IT, WHICH INCLUDES:

DOMESTIC BANK.

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FOREIGN CURRENCY ACCOUNTS OVERSEAS

CURRENCY WITH AN OVERSEAS BRANCH OR CORRESPONDENT IN DIFFERENT COUNTRIES.

THROUGH A NOSTRO ACCOUNT ARE RECORDED IN A PROFORMA ACCOUNT, WHICH IS MAINTAINED BOTH IN THE CONCERNED FOREIGN CURRENCY AND HOME CURRENCY.

OVERSEAS BRANCH OR CORRESPONDENT WITH THE BANK AT HOME.

A FOREIGN COUNTRY WITH A BANK IN INDIA.

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COUNTER TRADE

AGREEMENT BETWEEN TWO COUNTRIES.

IMPORTED AND EXPORTED BETWEEN TWO COUNTRIES THEMSELVES.

RESERVE BANK.

INTERNATIONAL PRICES.

ACCOUNT.

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REASONS FOR THE GROWTH OF COUNTER TRADE

TRADE MAINLY DUE TO THE FOREIGN EXCHANGE PROBLEMS.

SEVERAL COMPANIES TO MITIGATE THE EFFECTS OF RECESSION.

A MEANS TO INCREASE SALES THROUGH DISGUISED UNDERCUTTING OF THE CARTEL PRICES.

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ESCROW ACCOUNT IT IS A FOREIGN CURRENCY ACCOUNT IS US DOLLARS OPENED WITH THE PERMISSION OF THE RESERVE BANK WITH AN AUTHORIZED DEALER IN INDIA FOR THE PURPOSE OF ROUTING THE EXPORT AND IMPORT TRANSACTIONS UNDER A COUNTER TRADE AGREEMENT BETWEEN INDIAN PARTY AND AN OVERSEAS ONE. NO INTEREST IS PAYABLE ON THE BALANCES STANDING AT CREDIT OF AN ESCROW ACCOUNT.