FOREIGN EXCHANGE

In hotels Forex means foreign currency. This currency includes all coins, currency notes, bank drafts, travelers
cheque etc. of foreign countries. The Forex regulation act (FERA) 1973 provides the basis for exchange control
which operated by R.B.I. through banks, Travel Agencies, Hotels, etc. which are allowed to deal in FOREX. It
applies to whole of India as well as to all citizens of India residing in abroad (NRI) and branches or agencies
outside India but registered in India. Any bank or hotel or travel agents who like to deal in Forex has to obtain
license from the R.B.I. The licenses are of two categories:

1.
2.

Authorized dealer in Forex

Restricted Money Changer

Banks are issued the first category of license; they are the Authorized dealers in FOREX. They can buy and sell
the foreign currency at the current rate. Hotels are issued restricted money changer license (RLM). The hotels
which obtains this license can purchase Forex from customer and sell it to those who are authorized dealers in
Forex i.e. Banks. Such approved hotels are entitled to use certain percentage of Forex earned by them for the
purpose of their publicity abroad, promotion tours of their officer or agent abroad, for import of goods or
equipments. Subject to the approval of Department of Tourism (DOT) every money changer has a minimum limit
of dealing of foreign currency. If the dealing is less than this limit then its license is canceled.
The hotels which are license holder have to fulfill following conditions:

1.
2.

FOREX to be accepted from Foreign Customers on a/c of payment of their bills.

3.

The rate of purchase of foreign currency should be displayed near the cash counters where money
exchange business undergoes.

4.
5.
6.
7.

Foreign currency has to be sold to authorized dealers in forex i.e. banks (on next working day)

When the foreigners pay their bill in foreign currency the balance can be returned in Indian Currency. If
in case the guest requests the hotel that the balance can be returned to him in foreign currency then the
hotel may advise the guest that he can use Indian currency for meeting petty expenses like Taxi fare, or
buying something from the shop, etc and balance of Indian currency can be exchanged at the airport.

Foreign currency should be accepted not at the lower rate then the rates offered by the bank.
All purchase or sale of foreign currency will be at the risk of the hotel.
Monthly statement of foreign currency purchased from the guest and sold to the bank should be
submitted to R.B.I. not later then 10th of the following month in the prescribed Performa.

There is a legal restriction on the amount of foreign currency or traveler cheque that a tourist may bring into
India provided he makes a declaration in the currency declaration form given to him on arrival in India. This will
enable the foreigner not only to exchange the foreign currency brought in by him but also to take back the
unspent currency out of India on departure foreign guest are required to pay hotel bills in Forex, but some
foreign customers are exempted to pay in foreign currency. Therefore, guest can be divided into two categories:
1. EXEMPTED GUEST: following guest are exempted to pay there bills in forex, they can pay in Indian
currency
(a) Foreign nationals employed in India earning Indian Currency
(b) Diplomatic and official guest of diplomatic institutions and officers of United Nations and other international
organizations.
(c) Nationals of those countries with which India has Rupee agreement. You can pay or receive the money from
those countries. The names of these countries are Nepal, Bhutan etc.
(d) Employees of shipping company, Airline and the crew members
(e) Foreign nationals on a visit to India on the invitation of central Govt. or state Govt.
(f) Foreign students studying in India on govt. of India scholarship
(g) Foreign nationals on a visit to India on the invitation of any person resident in India.
(h) Foreign guest of exporters enjoying banking permit facility granted by R.B.I.
2. NON EXEMPTED GUEST : Other foreign guest who do not come under exempted category have to make
payment of the hotel bill in FOREX, payment made can be accepted from the foreign guest in one of the under
mentioned permitted currencies:

1.
2.
3.

Australian Dollar 10. Bahrain Dinar

Belgium Franc 11. Canadian Dollar
Danish Krone 12. German Mark

4.
5.
6.
7.
8.
9.

French Franc 13. Italian Lira

Japanese Yen 14. Kuwait Dinar
Malaysian Dollar 15. Singapore Dollar
U.K. Pound 16. U.S. Dollar
Saudi Riyal 17. U.A.E. Durham
Chinese Yuan 18. Bangladeshi Taka

It is necessary to make clear to foreign guest that the payment of apartment (accommodation) charge has to be
made in forex. If he takes meals in the restaurant of the hotel then he can make the payment either in foreign
currency or India Currency it is the responsibility of the hotel to make this point clear to the foreign guest
through registration form, welcome slip, tariff card etc. when a foreign guest makes a payment in forex the hotel
has to give ENCASHMENT CERTIFICATE to the guest whether he asks or not. This certificate should be serially
numbered and issued on the official letter head of the hotel by the holding restricted money changer license. A
duplicate copy of it should be kept within book form for production to R.B.I. as and when required.
The hotel has to maintain a summery book recording the Forex done within a day in the form of foreign currency
notes, travelers cheque and coins, known as RLM book.