Reserve Bank Unveils Remittance Norms For Travel Services

The Reserve Bank has issued guidelines to authorised dealers (ADs) for extending remittance facilities to travel related service organisations in India for meeting overseas expenses of their clients travelling abroad, specifically transportation, accommodation, and issue of pre-paid telephone cards.

The RBI has specified that the remittances are to be made out of collections in rupees or foreign currencies received from the travellers. Earlier, such approvals required RBI permit. For the purpose, the Indian operator will have to submit all tour details to the AD accompanied by a certified copy of the agreement entered into with the overseas agent. Moreover, special rupee or designated foreign currency accounts will have to be opened after obtaining RBI permission for the deposit of collections at different centres in India.

 

All such deposits will be pooled into one main account with the AD.ADs may allow such remittance after ensuring that requisite remittance is arrived at correctly, duly supported by documentary evidence. Moreover, the following terms must be followed :

Remittance towards cost of tickets for surface transportation does not exceed the overall ceiling of $ 50,000 per tie-up arrangement.

Sale of tickets, hotel accommodation, or pre-paid telephone cards is made on behalf of the overseas organisation.

Tickets may be sold to Indian residents if they hold valid air ticket for travel between India and a foreign country (other than Nepal and Bhutan).

The special rupee accounts will exclusively hold amount collected in rupees towards sale of the tickets or pre-paid telephone cards.

Debits are allowed only for refunds paid to travellers and remittance in foreign currency to the concerned foreign agent.

The cost of hotel accommodation abroad is paid out of foreign exchange released to the Indian traveller for undertaking visits abroad.

In case of non-resident clients, collections may be made in foreign currency through normal banking channels or by debiting their NRE/FCNR account or against in rupees duly supported by valid enactment certificates.

Proper records of sale/cancellation must be maintained and presented to the RBI when required.

Advance payment to the overseas agent serving the Indian traveller should not exceed 10 per cent of cost of accommodation, provided it is adjusted within one month from date of remittance. If the advance is not adjusted, it should be repatriated to India promptly and a bank certificate issued to the RBI. Authorised dealers must ensure remittance for meeting costs of surface transportation is within the overall ceiling of $ 50,000 per tie-up arrangement.

Remittance facility should be on actual basis and no advances must be permitted. Payments towards refunds to travellers paying in foreign currency must be in rupees in India.