The non-resident exchange houses from Gulf Countries, Hong Kong and Singapore open Rupee Vostro accounts in AD Category – I banks in India.
The Vostro accounts can be used for channeling inward remittances to India primarily on private account. The remitter and the beneficiary (in most cases) should be individuals. The account can be used for financing of trade transactions remittances under the Rupee Drawing Arrangements (RDAs).RBI has now increased the limit of trade transactions from the existing Rs. 5,00,000/- (Rupees Five Lakh only) per transaction to Rs. 15,00,000/- (Rupees Fifteen Lakh only) per transaction, with immediate effect.
AD banks which are receiving such remittances under RDA should take care of the following:
1. Remittances is received only from FATF compliant countries.
2. KYC/AML/CFT and other due diligence concerns should be taken care.
3. Individual Exchange Houses which are frequently sending large value trade related remittances must be reviewed and reported to the Reserve Bank of India.
4. AD banks must contact their correspondents that maintain accounts for, or facilitate transactions on behalf of Exchange Houses in order to request additional information regarding high value trade related transactions and the parties involved. The collected details should be kept on record and it may be made available for scrutiny,
5.AD banks must ensure that the proceeds of export payment through RDA is applied to the outstanding export finance if any, availed by the exporter from any bank for the concerned export transaction and obtain a declaration to that effect from the exporter.
6.The normal banking requirements of registration of Power of Attorney/ Specimen signatures of signing officials of the Exchange Houses should be observed.
For opening such non-resident Vostro accounts of an Exchange House, the AD Category – I banks make necessary enquiries about the financial standing of the Exchange House, in accordance with normal banking practice and satisfy themselves fully in all respects. The Exchange Houses should hold valid licenses issued by the Local Monetary/ Supervisory Authority concerned and have necessary authority / license to transact currency exchange/ money transfer business. All the partners of the Exchange Houses are jointly and severally bound to honour the obligations devolving on the Exchange Houses under the registered agreement.
