The Foreign Exchange Management (Offshore Banking Unit) Regulations, 2002
Published vide S.O. 3327, dated 19.10.2002, published in the Gazette of India, Extraordinary, Part II, Section 3(i), dated 10.10.2002.
CHAPTER I1. Short title and commencement .-(1) These regulations may be called the Foreign Exchange Management (Offshore Banking Unit) Regulations, 2002. (2) They shall come into force from the date of their publication in the Official Gazette. 2. Definitions .-In these regulations, unless the context requires otherwise:-
(i) "Act" means the Foreign Exchange Management Act, 1999 (42 of 1999);
(ii) "Offshore Banking Unit" means a branch of a bank in India located in the Special Economic Zone and holds an authorisation issued under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949);
(iii) "Regulations" means the regulations made under the Act;
(iv) "Special Economic Zone" means the Special Economic Zone notified by the Government of India;
(v) Words and expressions used but not defined in these regulations shall have the same meanings respectively assigned to them in the Act.
PART I3. Notwithstanding the status, as an authorised dealer, of the bank setting up the Offshore Banking Unit, and save as otherwise directed by the Reserve Bank, the Offshore Banking Unit shall not be regarded as an authorised dealer for the purpose of the Act, rules or regulations made thereunder. 4. Save as otherwise provided in these or any other regulations or directed by the Reserve Bank, nothing contained in any other regulations shall apply to an Offshore Banking Unit. 5. Save as otherwise provided in these regulations or with the permission of the Reserve Bank, an Offshore Banking Unit shall not conduct any activity or undertake any transaction with residents in India.
Transactions Which May Be Undertaken By An Offshore Banking Unit6. An Offshore Banking Unit may undertake foreign exchange transactions with any authorised dealer in India only on principal-to-principal basis. 7. An Offshore Banking Unit may undertake transaction in foreign exchange with a unit located in Special Economic Zone to the extent the latter is eligible to enter into or undertake such transaction, within the ceiling and subject to the conditions specified in the regulations governing such transaction. 8. Engagement of an Offshore Banking Unit in any of the forms of business specified in sub-section (1) of section 6 of the Banking Regulation Act, 1949 shall be only in foreign exchange and shall be subject to these regulations and the conditions of licence issued under the said Act.
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