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Foreign Exchange Operation - Volume 3 CHAPTER 3

Foreign Exchange Operations Remittances

INTRODUCTION 1.1.This chapter deals with cleaan inward and outward remittances for purposes other than exports and imports. As regards remittances relating to imports and exports, branches should note to follow in the Master Circulars released by the Reserve Bank every year. Procedural aspects relating to issue and encashment of rupee / foreign currency Travellers cheques and foreign currency notes/coins are dealt in a separate chapter on FOREIGN TRAVEL.

the procedural guidelines contained in this chapter as well as the Exchange Control aspects contained

1.2. Branches handling foreign inward/outward remittances should ensure compliance of the provisio of 2000 and subsequent amendments. b)Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 Notification No. FEMA 1/2000-RB dated 3rd May 2000 and subsequent amendments. c)Foreign Exchange Management (Realisation, repatriation and surrender of Foreign Exchange) Regulations, 2000 Notification No. FEMA 9/2000 dated 3rd May 2000. d)Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000 Notification No. FEMA 11/2000-RB dated 3rd May 2000. e)Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 Notification No. FEMA 14/2000-RB dated 3rd May 2000. f)Foreign Exchange Management (Receipt and Payment to a person resident outside India) Regulations, 2000 Notification No. FEMA 16/2000-RB dated 3rd May 2000. g)Transactions with Nepal and Bhutan Notification No. FEMA 17/2000-RB dated 3rd May 2000. and the Rule on Clean Instruments of the FEDAI Rules Edition effective 1 st May 2012 besides the

a)Foreign Exchange Management (Current Account Transactions) Rules, 2000 dated 3rd Ma

procedural guidelines laid down by Treasury (Foreign) Department, Central Office.

1.3.Only the AD branches of our bank are approved to handle all types of foreign inward and outward remittances in foreign currencies. However, NAD branches of our bank can handle certai categories of inward remittances in foreign currencies subject to observance of the guidelines contained in this chapter and obtaining the appropriate exchange rate from the AD branch designated to them. For all outward remittances in Indian rupees as well as foreign currencies, NAD branches have to take up with the AD branch designated to them with necessary particulars/documents detailed in the subsequent paragraphs and arrange for issuance of the demand draft or SWIFT transfers. 1.4. Only the AD branches shall report the resultant purchase or sale transactions to Treasury (Foreign). 1.5. AD Branches handling foreign inward/outward remittances (both on account of their customers and the customers of NAD branches linked to them) should note to record the proper purpose code for compilation of R-Return by the Treasury (Foreign).

1.6.In respect of inward and outward remittances handled by AD branches on account of the NAD branches linked to them, income such as commission (other than that levied for issuance of inwa remittance/encashment certificates) shall be shared by the AD branches and NAD branches. Branch handling the collection should collect the appropriate collection charges upfront as and when they are lodged and this would include postage/courier charges, commission, incidental or out of pocket expenses Switft charges, etc.

1.7.However, commission collected by NAD branches in respect of inward remittances/encashment certificates issued by them shall be credited to their P & L account in ful 1.8.Rupee Drawings of Non-Resident Private Exchange Houses: The following Non-Resident Private Exchange Houses maintain account with our Bank and have entered into arrangements with our Bank for drawing rupee drafts for various purposes and SWIFT / electronic transfers

1. Al Fardan Exchange 2. Al Fardan Exchange Co 3. Al Muzaini Exchange Co., 4. Al Razouki International Exchange Co.LLC

Abu Dhabi UAE Doha State of Qatar Safat, Kuwait Dubai, U.A.E

5. Al Rosthamani International Exchange Company 6. Al Ansari Exchange 7. Al Ahalia Money Exchange Bureau 8. Bahrain Exchange Co 9. Bahrain Finance Co 10. Bahrain India Intl. Exchange Co Bahrain 11.City Exchange Co.WLL 12. Emirates India Intl. Exchange 13. Habib Exchange Co ABB 14. Lulu International Exchange LLC, Abu Dhabi 15. Modern Exchange Co 16. Oman and U.A.E. Exchange Centre & Co LLC 17. Orient Exchange Co., Dubai 18. U.A.E. Exchange Centre LLC 19. U.A.E. Exchange Centre WLL 20.Wall Street Exchange Centre LLC 21.AL GHURAIR EXCHANGE COMPANY, (Ref . IOB Online- Treasury (Foreign) Private Exchange Houses) The above list may be updated periodically.


U.A. E

Abu Dhabi, U.A.E. Abu Dhabi, U.A.E. Safat, Kuwait Manama, Bahrain Kingdom of Bahrain Doha, Qatar Deira, Dubai, U.A.E. Abu Dhabi, U.A.E. Abu Dhabi, U.A.E. Ruwi, Sultanate of Oman AL Hamriya, Oman Deira, Dubai Abu Dhabi, U.A.E. Safat, Kuwait Dubai, U.A.E. Dubai

These Exchange Companies have been permitted to issue drafts on NRI Branch of our bank with a

caption PAYABLE AT PAR AT ALL BRANCHES OF IOB. All our branches can pay such drafts. The onus o

verifying genuinity of the draft, verifying the signatures therein lies with the paying branch. Signature

of PEHs are made available in IOB Online- Branch Products- Authorised Signatures of Private Exchang Login and Password. In cases where signatures are not available, branches may take with

houses. To view the Signature in IOB online, the verifying official has to enter the branch code, his CB

correspondent Banking Division, Treasury(Foreign). However, some Private Exchange Houses may continue to issue draft drawn on earlier designated branches. If a draft drawn on the designated branch other than NRI branch, is presented branches should honour such drafts after verifying the availability of issuance of draft and if it is otherwise in be fed by the designated branches without delay and the designated branch should acknowledge having noted the stop payment to the PEH concerned in the prescribed format. (Ref: Treasury (Foreign) Perm.circular 103, dated 18.12.2010) In order to comply with the AML requirement and for a better follow up all Private Exchange Houses Rupee drafts, drawn by Private Exchange Houses up to Rs. 5.00 lacs only. Drafts for above Rs. 5.00 lacs should be returned with the reason Exceeds arrangement. (Ref: Treasury(Foreign) Perm.Circular 68 dated 04.04.2009)

order. In such cases, if stop payment instructions are received from the PEHs, the instructions should

have been advised to restrict issuance of DD upto Rs. 5.00 lacs only. Branches are advised to pay the

To improve the existing system of DD payment and mainly to reduce the burden of branches in making FETS claim and follow-up for elimination of the same, a new menu called FETSLESS VOSTRO has been enabled in CBS whereby branches will be permitted to view the details of the drafts payable by them and effect payment. The new system is introduced effective from 08.01.2009 The salient features of the system are summarised below:

The DD issue data files that are received from Private Exchange houses( PEH) will be loade into the Core server on a daily basis.

The branches should use the new program PAYMENT OF DDS-PRIVATE EXCHANGE COMPANIES AND BANKS only, available in CBS MENU (MODULE FETS PROGRAM NAME: exch). No fets claims are required to be prepared

This menu is to be used only for payment of Rupee dds issued by PEHs and the three bank The branches can access the above a/c thru FETS module and give the particulars of t DDs issued by PEHs. The branches should match the details of the draft issued available the core vis--vis the instrument tendered for payment and if found to be matching, th same is to be posted in the system. In case of mismatch, the branches should take up wi vostro section of Treasury dept, Central office immediately. If the DD tendered for payment is not available in the core server, the branches may retu the same with the reason: ADVICE NOT RECEIVED.PLEASE PRESENT AGAIN.

However in the case of DD issued by the three banks listed above, the system would perm the user to pay the draft. The full details are to be furnished in the relevant columns f prompt reconciliation. For DDs beyond three months ( 6 months in the case of Banks) from the date of issue, t branches should advise the customer to get the new DD issued by the PEH/Bank concern as the same will not be allowed to be paid thru the system. Such drafts if presented may b returned with the reason:


PURPOSE OF REMITTANCE Reserve Bank of India has issued guidelines to Authorised Dealer Banks regarding the permissible appended below for the guidance of branches. The guidelines are equally applicable to remittances received under Electronic Funds Transfer means also. 1. Credit to Non-resident (external) accounts maintained by non-resident Indians in Indian Rupees. 2. Payment to families of Non-Resident Indians. premia / investments. 4.Payments in favour of Bankers for investments in shares, debentures etc., 5.Payment to Cooperative Housing Societies, government Housing Schemes or Estate Developers for acquisition of residential flats by the Non-resident Indians in India in individual names subject to compliance of regulation thereof 6.Payments of tuition /boarding, examination fee, etc to schools, colleges and other educational institutions. 7.Payment to medical institutions and hospitals for medical treatment of NRIs/their dependents and nationals of Gulf countries in India. 8.Payment to hotels by nationals of gulf countries /NRIs for their stay. their travel in India by domestic airlines/ rail etc., 10.Trade Transactions up to Rs.2,00,000 per transaction. Donations/Contributions to charitable institutions shall not be remitted through Exchange Companies. Branches shall strictly adhere to operational guidelines on Anti Money Laundering measures and observe strictly KYC norms for all remittances received through Private Exchange Houses. RUPEE ACCOUNTS OF BANKS AND OVERSEAS BRANCHES: 1.1.Rupee Accounts in the names of certain (Listed in annexure I) Non Resident Banks and our

transactions under the Rupee Draft drawing arrangements with Private exchange companies, which a

3. Payment in favour of Life Insurance Corporation of India, Unit Trust of India and the Post master fo

9.Payment to travel agents for booking of passages of NRIs and their families residing in India toward

Overseas Branches (Hong Kong, Singapore, and Seoul) are maintained by Treasury (Foreign). Branch paying MTs/TTs issued by these Banks to the debit of TTPR account will claim reimbursement from from FETS and included under DDR system. The overseas branches will draw only on CCOs in CCO centres. Branches located in CCO centres may pay the DD/MT to the debit of LDDR a/c and claim

Treasury (Foreign). The payment of DDs/MTs/TTs issued by our overseas branches has been delinked

reimbursement from CCO. Non CCO centre branches and CCOs should debit DDR account and enter t the draft/signature etc rests with the branch only. In case of Rupee TTs received from overseas branches, the concerned branch should debit their TTs Payable Account once the cypher is tallied and credit the beneficiarys account and await IBSA from for this purpose. the Overseas Branches, they should forward Form A1 (For imports into India) or Form A2 (for clean remittances like interest on NRE accounts, repayment of maturity value of NRE / FCNR accounts deposits etc).

details in DDR Paid Summary in DDR-2. The responsibility of verifying the correctness/genuineness of

Treasury (Foreign) for elimination of their TTs Payable entry. They need not submit any claim in R-12

Whenever branches credit Central Office for crediting to the Rupee Accounts of Non Resident Banks a

Direct credit by our Overseas Branches

The facility has been initially introduced at Singapore and would be extended to other centres in course of time. Branches will have to follow similar procedure as and when the facility is extended to other centres. Under the new facility whenever a remitter approaches our overseas branches to effect the remittance either to his own account or to accounts of third parties maintaining account with our branches, overseas branches will directly access the account of the beneficiary by accessing the core server and instantaneously credit the account. The settlement to the Vostro account are taken care internally at Treasury (Foreign). Since the credit to the account would be effected by the overseas branches directly without out the knowledge of the receiving branches, ITD,CO has provided branches with a facility of generating daily print out of the credits effected by overseas branches. Branches should take a print out of the credits effected by overseas branches on a daily basis and monitor the transactions from the AML angle. Branches should scrupulously adhere to the extant guidelines on Anti Money Laundering. Any suspicious transaction such as unduly large volumes routed through relatively inactive/dormant accounts or frequent credits in the same account should be taken up with respective remitting branches to ascertain the genuineness of the transactions.

For effecting remittances in favour of other bank customers, Bulk NEft file uploading/ MT 103 are bein used by our overseas branches.

In case of a wrong credit by the overseas branches, concerned overseas branches will contact the receiving branch and request for reversal of the credit. Upon receipt of such request from overseas branches, the receiving branches should forthwith debit the wrongly credited account and credit the amount to Treasury (Foreign) with full details of the transacti onward credit to the Vostro account of the concerned overseas branches. ITD,CO has provided branches with the facility of generating the relative FIRCs. As and when there is a request from the beneficiaries, branches may invoke the option and generate FIRCs duly adhering to the extant guidelines for issuance of FIRCs. (Ref : Treasury (Foreign) Permanent 82 dated 06.01.2010

Inward Remittance and General Aspects

2.1.Arrangements have been made with and instructions given to our overseas branches/correspondents to avoid drawing in foreign currency on NAD branches. As such, NAD branches will not have any occasion to receive/handle inward SWIFT/ TTs in foreign currency. However, NAD branches may have occasions to purchase under the discretionary powers vested with them other clean instruments such as a)Personal cheques of their NRI customers on their bank accounts abroad. b)Foreign currency drafts/ mail transfers/International money orders drawn on our Bank

c)Instruments drawn on our Correspondent Banks/Other Banks abroad Subject to compliance of the v procedural guidelines given in this chapter and also circulars issued by Treasury (Foreign) from time t time, NAD branches can also handle Foreign inward remittances in Indian Rupees. 2.2. If the amount of foreign inward remittance is for equivalent of Rs.5,00,000 or more, the purpose of such remittance (e.g. capital/investment, savings, dividend, etc.) should be ascertained from the beneficiary. However, for want of this information, branches should not delay payment to the beneficiary. NAD branches handling inward remittances exceeding the equivalent of Rs.500,000 should also ascertain the purpose of remittance and advise it to the designated AD Branch . 2.3.While arriving at the rupee equivalent of inward remittances in foreign currency, branches should apply TT buying rate wherever cover has been provided by the remitting bank to the credit of our banks Nostro account maintained abroad.

2.4.In respect of each clean payment effected by branches, charges prescribed in the schedule of cha

should be collected from the beneficiary of remittance and credited to the branch P & L account

2.5 As per the extant guidelines FIRC should be issued at the written request of the customer specifying the purpose for which the same has been requested.AD branches should issue FI Security Stationery only , duly signed by the authorized official in respect of the following cases: a. Advance Payment for exports b. Receipt of export proceeds by an AD banks other than the one who handles/handled GR forms c. Inward Remittances covering FDIs/FIIs 2.6 In all other cases AD Branches may issue FIRC on their letter Head duly signed by authorized official incorporating the full particulars of remittance. FIRC issued on security stationery or letter head should clearly specify the validity of the same as one year from the date of issue. FIRC Should contain the full particulars of the inward remittance and no item/colomn should be left blank. The beneficiary, at the time of issuing FIRC should be advised about the importance of preserving the Original FIRC (Ref: Treasury (Foreign) permanent cir No: 69, dated 04.04.2009)

2.7.Branches should note to collect commission at the rate prescribed in the schedule of charges for issue of ban certificates on security paper in respect of payment of clean remittances from abroad.

2.8.When a resident recipient of a foreign inward remittance desires to open EEFC account, branches should not to follow the RBI guidelines. These accounts can be opened/maintained only by AD branches and some select NAD branches of our bank, as may be decided by Treasury (Foreign) from time to time. Branches other than the select AD branches should take up with the concerned designated AD branch and arrange to get the account opened. Please refer to Chapter I of this volume for full details on the operations of EEFC accounts.

2.9.While effecting payment of (the entire rupee equivalent of) clean instruments (by purchasing the instruments within branch discretion) where the proceeds are to be realised to the credit of our Nostro account, AD branches shall pass the following accounting entries: Debit : DBPF account (At Bills buying rate) Credit : Cash/beneficiarys account (Rupee equivalent less transit period interest and commission) Credit : P & L account (Interest received) Credit : P & L account (commission) On realising the amount to the credit of our Nostro account, Debit: FETS account of Treasury (Foreign) - Correspondent (for actual realisation)

Debit: Partys Account-towards correspondents charges, if any at TT Selling rate. Credit: DBPF account

2.10.NAD branches can handle the instruments drawn in foreign currency on collection basis or they can purcha the same, at the request of their customers and the decision is based on commercial judgement. If they are purchasing (the entire rupee equivalent of) clean instruments such as drafts/mail transfers drawn on Central office/other AD branches or correspondent banks abroad and personal cheques of NRI customers on bank accounts abroad in foreign currency should:

a)ensure and satisfy themselves that the authenticity and genuineness of the instruments to be purchased and that there are no stop payment instructions against the instruments under reference b)obtain appropriate exchange rate from the designated AD branch and effect payment to beneficiary if the instruments are otherwise in order, and report the transaction to the designated AD branch (wh in turn will report the purchase to Treasury (Foreign) and on passing the accounting entries in their books c)forward the instrument to the designated AD branch/drawee branch with a covering schedule indicating the rate applied and the rupee equivalent thereof and the purpose of inward remittance, if the rupee equivalent is Rs.5,00,000 or more, retaining a copy of the instrument along with the endorsement.

2.11.NAD branches handling clean foreign currency instruments shall pass the following entries in the books : Collection: Lodge the instrument in ICB module and pass the contyra.On receipt at the AD link branch the instrument will be processed in the usual manner and sent for realisation. On realisation, the following entries will be passed by AD branch. Debit : FETS a/c of Treasury (FOREIGN) a/c Correspondent (for the rupee equivalent at the same buying rate as applied by NAD branch) Credit: COMPASS a/c of the NAD branch On receipt of the IBSA instrument, the NAD branch shall reverse the contra and credit the beneficiary account, subject to the cooling period stipulations indicated in paragraph 2.18 below. Purchase by NAD: Debit: Demand Bills Purchased (Foreign) (for the rupee equivalent at the rate obtained from the designated AD branch) Credit : Cash/Beneficiarys account (Rupee equivalent less commission and interest for transit period, wherever applicable and commissio for issuance of inward remittance certificate) Credit: P & L a/c (Interest received) Credit: P & L a/c commission (for the certificate issued)

2.12. The AD branch, on receipt of the instruments, shall examine and ensure that the instruments a in order, lodge them in the DBPF (RR) module in CBS Menu as the case may be, and pass the following

accounting entries.

i. In respect of instruments where our Nostro account has already been credited with the amount of foreign exchange purchased by the (NAD) branch: Debit : FETS a/c of Treasury (FOREIGN) a/c Correspondent (for the rupee equivalent at the same buying rate a applied by NAD branch) Credit: COMPASS a/c of the NAD branch

On receipt of the IBSA instrument, the NAD branch shall reverse the DBPF outstanding in its books. ii. In respect of instruments (e.g. drafts on banks abroad or personal cheques on bank accounts abroad) to be sen abroad for realisation, the AD branch will lodge them in their DBPF Received For Realisation register, pass the following contra and forward the instruments abroad for realisation. Debit : DBPF Received for realisation Credit : DBPF Realisable (at the rate in which the transaction was reported by the NAD branch) On receipt of the realisation advice, the AD branch shall pass the following accounting entries and credit the rup equivalent to the NAD branch at the rate at which the purchase was originally vouched at and reported by the NAD branch. Debit : FETS a/c Treasury (FOREIGN) a/c correspondent Credit: COMPASS a/c of the NAD branch AD branch shall also reverse the DBPF-RR contra passed at the time of lodgment of the instrument in their registers. The NAD branch, on receipt of IBSA instrument from the designated AD branch, shall reverse the outstanding under DBPF in its books.

2.13.While the instruments in Indian rupees drawn by our overseas branches/correspondents on NAD branches can be independently handled by the NAD branches themselves, as per the procedures detailed above, R-Return procedures will be handled by Treasury (FOREIGN), for which branches should furnish the purpose of remittan in the FETS claim. 2.14.In respect of foreign currency/rupee remittances handled by the NAD branches, the foreign inward remittance certificate can be issued by the NAD branch concerned observing the procedural guidelines given in the foregoing paragraphs.

2.15.AD branches and NAD branches of our bank can handle clean instruments in rupees issued by banks abroa on other banks in India by lodging them in and ICB module, presenting them directly to the drawee bank

concerned and obtaining payment in Indian Rupees. Wherever necessary, branches should ensure receipt of foreign inward remittance certificate from the drawee banks concerned and deliver the sam to the customers against their acknowledgment.

2.16.While despatching clean instruments to Correspondent Banks abroad, the AD branch should use cash letter forms and seek immediate credit under usual reserve in respect of instruments payable in countries where the Correspondent Banks have supplied pre-printed cash letter forms. In respect of instruments on Countries/Correspondents, who have not supplied cash letter forms, the instruments can be sent as an enclosure to a simple covering letter in our Bank Letter head with instruction to process and credit the proceeds to our account under usual reserve, subject to final payment. The proceeds of item sent through a cash letter are credited to our Nostro A/c with recourse to ourselves and are subject to usual reserves. The credits are provisional and the funds generally become clear after the prescribed cooling period. If and when an item is returned unpaid by the drawee bank, the correspondent will debit the returned amount together with their charges and the same will be indicated in the branch folder under Nostro Online. Branches should recover the amount immediately and credit Treasury (FOREIGN). For reasons of forgery / fraud etc., the return period may even extend to more than si years longer periods.

2.17. a.Clean instruments like TC, Drafts/Cheque, Money Orders payable abroad do not come under the purview of Uniform System of Numbering. Hence it is essential to give separate reference numbers for clean items, whether the system of cash letters is in vogue or not. Separate reference numbers for such clean items may be prefixed to branch code number with ODBF/FCP (Foreign Cheques Purchased) as the case may be.

b.In cases of those branches to whom cash letters have been supplied by certain Correspondents the details of reference should be brief in conformity with the space provided for the purpose (number of characters).

c.Separate cash letters should be used for items purchased, sent on collection and for placement in FCNR deposits. Under no circumstances, they should be clubbed together with other instruments. d.These instructions are equally applicable for sending instruments using Banks printed remittance schedules where cash letter facility is not available.

e.As many European countries are returning cheques sent on collection, if it is not endorsed by the payee or the beneficiary, branches should ensure that the payee / beneficiary has signed on the reverse of the instrument and that there are no missing endorsements. This procedure may b uniformly adopted irrespective of the country on which the instrument is drawn. Branch should also affix proper endorsements as applicable. Further, they should ensure that only one crossing stamp is affixed on the face of the cheque (NAD/AD) and the reference no. stamp is affixed on the reverse. Branches should note that many correspondents (especially EURO) levy high charges for missing / incorrect endorsement or for clubbing of cheques drawn on different countries in one cash letter.

f.Cash letters and remittance schedules should be prepared on a daily basis even if only one item is to be sent and should be despatched on the same day.

g.As and when branches debit FETS account towards realisation, they should do so for the entire amount of cash letter less returns if any. In other words, there should not be several FETS debits for single cash letter deposit. Additionally, the branch should also indicate whether the instrumen is to be sent for final realisation or for immediate credit under usual reserve. When NAD branches forward the instruments to AD branches, this instruction must be followed equally.

2.18. In case of instruments sent abroad for immediate credit under usual reserve AD branches should pass on the proceeds to NAD branches on receipt of one copy of the cash letter advice from the correspondent. NAD branches should be aware of the possibility of reversal of Nostro credit if the instrument is returned unpaid. NAD branches should exercise their discretion in crediting the proceeds to the party immediately on receipt of the IBSA instrument from the AD branch, depending on the standing and reputation of the customer or allow the credit but with approval of the customer to draw the amount after cool off period prescribed by Treasury (FOREIGN). 2.19.Foreign Contribution Regulation Act, 2010 (FCRA): Associations having a definite cultural, economic, educational, religious and social programmes and receiving foreign contributions (say, Religious or Educational trusts, other trusts, clubs, groups or associations of persons or organizations or any other entity which come under the purview of FCRA) should get

themselves registered with the Ministry of Home Affairs, Government of India, New Delhi before receiving any remittance from abroad. Such remittances should be received only through the designated bank branch specified by them in their application form. A copy of the registration wil be directly sent by the Ministry to the branch. No other credits are allowed except foreign contributions in such accounts. If credits are received from Treasury (FOREIGN) through draft / ABB / IBSA, branches should ensure that provisions of AML 2002 Prevention of Money Laundering Act (PMLA 2002) and FCRA, 1976 are complied with in such accounts. Branches should forward a copy of the permission received from Ministry of Home Affairs to Treasury (Foreign). The account should be regularly monitored and any abnormal inflow or outflow should be brought to the knowledge of the higher authorities immediately. Branches who that are having such accounts should send a half yearly statement to Government of India as on 30th September and 31st Marc every year giving details of the contributions received for crediting into such accounts, within two months of the closure of the half year. Branches may refer to the circular FX/31/2011-12 dt 28.02.2012 to know about the obligations of Banks under the Foreign Contribution Regulation Act (FCRA), 2010

2.20. CHECK 21: The U.S. Government passed a federal law The Check Clearing for the 21st Century Act which came into effect from 28.10.2004 regarding cheque clearing, popularly known as CHECK 21. Under this system, instead of the original cheque, a substituted cheque which is paper reproduction, created out of the digital image of the original will be presented in the clearing. Subsequently even this will be replaced by the digital image which will be transmitted by the collecting bank to the paying bank. This process is known as Cheque Truncation. The Correspondents may destroy the original cheque without our permission after making electronic copy. In case of cheque return, the original cheque will not be sent back by the correspondent an this fact must be brought to the knowledge of the depositing customer. Branches must affix a rubber stamp on the counterfoil reading original cheques will not be returned back as per US Law, if cheques are returned unpaid. 2.21. US Dollar Cheques Collection: Branches have to use the following products which are currently available. International Cash Letter Services: . All cheques denominated in USD and payable in US upto USD 10,000 should be sent for collection to JP Morgan Chase, Mumbai under their Cash Letter Services irrespective of their designated USD correspondent. Regional Offices concerned are authorised to permit the branches to send cheques above USD 10,000 but upto a maximum of USD 25,000.

JP Morgan Chase will make arrangements to collect cheques from the AD branches for onward transmission to their Mumbai office through their authorised couriers at their cost.

1) The cheques should be handed over to the courier in a closed cover addressed t
J. P. Morgan Services India Pvt. Ltd. Check Processing Center Treasury & Securities Services

Paradigm B, 9th Floor, Malad Link Road, Mumbai 400 064

1) JP Morgan will transmit the image of cheques after truncation to Ne York for clearing purposes.
REF: Ref No. : FX / 11 / 2011-2012

Date : 04.07.2011
USD CHEQUE COLLECTION POLICY Final Credit Service (cheques not covered under Cash Letter Service, of value above USD 10,000/- upto maximum of USD 500,000/- drawn on USA and denominated in USD.)

a) The Secure Collection Service covers cheques of value above USD 10,000/- upto maximum of USD 500,000/- drawn on USA and denominated in USD. All our A branches will use this facility to collect the USD denominated cheques payable US, for cheque above USD 10,000/-.

b) JP Morgan will allow us to obtain finality of payments against fraud on the front the cheque in 6 days if the cheque is drawn on JP Morgan Chase or in New Yo City and in 15 days if the cheque is drawn outside New York City. Dishonour cheque will be notified within these time frames. 1. CHARGES: The charges quoted by JP Morgan Chase for Secure Collection Service are follows: Amount in USD Charges 9999.99 USD 9.00 10,000 249,999.99 USD 10.00 250,000 and above USD 13.00

2. ADVANTAGES: Cheques under this scheme will be collected on a final credit basis. That is the cheques are returned for reason other than fraud, J.P. Morgan will n debit/recall funds after it is credited to our Nostro account. Branches can b assured of the final payment.

Branches are approved to release the credit for USD cheque collection items after 15 calendar days from the date of credit to our Nostro account as against the existing practice of 21 days. Collection charge as applicable should be collected upfront in additio to postage and other out of pocket expenses. A letter as per annexure II should be obtained from the customers. New accounts, In-operative and dormant accounts and

other suspected category accounts are kept out of the purview of the scheme and they should be routed through Preferred Collection Service (PCS) Scheme. Cheques not conforming to ICLS and PCS, should be sent to the respective correspondents on Collection and final credit basis. Note: AD/NAD branches should retain a photocopy of the front and back of all instrumen purchased/sent on collection. In case such instruments are lost, the collecting bank can try to obtain payment from the drawee bank by submitting the photocopy copies and an indemnity. This would also facilitate follow-up of unpaid instruments. 2.22.AD branches should pass credit entries for clean remittances relating to SB, CD, Deposit Customers and advance payments for exports only on receipt of authenticated payment instruction either in the form of SWIFT MT 103 message or a tested telex payment order. a.Passing entries against credits found in the statements received directly from the Correspondents representing clean inward remittances by AD branches is strictly prohibited in the absence of an authenticated payment instruction and branches should take up with Treasury (FOREIGN) for authorisation to vouch. On receipt of the same and the credit to their branch code in Nostro Online, branches can proceed further for vouching.

b.Branches should maintain a register for all inward remittance payments, corresponden wise and they should check the same thoroughly whenever they receive any authenticated payment instruction in the form of a SWIFT MT 103 or a tested telex payment order much later than the value date. Only after ensuring that the credit is available in Nostro Online against the branch code should they raise a FETS claim and credit the beneficiarys account.

c.At times remittances messages are sent to the SWIFT address of Treasury (FOREIGN) b our correspondents. If they relate to our AD branches, Treasury (FOREIGN) will make arrangements to transmit the same through FETREM. Messages related to NAD branches are vouched at Treasury (FOREIGN) and proceeds are remitted through ABB / IBSA.

d.One of the purposes of introduction of Nostro Online and on line FETS claim vouching is to avoid double vouching by branches for the credit in the statements received at the branches from the correspondents and the authenticated payment instruction separately received. Branches should debit FETS only if they are in possession of an authenticated payment instruction and any lapse in this regard will be viewed seriously. 2.23.The US Postal authorities have added a restrictive clause to all domestic postal money orders. This clause does not allow for the item to be negotiated outside the United States. Domestic money orders without this endorsement continue to be valid and negotiable internationally. Branches should not accept US Postal Money Orders with restrictive clause reading as Negotiable in USA only and return the same to the presente

without forwarding it to any US Correspondent. SWIFT / TELEGRAPHIC TRANSFERS

3.1.International Money Transfers for customers are routed through SWIFT in MT 103 an telegraphic transfers are negligible in number. AD branches which have been provided with a SWIFT terminal can receive the remittance messages relating to their customers directly and for other AD branches who do not have SWIFT connectivity, the messages, if received at Treasury (Foreign), will be published through FETREM. All the messages received should be recorded in the inward remittance register. The AD branch should locate the credit in its branch folder in Nostro Online and proceed for vouching. In case the remitting bank chooses to transmit the message to Treasury (FOREIGN), the messag will be published to the AD branch concerned through FETREM software for vouching. As messages received at Treasury (FOREIGN) are published periodically, branches should ensure that they are online till closing hours. The print out is available only for one day and hence, it is imperative that the branches should take the printout of the MT 103 as soon as they see an alert message indicating new SWIFT MT 103 received. A preview option is available and branch should ensure that the message relates to their branch before taking a print out. A message ID is displayed which should be quoted in any communication with Treasury (FOREIGN). When the nostro credit is for a lesser amount, the same will also be indicated, to enable the branches to report and vouch the correct amount. If the remittance is meant for opening of FCNR/EEFC account, the same is also indicated in the publishing and branches should be watchful for such alerts. The AD branch can download and take a print-out and after blocking the credit in Nostro Online, can proceed for vouching. The message will be published only once and there is no facilit for re-publication and in case a branch could not process under exceptional circumstance they need to take up with Treasury (FOREIGN) for a hard copy of the message. 3.2.Treasury (FOREIGN) will process the MT 103 relating to NAD branches received at their end and remit their proceeds by ABB to all connected branches, directly to the beneficiary customers account. In case the branch is not having the ABB facility or happens to be closed due to holiday or due to technical issues, original IBSAs will be generated by Treasury (FOREIGN) and will be sent to the concerned branch directly. Branches should respond the same without delay and credit the beneficiarys account.

3.3.When correct beneficiary details are not available, Treasury (FOREIGN) will not be able to vouch the MT 103 received by them. A list of unidentified MT 103 is displayed in Treasury (FOREIGN) home page under information gallery and in case any of the branche are able to identify the beneficiary correctly based on the details available in the remittance, they can take up with IR section, Treasury (FOREIGN) for receiving the credi Branches should note that in case we they are unable to apply the funds and the correspondent requests for refund of the Nostro credit, such debit authority shall be give only by Treasury (Foreign) and not by branches.

3.4. With the phasing out of telex machines in India, telegraphic transfer for internationa remittances are very remote. Still procedures are outlined herein to enable branches to handle such transactions, in case of need. Only the AD branches of our bank shall be receiving telegraphic/telex transfers expressed payable in foreign currency. AD branches receiving such telegraphic/telex transfers, should record the details thereof in the Telegrams Received Register. 3.5.The authorised official of the branch, who is the custodian of the Test Key, should check the cypher in the telegraphic/telex message with the Test Key supplied by the issuing bank and if the cypher tallies with that in the test key, should authenticate the message, clearly indicating Test Tallies for _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (indicate the currency and amount in words) under his / her signature and date, with branch seal.

3.6.If the message is tested with another branch or bank, branch should arrange to send the original message along with a photocopy of the original message to the concerned branch/bank with a request to decypher the test and authenticate the TT cypher and return the original message duly authenticated by the authorised official of the decyphering branch/bank, retaining the photocopy for their files. 3.7. The details of the decyphered TT should be entered in the Telegraphic Transfer Payable Register. Separate folios must be allotted in this register for foreign TTs or a separate register may be maintained depending upon the volume of transactions. 3.8.Branches have to identify the related credit in Nostro Online in the branch folder and after blocking the same, proceed for reporting and vouching the TT received.

3.9.When branches receive SWIFT MT 103 / TTs with specific instructions to pay the beneficiary after advising him of the receipt of remittance, a payment Advice (in a set of four copies) expressed payable in foreign currency is to be despatched immediately the beneficiary. The first copy is the covering letter to the beneficiary. The 2nd and 3rd copies serve as receipts. The beneficiary has to present the second and third copies duly discharged for claiming payment. The second copy is to be discharged over revenue stamp. The fourth copy is the branchs office copy. When the second and third copies are presented duly discharged, the issuing branch should effect payment in equivalent Indian rupees at the TT buying rate ruling on the date of payment. Branch should avoid conversion of foreign currency remittance into Indian Rupees when the remittance message indicates that the credit is for FCNR-B account or the like to avoi exchange loss on reconversion at a later date, if the customer disputes the conversion. 3.10.In case the SWIFT MT 103 / TT contains specific instruction to credit the beneficiarys account with another bank, branches should prepare a bankers cheque (or demand draft, as the case may be) for the rupee equivalent in favour of the concerned

bank a/c beneficiary, with a suitable covering letter to credit the proceeds under advice t the beneficiary. 3.11.In case of cash payments to beneficiary (if mentioned in the TT / MT103 which is mostly for foreign tourists), who is not our customer, branches should note to effect payment on proper identification of the beneficiary as mentioned in the payment instruction. 3.12.Branches should note to promptly report the purchase of foreign currency to Treasury (FOREIGN) on the date such purchase takes place.3.13.On receipt of the TT confirmation from the issuing bank, branches should note to check the details of the payment already effected with those in the confirmation and make a note thereof in the relevant column of the TT payable register. MAIL TRANSFERS 4.1.Branches should effect payment of only those MTs which are issued payable at our bank/branches. NAD branches can also effect payment of MTs issued by overseas branches/correspondents in foreign currency as well as in Indian rupees, observing the relevant procedural guidelines contained in the subsequent paragraphs and the general instructions regarding obtaining exchange rate, accounting procedures, reporting systems, issuance of foreign inward remittance certificate, etc. in the foregoing paragraphs of this chapter. 4.2.The authorised official of the branch should verify the signature on the MT by reference to the specimen signature booklet supplied by the issuing bank and affix the signature verified stamp under his initial and date. 4.3.In case the specimen signature of the correspondent is not available at the branch, the signatures on the MT should be got verified by the Main branch or by Treasury (FOREIGN).

4.4.The details of the duly authenticated MT should be entered in the MT Paid Register. Separate folios may be allotted in this Register for each correspondent / overseas branch

4.5.Branches should ensure availability of cover funds through the link AD branch with full details of the MT to be paid and arrange to pay the rupee equivalent to the beneficiar without any delay,. obtaining the rate from the AD branch who will complete the reportin formalities. 4.6.In case the MT contains specific instruction to credit the beneficiarys account with another bank, branches should prepare a bankers cheque (or demand draft, as the case may be) for the rupee equivalent in favour of the (concerned) bank a/c beneficiary and

forward the same with a suitable covering letter to credit the proceeds under advice to beneficiary.

4.7.For remittance in Indian Rupee, to avoid delay, our Singapore branch would use SWIFT instead of Mail Transfer dispatch by courier. They will send a SWIFT MT 103 directly to beneficiarys branch if it is connected by SWIFT or to the nearest SWIFT branc in the same city. When the beneficiary is not its own customer, the SWIFT centre branch, should debit TTPR and credit the beneficiary branch through CCO account, if it is in a CCO centre or credit by IBSA if it is a non-CCO centre. Treasury (FOREIGN) will reimburse the SWIFT centre branch directly. DEMAND DRAFTS 5.1.Branch should verify whether the drafts are drawn on our bank/branch or drawn on another bank in India or on a bank abroad.

5.2.After verifying the signatures of the officials of the issuing bank, and that there are n stop payment instructions from the draft issuing bank, branch should lodge

a).The drafts drawn on our bank/branches in the drafts payable register b).The drafts drawn on other banks in India in the ODB register (For recording the draft particulars) c).The drafts drawn on banks abroad, in the DBPF register, if the instruments are going t be purchased. (In case the drafts are accepted on collection basis, then the instruments should be lodged in the ODBF - clean collections register). 5.3.Rupee equivalent of the draft in foreign currency should be arrived at applying appropriate buying rate when instrument is purchased. 5.4.AD/NAD branches should pass the necessary accounting entries and the rest of the formalities like reporting, ascertaining the purpose, issuance of bank certificate, etc. should be complied with, as in the case of payment of MTs. 5.5.In case of cash payments to beneficiary, who is not our customer, branches should note to effect payment on proper identification of the beneficiary. Personal Cheques and other clean instruments: 6.1.AD branches and NAD branches of our bank can encash personal cheques of NRIcustomers of good standing and satisfactory past track record, observing the other precautions for purchase of cheques and subject to the Manager having the necessary discretionary powers to purchase such cheques.

6.2.Branches should verify the signature of the customer on the cheque with that in the specimen signature card and lodge the cheques in the DBPF register, if they are to be purchased or in the ODBF register, if they are accepted on a collection basis.

6.3.Branches should apply appropriate buying rate to arrive at the rupee equivalent of th foreign currency and credit the rupee equivalent after collecting appropriate transit perio interest and commission. As per the existing guidelines, collection charges are to be collected upfront.

6.4. NAD branches should expeditiously send the instruments purchased by them as well as those accepted by them for collection to the designated AD branch for realisation. In their remittance schedule to the designated AD branch, the NAD branches should clearly indicate: a).Whether the instrument is purchased by them and if so, their reference number and rate applied etc. b).Whether the instrument has been accepted for collection or for opening FCNR deposit and if so the reference number. 6.5.NAD branch also should indicate whether the instrument has to be sent for final realisation or for immediate credit under usual reserve.

6.6.Branches must note that unless specifically requested by the customer, they should not purchase the instruments as some customers may not be willing to bear additional charges other than the collection charges. While purchasing the cheques/drafts, branche should collect interest as applicable and they have not discretion to waive the same.

6.7.AD branch should adopt the procedure outlined in foregoing paragraphs for despatch of the instruments to correspondent banks abroad for realisation. On receipt of the realisation advice from the correspondent bank, the AD branch shall credit their DBPF account in respect of the instruments purchased by them and credit the NAD branches fo the purchases made by the latter through COMPASS account. In respect of instruments sent on collection, the AD branch shall credit either their customers account or the NAD branch concerned at TT buying rate for the currency concerned. In respect of instrument meant for opening FCNR accounts, the AD branch shall credit their FCNR account or credi the designated NAD branch concerned at the notional rate for the currency concerned. Remittance Products Currently available for remittance from abroad:

7.1.Money Home: This facility is currently available for remittance from USA. The remitte need not be our customer and he has to log on to our website and generate a deposit slip and one copy of the same along with the cheque should be mailed to our Mail box in New Jersey, USA. Treasury will credit the branch on sighting the credit in our Nostro account

and a fee of USD 10 will be charged. The amount is currently restricted to instruments payable in USA and only up to USD 2000 at a time. The Nostro credit is subject to usual reserve and hence if the branch is doubtful of recovery in case of cheque return, they should release the credit after expiry of 21 days of cooling period. Branch should comply with KYC guidelines for the beneficiary, as the beneficiary may not be our customer.

7.2.Xpress Money Electronic Remittances from UAE: UAE Exchange Centre, Abu Dhabi has entered into an arrangement with our Bank to handle remittances favouring beneficiaries in India, through certain designated branches. All branches who are provided with the FETREM chat facility can handle the transaction. The remitter in UAE will remit the money through UAE exchange Centre after completing the formalities. He will be provided with a Xpin number to be passed on to the beneficiary/receiver. The transaction is then put on the Money Transfer Payment System of UAE Exchange Centre. The beneficiary can go to anyone of the designated branches and after identifying himsel with the acceptable documents and filling up the necessary form, can claim the money. The branch will take up with Vostro Section, Treasury (FOREIGN) with the basic details o remittance, reference number, name of the remitter, name and address of the beneficiary country of origin etc. along with the agent code, through chat facility. Treasury (FOREIGN) will log on to the website and if the details are found to be correct, block the transaction and advise the branch concerned through chat facility to effect payment on proper identification. For identifying the recipient, branch should call for any one of the PHOTO IDENTITY such as Passport, Driving License, Ration Card, Voters ID, PAN Card etc. All IDs containing expiry dates should be valid on the date of payment and branch should retain a photocopy of the ID for their records and also for future inspection requirement. R-Return reporting is not required, as the transaction is a rupee transaction RBI Regulations: 1.Only personal remittances towards family maintenance and remittances favouring foreign tourists are allowed. 2.Trade related remittances, remittances towards purchase of property, investment, credit to NRE/FCNR accounts or donations/contributions to charitable organisations are not approved. 3.Any single remittance shall not exceed USD 2500 or its equivalent. 4.A single recipient can receive only twelve remittances in a year. 5.Payments in India shall be made in Indian Rupees only and payments of Rs.50,000/and above shall be paid by way of DD/BC or direct to the account of the recipient. 6.FIRC should not be issued to the recipients.

7.Under exceptional circumstances a foreign tourist recipient may be paid in cash for amount of Rs.50,000/- and above.

Accounting Procedure: Branches should debit their TTPR a/c (TT paid and Reimbursable account code 2567) and pay the claimant. Treasury (FOREIGN) will reimburse through IBSA, generated based on chat confirmations. Separate claim need not be submitted by the branches. Issue of Duplicate Foreign Inward Remittance Certificate 8.The following guidelines should be followed while issuing duplicate Foreign Inward Remittance Certificate (FIRC): a)The loss should be reported immediately to FEDAI through FED CO Treasury (Foreign) for circulation among member banks.

b)The duplicate FIRC will be issued by the branch concerned on their being satisfied abou the track record of the beneficiary and after the loss of original has been circulated by FEDAI.

c)An indemnity should be obtained from the customer indemnifying the bank against any consequences or loss arising out of issuance of a duplicate FIRC. The indemnity should be obtained from the beneficiary of the remittance who applies for duplicate FIRC.

d)If the beneficiary of FIRC is not a customer of the issuing bank, the indemnity should b countersigned by the beneficiarys bank.

e)Commission upto a maximum of Rs.1000/- per certificate for issuance of duplicate FIR should be collected from the beneficiary.

f)The duplicate FIRC should be suitably superscribed and bear the same number as that o the original. OUTWARD REMITTANCE

9.1. Only the AD branches of our bank are approved to make foreign outward remittances both in Indian rupees as well as foreign currency. When customers of NAD branches approach them for issuance of foreign outward remittance by way of Drafts or TTs or by SWIFT, NAD branches should take up with the AD branch designated to them for issuance of DD or SWIFT / TT, furnishing all the relevant documents/details.

9.2. Branches handling foreign outward remittances in Indian rupees or foreign currency should satisfy themselves that the remittance solicited is within the powers delegated to

the ADs by RBI under FEMA, 1999. For guidance on exchange control FEMA regulations, branches may refer to the master circular issued by the Reserve Bank every year on the 1st of July on Exports, Imports, PEM Project & Service Exports, Miscellaneous Remittances from India for residents, Remittance facilities for NRIs / PIOs / Foreign Nationals etc. Branches should be guided by the rules made by Government of India unde section 5 of FEMA, 1999 which are detailed in the Foreign Exchange Management (Curren Account Transaction) Rules, 2000. Branches must ensure that the transactions are not among the items listed in Schedule I of the said rule which are totally prohibited or the approval of the Ministry / department of Govt. of India is available for the items listed under Schedule II. For items appearing under Schedule III, ADs can remit upto the ceilin prescribed under the delegated power and obtain permission from the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the applicant is functioning/residing. The topic has been discussed in detail under chapter I. Though this chapter essentially deals with clean outward remittances for purposes other than imports the procedural aspects contained in this chapter will apply to outward remittances relating to imports as well as outward remittances connected with exports.

9.3.In case the amount or purpose of remittance solicited does not fall within the scope o powers delegated to them by Reserve Bank of India, branches should ensure that the remittance is made only against the approvals granted by RBI in the name of the applicant for the remittance. Branches may assist the applicant in obtaining the necessar approval from RBI by forwarding the application in prescribed form (in duplicate) duly executed by the applicant to RBI along with requisite enclosures. Branches should note t comply with the terms and conditions of the approval and the foreign exchange should be sold within the validity of the approval. The details of the sale should be endorsed on the reverse of the original approval.

9.4.If only part of the amount is remitted and if further remittances are prohibited as per the conditions of the approval, after endorsement, the approval should not be returned to the party but retained by branch for future verification.

9.5.In some specific cases, RBI issues approvals indicating name of a bank/branch who i authorised to release exchange under the approval. Hence, branches should note NOT to release exchange against approvals in which name of some other bank/branch is authorised to sell exchange. In case the approval holder desires to secure release of exchange from a branch other than the one indicated in the approval, an application (in duplicate) to the effect should be made to RBI through the branch from whom the approval holder desires to secure release of exchange and only on receipt of the approva suitably amended by the issuing office of RBI, branch should proceed to arrange for the outward remittance.

9.6.For all outward remittances for purposes other than imports, branches should obtain application in form A2 duly executed by the applicant. The form should clearly indicate th

details such as name/address of the applicant, purpose, currency and amount of remittance, purpose code under which the remittance is to be made, etc. For miscellaneous non-trade current account transactions of value less than USD 5,000, branches may obtain simplified Application cum Declaration form annexed to the master circular. Wherever necessary, documentary evidence of the purpose of remittance in the form of brochures/pamphlets received from the beneficiary of remittance should also be enclosed to the application form. Branches should provide hassle free remittance facility for purposes like Education abroad, Employment abroad, medical treatment abroad etc., in terms of Reserve Bank guidelines which stipulates that such requests can be processed against the self declaration of the applicant within the permitted ceiling. Form A2 should be retained for a period of one year by the AD branch along with related documents, for the purpose of verification by our internal auditors.

9.7.To avoid duplication of exchange release against the same documentary evidence (vi pamphlet/brochure etc.) more than once, branches should, after effecting the remittance brand the documentary evidence with the branch seal and particulars of remittance made under the initials of the authorised official of the branch.

9.8.For all outward remittances in foreign currency for purposes other than imports, branches shall apply TT selling rate ruling as on the date of such remittance. Detailed instructions regarding obtaining exchange rates by reporting to Treasury (FOREIGN), contained in chapter 1 in this volume should be complied with. Whenever the branch is handling a remittance by applying a notional rate instead of a firm rate, to the debit of FCNR B deposit, EEFC / RFC / RFC (D) or any other Foreign Currency Loans, they should report the transaction through the notional rate reporting mode in FETREM, to the dealin room. Branches should guard against processing any outward remittance by DD or SWIFT without reporting, as it would result in overdraft in the Nostro account and the erring branch would be held responsible for the same.

9.9.Branches can accept the rupee equivalent of the outward remittance in cash only if the remittance is for an amount less than the equivalent of Rs.50,000/= For remittances equivalent to Rs.50,000 or more, payment (for the entire amount of foreign exchange to be sold) must be received either to the debit of the applicants account with us or by a crossed cheque on a bank in our favour or by debit to the debit/credit card of the accoun holder.

9.10. For all outward remittances in foreign currency for purposes other than imports, charges as prescribed by Treasury (FOREIGN) should be recovered. Branches should also collect all actual out of pocket expenses by way of postage, telex charges, etc. including those of correspondents charges from the applicant for remittance. 9.11.Branches should pass the following accounting entries while remitting through SWIFT /TTs/DDs in foreign currency :

Debit : Cash/Partys account (for rupee equivalent plus commission and postages) Credit: Treasury (FOREIGN) a/c correspondent Credit: P & L account (commission) 9.12.Branches should duly certify the form A2, endorse the RBI approvals (wherever applicable) and retain them at their end. SWIFT 10.1.Outward remittances other than DD/MT are sent by SWIFT MT 103 format for individual customer transfer. Branches should get the TT challan duly filled in by the applicant along with the other documents indicated in the foregoing paragraphs.

10.2.After ensuring that the transaction complies with the current FEMA Exchange Contro guidelines and that the applicant has sufficient balance in his account with us, branch should refer the transaction to the Manager in the Business Referred Register and obtain his approval.

10.3.The details of the remittance to be made should be recorded in the Non-Imports sal register, the TT selling rate should be obtained from Treasury (FOREIGN) and the accounting entries passed as per details in the foregoing paragraphs. The RBI approval (wherever applicable) should be endorsed and retained with the branch, along with form A2.

10.4.Branch should then select the Correspondent to whom the SWIFT should be sent (as per guidelines of Correspondent Banking Section, Treasury (FOREIGN)) and draft the message as per the format for sending it to the Correspondent.

10.5.In case the AD branch is a non-SWIFT centre, the message to be transmitted should be prepared in appropriate SWIFT format and signed by two officials. The written message should be authenticated by a test cypher on the SWIFT link branch and communicated by e-mail / telex / hand delivery, without delay to them. In the absence o above communication medium, tested messages can be conveyed over phone by an authorised official of the remitting branch to an authorised official at the other end and then it should be followed up with a mail confirmation. Fax should not be used for such communication. At the SWIFT centre the cypher should be checked and tallied before the message is approved for communication. Only when the cypher agrees, messages should be entered in the SWIFT terminal for further verification and authorisation in the SWIFT terminal before transmission. 10.6.Normally outward remittances through SWIFT are remitted with instructions to the correspondent to deduct their charges from the remitted amount. However, some correspondents debit our Nostro account for their charges, irrespective of instructions

contained in the message. Hence for small value remittances, say GBP 100 or less or equivalent in other currencies, branches may remit the amount by Drafts. If the custome insists remittance by SWIFT only, should be appraised of the above situations and then proceed towards remittance. 10.7.While drafting the messages branches should ensure that they are error-free and they should be fit for Straight Through Processing (STP). If errors are present, correspondents have to repair the message and such repairs result in heavy correspondent charges. These should be avoided at any cost. Demand Drafts

11.1. Branches should get the DD challan form A2 duly filled in by the applicant along wit the other documents indicated in the foregoing paragraphs. 11.2.After ensuring that the transaction is absolutely in accordance with the current Exchange Control FEMA guidelines, and that the applicant has sufficient balance in his account with us, branch should refer the transaction to the Manager in the Business Referred Register and obtain his approval.

11.3.The details of the remittance to be made should be recorded in the DD Issued Register, the TT selling rate should be obtained from Treasury (FOREIGN) and the accounting entries passed as per details in the foregoing paragraphs. The RBI approval (wherever applicable) should be endorsed and retained with the branch, along with form A2. 11.4.Branch should then select the correspondent on whom the DD is to be drawn and prepare the Draft using pinpoint typewriter. Branches supplied with pre-printed MICR Draft forms by correspondents should use only those formats supplied by the correspondent banks. In respect of drafts on other correspondents, branches should use the draft forms of our bank.

11.5.Wherever branches are supplied with pre-printed draft forms by foreign correspondents, they should not use our banks draft forms, even if the stock of preprinted draft forms are exhausted. Branches are therefore advised to keep adequate stoc of pre-printed draft forms by indenting sufficient forms in advance.

11.6.The contents of the drafts should be verified with the application for remittance before being signed by two authorised officials of the branch with signature serial numbe being affixed thereon.

11.7.The draft should be handed over to the applicant against his acknowledgment on th reverse of the credit voucher or should be sent to the beneficiary, as per instructions of

the applicant.

11.8.To prevent fraudulent encashment, forgery, material alteration etc., it has been mutually agreed that branches issuing draft on our Nostro accounts shall issue a pre advice, for all the drafts. , to enable the correspondent to pay the draft. . Branches should collect Rs.100/- towards pre advice charges and credit to their P&L Account. This charge is to be collected apart from the draft issue charges. This should clearly be advised to the customer in advance to avoid complaints regarding charges. Branches should send the pre advice in MT110 without fail. Correspondents on whom the draft is issued may return the draft in the absence of the pre advice and such incidence o return of draft will adversely affect the reputation of Bank. This may also lead to custome complaint and claims before the consumer forum. Branches not provided with SWIFT should also ensure that MT110 is sent from the swift branches and the acknowledgement obtained for their record. It is also the responsibility of swift center to send MT110 received from the link branches immediately. Annexure I List of Banks maintaining Vostro Account with us:

Annexure II


A/c No. 240 525 510 266

FORMAT OF LETTER TO BE OBTAINED FROM THE CUSTOMER TENDERING FOREIGN CURRENCY INSTRUMENTS FOR COLLECTION Exchange Rate: I hereby wish to inform you that I am aware that the exchange rate applicable for conversion of foreign currency into Rupee for the foreign currency collection instruments will be the applicable rate on the date of conversion and this has no relevance to the exchange rate prevailing on the value date of credit. I give my full consent to this effect. Returns: I am also aware that in case the cheque is returned for the reason of forgery / to my account (for the rupee equivalent of the cheque amount together with all banks' charges) as and when it is returned. The exchange loss, if any, will be for my account.

fraudulent endorsements for which there is no time limit for return the same may be debite

Substitute Cheks: I understand that pursuant to the Check 21 Act (of USA) physical instruments may be substituted by images thereof (called Substitute checks). I hereby authorize you, at your discretion, to convert the instruments to Substitute Checks, and to transmit such Substitute Checks under International Cash Letter Services (ICLS) and / or collection items, as the case may be.

I understand that transmission of data by electronic means may not be entirely secure and risks of possible unauthorized alteration of data and / or unauthorized usage thereof for whatever purposes. access and / or misuse of the data by third persons and hereby further agree to hold you saved and harmless for any costs, losses, damages, expenses or other outgoings that you may incur due to any errors, delays, unauthorized access or use of data transmitted using electronic means. I hereby agree and confirm that you may destroy the instrument held by you after the Substitute Check has been created and I hereby acknowledge that I shall not hold IOB, in any way, responsible or liable for conversion of the instrument to a Substitute Check, other incidental or ancillary matter thereto. I also understand that consequent to creating cheque image (Substitute Check) and destruction of the original cheque, the Returned cheques will be in the form of image cheques only and not the original. of the cheque tendered for collection, instead of the original cheque submitted by me. Option 1. I hereby agree to the arrangement made by the Bank to send the instrument under Preferred Collection Service (PCS) for (USD 5001 and above) / International Cash I agree to bear the charges (USD 10 for instruments drawn on New York and USD 15 for other centers for PCS and charges as applicable for ICLS I am also aware that when the in case the instrument is returned the amount may be debited to my account inclusive of Bank and the correspondent charges. The exchange loss if any will be for my account. In of the cheque is known i.e. after a period of 3 to 4 weeks from the value date of credit or earlier depending on the type of cash letter service.

acknowledge and accept that any and all such transmissions by electronic means involve th

I agree to exempt you from any and all responsibility for unauthorize

transmission of the Substitute Check, destruction of the instrument upon conversion or any

I undertake to accept the check image in case of return

Letter Services (ICLS) (upto USD 5000), the services offered by the foreign correspondents

instruments are sent under Cash Letter the amount credited is under usual Reserve and tha

case immediate credit is not effected the same may be credited to my account after the fate

OR Option 2. The instrument may be sent for Normal Collection for final credit. I am aware of the fact that due to the nature of instrument it takes a longer period for realisation and additional charges involved. I agree to bear the additional charges and prepared for any delay in realisation of the instrument. Read, Understood & Accepted Signature of Depositor (To tick whichever applicable and strike whichever not applicable)

(Pre Advice limits since removed vide Treasury (Foreign) Perm. Cir No: 95 dated 03.08.2011)