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Application for obtaining permission to enter into Rupee or Foreign Currency Drawing Arrangements with Exchange Houses



Ozg FEMA Consultant

Phone # 09811415831-37-61-72-84-92-94

Website: fema.in 




(a) The application for obtaining permission to enter into Rupee / Foreign Currency Drawing Arrangements with Exchange Houses should be completed and submitted in the prescribed format (given below), to the Chief General Manager, Foreign Exchange Department, Forex Markets Division, Reserve Bank of India, Central Office, Mumbai- 400001. The application should be signed by the General Manager (or an officer of equivalent rank), International Banking Division/ Foreign Department of the applicant AD Category - I bank.
(b) Documentation :
AD Category - I banks should submit the following documents along with the application:
(i) Certified copy of the license (English version) issued by the Central Bank/ any other Supervisory Authority of the country where the Exchange House is situated.
(ii) Certified copy/ ies of license(s) issued by Municipal Authorities and / or any other Government regulatory/ controlling authority in the country of the Exchange House. (applicable to the Exchange Houses in U.A.E.)
(iii) A Certificate from a Chartered Accountant, regarding compliance with anti money laundering norms in the home country of the Exchange House.
(iv) Certified copies of confidential opinion/ report recorded by (a) Embassy of India in the country concerned and (b) two bankers of the Exchange House.
(v) Audited Balance Sheets and Profit and Loss Account Statements of the Exchange House for the previous three years.
(vi) Copy of the Board Resolution of the AD Category - I bank for entering into the arrangement.
(vii) Copy of letter from the Exchange House regarding the proposal to enter into the Rupee/ Foreign Currency Drawing Arrangement along-with the provision of collateral, whereever necessary. 

Part  A-   Particulars  of  the applicant  bank  and  its  existing  arrangement(s),  if  any

1.
Name  of  the applicant  bank           

2.
Existing arrangements(s)
(i) Name of Exchange House (EH)
(ii) Since
(iii) No. of drawee branches
(iv) Business turnover for the previous three calendar years

3(a)
Details  of  branches  having  multiple  EH  drawing              arrangements                        

3(b)
Furnish  comments  with regard  to  adequacy  of              internal  control  systems put  in  place  at  those              branches. (Attach a sheet if necessary)

4.
Financial losses sustained if any  during  last  five  years
(April-March)  

(i) Year
(ii) Name of the EH
(iii) Amount of loss
(iv) Particulars of loss
(v) Ref. Nos. and dates lodged with RBI and RBI’s permission to  write  off                         

5.
Financial  disputes  if  any  with  EH(s)  pending  settlement  
(i)   Name  of  EH
(ii) Expected amount of loss
(iii) Particulars of loss
(iv) Ref. No. & dated of report lodged with RBI

6.
Furnish  an  EH-wise  summary  of  the major  irregularities  observed  in  the existing  drawing  arrangements  during     inspections  by  Internal  Auditors, RBI Inspectors  as  also  Overseas Auditors indicating  the  corrective  measures initiated  by  the  bank



Part  B -  Particulars  of  the  Exchange House  for  the  proposed  drawing  arrangement

1(a)
Name  and  address  of  the  Exchange House  with  which  the  bank  proposes  to  enter into RDA

(b)
Date  of  establishment  of  the EH                    

(c)
Furnish  details  of  other  Group  companies of  EH  viz. name,  management  control, financial  means  and  standing, etc.

2(a)
Whether  the  EH  has  operative  RDA  with
any   other  bank  in  India?                                  

(b)
If  yes,  state  the  name/s  of  the  bank/s              

3.
Furnish  details  of  the  management  structure  of  the  EH

(a) Status of EH (company, firm, joint-ventures, etc.)
(b) With  whom  the  management  vests
(c) Name,  nationality  and  line  of  business  of                         the  promoters  of  the  EH    
(d)  Capital  holding  pattern  
(e)  Whether  the applicant  bank  will  have  any
      investment in  EH? Furnish  complete  details
(f)  Whether  the  applicant  bank  will  have  any
     role in  management  of  EH.?  Furnish  details         

4.
Profit  earned/loss  sustained  by  the  EH  during                    the  previous  three  calendar  years

5.
Particulars  of  license  issued  by  the  Central  Bank/ Supervisory Authority of  the  country  concerned :

a)   License  no
b)   Date  of  issue
c)   Validity  period
     d)    Special  conditions,  if  any

6.
Particulars  of  licenses  issued  by  Municipal  Authorities  and/or  any  other  Government  regulatory/ controlling  authority (Applicable  to  EHs  in  UAE)

a)    Licence  No
b)    Date  of  issue
c)    Validity  period
     d)   Special  conditions  if  any

7.

Confidential  opinion  in  brief  recorded  by

a) Embassy  of  India  in  the  country
b) Bankers  of  the  EH

  i) --------------------------------------
            Name  of  the  banker
  ii) ------------------------------------
                 Name  of  the  banker



8.
Is  the  applicant  bank  fully  satisfied about

a) the  competence  of  the  company/firm/people  managing  the  EH
 b) the  financial  strength  of  the  shareholders of  the  EH
c)the  financial strength  of  the  EH
d)the  internal  control  systems  operating in  EH  with  regard to  issue  of  drafts?

9.
Furnish  details  of  collateral arrangements  negotiated  with  the  EH  (viz.. amount  of deposit, bank  guarantee, etc.)  and  the justification  thereof


Part  C- Details  of  the proposed  arrangement

1.
Details/description  of  proposed  arrangement            

2(a)
Reasons  for  entering  into  RDA                            

(b)
Projections  of  business  turnover (quantify             monthly  projections)

3.
The  procedure  under  which  the  proposed                 
RDA  will  be  conducted (DDA/Non-DDA/Speed)

4.
Name  and  address  of  the  account  maintaining            Branch

5.
No  of  drawee  branches  to  be  included  in  the proposed  RDA

6.
Whether  EH  is  prepared  to  provide  additional collateral cover equivalent  to  one month’s projected  drawings ?(Applicable  to  EHs  which                 have  not  completed  three  years  of  its operations)

7.
Any  other  information  which  the  bank  wishes        to  furnish  in  support  of  this  application



We hereby certify that -

i)    the proposed  arrangement  with……………………………. 
  has  been  considered  by  us  carefully  taking  into  account  the means and  standing  of  the  aforesaid  EH  and  we  are  fully    satisfied about the  credentials  and  competence  of  the persons / firms / companies associated  with  the  EH.
                    ii)  our  branches already  having  DD  drawing  arrangements  with  other EH(s)  and  which  are  now  proposed  to  be  covered  under  the  proposed arrangement  with  the  above  EH viz………………………. have sufficient  expertise  to  handle  business  emanating  from  one more EH.
                    iii)  We  have  put  in  place  adequate  internal  control  and risk management system, which are working satisfactorily.
                   iv)  The  particulars  given  above  are  true  and  correct  to  the  best  of  our knowledge  and  belief.


                                                                                                                   (                        )
      Place                                                                                                     General Manager
      Date                                                                                                                Address

Ozg FEMA Consultant

Phone # 09811415831-37-61-72-84-92-94

Website: fema.in