FOREIGN EXCHANGE DEALERS’ ASSOCIATION OF INDIA 17 …

1 FOREIGN EXCHANGE DEALERS ASSOCIATION OF INDIA (Registered under Section 25 of The Companies Act, 1956) 17 Floor, Maker Towers F , Cuffe Parade, MUMBAI 400 005. Tel. : 22182583 / 22184432 Fax : 22189946 Email: Website : Chief Executive SPL-13/FIRC/2009 31st March 2009 Dear Sir, Loss of FIRCs Issuance of duplicate FIRCs The following circulars issued by us earlier address the subject of Loss of FIRCs and the issue of duplicate FIRCs. 1) Circular No. 2445/FIRC/SPL-67/97 dated 17th September, 1997 : Guidelines to be followed by member banks while considering issuance of duplicate FIRCs including the need for obtaining an indemnity have been given in this circular.

2 A copy of the said circular is given in Annexure 1. 2) Circular No. SPL-26/FIRC/2000 dated 29th February, 2000 : Member banks were advised to ensure that adequate and proper systems and procedures are in place with regard to issuance and delivery of original FIRCs. A copy of the said circular is given in Annexure 2. 3) Circular No. SPL-45/FIRC/2000 dated 5th May 2000 : While member banks should take adequate safeguards against possible misuse arising out of the issuance of duplicate FIRCs by unscrupulous elements, f urther precautions in this regard such as insisting on lodgement of police complaint by the benef iciary (as in the case of lost shipping bills)

3 F or issuance of duplicates may be considered by banks on a case by case basis in their own judgement and discretion, over and above the recommendatory precautions enunciated in above two circulars item (1) and (2). A copy of the said circular is given in Annexure 3. In terms of Circular No. SPL-11/FIRC/05 dated 10th March, 2005 (Annexure 4) and Circular No. SPL-72/FIRCs/05 dated 9th December 2005 (Annexure 5) the attention of member banks was drawn once again to the guidelines and precautions to be followed.

4 It has been observed that lately large numbers of FIRCs are being reported lost by a few member banks. Further, lost FIRCs reported in some cases are in bunches dating back to 3 or more years favouring the same beneficiary. In certain cases the value of remittances covered by such FIRCs are very large. Our Technical Sub-Committee discussed this matter in detail and the observations and views of the Technical Sub-Committee were further deliberated by the Managing Committee. Based on the deliberations, we submitted our suggestions to Reserve Bank of INDIA .

5 Reserve Bank of INDIA , FOREIGN EXCHANGE Department, Central Office, Mumbai vide their letter no. 25321 dated 20th March 2009 have advised us that they agree to the proposal made by us.. Accordingly member banks are advised to follow the guidelines given below while handling the issuance of FIRCs and request for issuance of duplicate FIRCs in addition to existing guidelines. 1. Presently FIRCs are being issued for most of the transactions covering FOREIGN inward remittances.

6 Instead FIRCs may be issued at the specific request of the beneficiary only in cases where such FIRCs are needed either for utilisation at a later date for repatriation of the proceeds or for providing as documentary evidence for availing of certain benefits or fulfilling certain obligations to Regulatory Authorities/Government bodies. Accordingly, member banks may consider issuance of FIRCs in its present form on security stationery only in respect of the following cases: a. Advance Payment for Exports.

7 B. Receipt of export proceeds by an AD Bank other than the one who handles/handled GR Form. c. Inward remittances covering FDIs/FIIs. 2. In all other cases, at the specific request of the beneficiaries, member banks may issue a suitable certificate, on their Letter Head, duly signed by authorised officials, incorporating full particulars of the remittances. 3. The validity of FIRCs issued as per 1 above and that of the suitable certificate as per para 2 above, must be restricted to One year from the date of its issuance.

8 4. Requests for revalidation may be considered only after the expiry of the validity period and upon production of the relative original FIRC. 5. Whenever duplicate FIRCs is to be issued - in cases covered under items No. 1 (a) to (c) above, the duplicate FIRC issued may clearly indicate the name of the Authority or Government Department to whom such duplicate FIRC is to be produced. In the absence of satisfactory reasons, possibility of marking the duplicate FIRC with a suitable notation that This FIRC is issued for record purposes only and is not to be utilised for repatriation purpose may be considered.

9 6. Whenever FIRC is utilised for purposes like release of GR Forms or Repatriation wherever permitted, with an Authorised Dealer Bank other than the one who had issued the FIRC, the Authorised Dealer Bank with whom FIRC is utilised should communicate to the issuer of the FIRC, the fact of utilisation of the FIRC for noting in the records of the AD Bank who had issued the FIRC. If the fact of utilisation of the original FIRC is noted in the records of the issuer, when a beneficiary comes for issuance of duplicate, the issuer will be put on guard and will bring to the notice of the beneficiary the fact of utilisation of the original with another AD Bank.

10 If duplicate FIRC is first used, the utilisation thereof will be noted in the records of the issuer of the FIRC. If the original is also used subsequently, this information will also flow to the issuer of the FIRC and issuer will come to know the utilisation of both the original and duplicate. With such data build up, the issuer of the FIRC will take up with the beneficiary and will proceed further in an appropriate manner. The above guidelines come in to effect from Thursday, the 30th April 2009.