International Banking

INTERNATIONAL BANKING

 

Introduction
VIJAYA BANK is authorised to deal in foreign exchange by Reserve Bank of India since 1971 and is classified as Authorised Dealer – Category I bank. We handle all types of foreign exchange business such as exports, imports , remittances , non-resident accounts , letters of credit , bank guarantees etc., For this purpose, we have designated select branches in major centers as B – Category branches who are authorised to handle all types of forex business, duly supported by state-of-the-art Integrated Treasury located at Head Office, Bangalore who supplements the efforts of our branches in handling forex business by offering finest and on-going exchange rates. All our B – Category branches are fully equipped with trained manpower and required infrastructure such as internet, ISD/STD/Fax facilities, SWIFT network etc., to handle any type of forex business.
 
Currencies dealt
At present, our Bank is dealing in 9 major international currencies namely: -
 
1.   U. S. Dollar (USD)
2.   Pounds Sterling (GBP)
3.   Euro (EUR)
4.   Japanese Yen (JPY)
5.   Canadian Dollar (CAD)
6.   Australian Dollar (AUD)
7.   Singapore Dollar (SGD)
8.   Swiss Francs (CHF)
9.   UAE Dirhams (AED)
 
Though we deal in above mentioned major currencies directly through our Nostro accounts , our branches can also handle forex business denominated other convertible currencies as well, by converting the amount to any of the above mentioned currencies through cross currency rates.
 
Correspondent Banks network
 
With a view to facilitate smooth handling of forex business and extend satisfactory service to our customers, we have entered into correspondent banking relationship with over 300 major international banks all over the world.
 
Facilities for Exporters
 
Advising and confirming Export Letters of Credit
 
      We advise Export Letters of Credit received from our Correspondent Banks abroad through SWIFT, by our B – Category branches , in favour of exporters located anywhere in India. Subject to prior arrangement with the LC issuing bank, we also add confirmation to the Export Letter of Credit received from our Correspondent Banks. We also undertake to transfer the Letter of Credit in favour of second beneficiary if the LC has been opened on ‘Transferable’ basis.
 
Export Bill Collection
 
      Our B – Category branches handle export bills drawn in any foreign currency on collection basis through network of our Correspondent Banks abroad. In case of bills drawn in a currency other than the currency in which our Bank is dealing at present, we will get the bill proceeds converted to any of the currencies dealt by us and realise through corresponding Nostro accounts with our Correspondent Banks abroad.
 
Financing of Exports
 
Rupee Export Credit
 
Pre-shipment Credit
 
Our Bank extends pre-shipment Rupee Export Credit to the eligible exporter customers as per the prevailing FEMA and RBI regulations and subject to lending norms of the Bank, for the purpose of procuring the raw materials required for manufacturing ultimate product meant for export (manufacturer exporter) or for procuring finished products for export (merchant exporter). The pre-shipment credit facility is extended on the basis of the confirmed Firm Orders or Export Letter of Credit opened in favour of the exporter. The pre-shipment export credit is extended with attractive rate of interest which is linked to the Bank’s Base Rate (BR). The facility is extended on ‘ Running Account’ basis also to eligible exporters with satisfactory past track record.
 
Post-shipment Credit
 
Once the export takes place, our B – Category branches also extends post-shipment Rupee Export Credit to the eligible exporters by purchasing/ discounting/negotiating export bills, as per the prevailing FEMA and RBI regulations and subject to lending norms of the Bank. The proceeds of the export bills will be utilised for liquidating the Pre-shipment credit. The post-shipment credit facility is also extended at attractive rate of interest which is linked to the Bank’s Base Rate (BR).
 
 
Foreign Currency Export Credit
 
Pre-shipment Credit in Foreign Currency (PCFC)
 
Our B – Category branches extend PCFC in three major currencies, namely USD, GBP and EUR to eligible exporters as per the prevailing FEMA and RBI regulations and subject to lending norms of the Bank for the purpose of procuring the raw materials required for manufacturing ultimate product meant for export (manufacturer exporter) or for procuring finished products for export (merchant exporter). The PCFC facility is extended on the basis of the confirmed Firm Orders or Export Letter of Credit opened in favour of the exporter with attractive rate of interest which is linked to the LIBOR rates of the currency concerned. The facility is also extended on ‘Running Account’ basis to eligible exporters with satisfactory past track record.
 
Post-shipment Credit in Foreign Currency (PSCFC)
 
Our B – Category branches also extends Post-shipment Credit in Foreign Currency in USD, GBP and EUR to the eligible exporters in the form of export bills purchasing/discounting/negotiating facility, as per the prevailing FEMA and RBI regulations and subject to lending norms of the Bank. The proceeds of the export bills will be utilised for liquidating the PCFC extended by the Bank. The PSCFC facility is also extended at attractive rate of interest which is linked to the LIBOR rate of the currency concerned.
 
Non-Fund based facilities
 
Guarantees
 
In order to facilitate exporters to participate in international tenders involving export of goods & services, our Bank provides the facility of issuing bank guarantees in the form of Bid Bond Guarantee, Performance Guarantee, Retention Money Guarantee, Advance Payment Guarantee etc., The facility is extended to eligible exporters by our B – Category branches subject to lending norms of the Bank and the prevailing FEMA/RBI regulations.
 
Import/Inland Letters of Credit
 
We also extend the facility of opening Import/Inland Letters of Credit on account of exporters for importing/locally procuring the required raw materials/finished products for the purpose of ultimate export, subject to lending norms of the Bank and extant FEMA/RBI/DGFT regulations, as applicable. The import LCs are opened by our B – Category branches through SWIFT and advised by our Correspondent Banks abroad.
 
Forward Contracts
 
We extend the facility of booking forward contracts to our exporter customers based on their underlying exposure or on ‘Past Performance Basis’ against their declaration and undertaking. Our Bank is having state-of-the-art Integrated Treasury located in Head Office, Bangalore, which is fully equipped with necessary tools and skill set to provide best exchange rates to our exporter customers based on the on-going market rates. The contract can be offered upto 1 year forward based on the customer’s requirements.
 
Other facilities available to exporters
 
Exchange Earners’ Foreign Currency (EEFC) account
 
EEFC account can be opened by the exporter customer in major currencies, namely USD, GBP and EUR to park their export receipts in foreign currency without converting to INR. The facility is available with all our B – Category branches . It will enable the exporter to meet his payment obligations in foreign currency (such as ECB repayment, repayment of FCNR (B) loan, payment for import bills etc.,) without going through conversion process and thereby avoiding exchange loss arising on account of such conversions. The EEFC account is presently opened as a non-interest bearing current account as per the extant guidelines of RBI. The balance available in the EEFC account can be utilised by the exporter for remittance towards any permitted current account or capital account transactions as per FEMA regulations.
 
Net Banking facility
 
Net banking facility, called V-Net Banking, is available to all our exporter customers. The facility will enable the exporter customers to view all their accounts through internet. Our customer can also make payment towards various utilities, taxes etc., in addition to transferring of funds from their operative accounts through RTGS/NEFT.
 
Pay-Roll Account facility
 
Pay-Roll account facility is also available to our customers which will enable them to effectively manage their burden of disbursing salary to their employees every month. The customer who has availed V-Net Banking facility can upload the salary data directly into our system and transfer the salary to the account of the employee, from the comfort of their home/office.
 
Vijaya Global Debit cum ATM Card facility
 
All our exporter customers can avail Vijaya Global Debit-cum-ATM Card’ facility subject to the Bank’s rules framed in this behalf.
 
Advisory/counseling facility
 
Advising/counseling facility is available to all our exporter customers on matters relating to foreign exchange in general and facilities available for exporters in particular. The customer may contact International Banking Division, Head Office, or the nearest B – Category branches for any clarification in this regard.
 
Facilities for Importers
 
We undertake collection of import bills drawn in foreign currency on our importer customers and sent to us for collection by our Correspondent Banks abroad, subject to compliance with the extant FEMA/RBI/DGFT regulations in this behalf. In case of bills drawn in a currency other than the currency in which our Bank is dealing at present, we will get the bill proceeds converted to any of the foreign currencies dealt by us and remit the proceeds to our Correspondent Bank concerned.
 
Import Letters of Credit
 
Import Letters of Credit facility is extended to importer customers for importing raw materials/semi-finished/finished goods, including capital goods, into India. The facility is extended subject to extant FEMA/RBI/DGFT regulations and Bank’s lending policy in force. The LCs can be established on DP (sight) or DA (usance) basis, as per the terms agreed between the parties concerned. The LCs will be communicated through SWIFT network to ensure faster and secure transmission to the beneficiary. Arrangements are in place with select Correspondent Banks to add confirmation to the LC in case of need.
 
Buyers’ Credit
 
We arrange Buyers’ Credit against import of goods into India from our select Correspondent Banks as per the extant guidelines of RBI in force and subject to lending policy of the Bank. We also issue Letter of Comfort (LoC)/Letter of Undertaking (LoU) against the Buyers’ Credit arranged by our importer customers with overseas lenders. The facility can be extended for import of both capital and non-capital goods with end-to-end credit period being within 3 years and 1 year respectively. The all-in-cost rate of interest is linked to LIBOR rates of the currency concerned and is subject to the cap stipulated by RBI.
 
Guarantees & Stand-by LCs
 
We extend the facility for issuing Bank Guarantees and/or Stand-by Letters of Credit covering import of goods into India. The facility is subject to the FEMA/RBI/DGFT regulations in force and subject to the lending policy of the Bank.
 
Forward Contracts
 
In order to protect from the risk of exchange rate fluctuation, we extend the facility of booking forward contracts to our importer customers based on their underlying exposure or on ‘Past Performance Basis’ against their declaration and undertaking. Our Bank is having state-of-the-art Integrated Treasury located in Head Office, Bangalore, which is fully equipped with necessary tools and skill set to provide best exchange rates to our exporter customers based on the on-going market rates. The contract can be offered upto 1 year forward based on the customer’s requirements.
 
Other facilities available to importers
 
Net Banking facility
 
Net banking facility, called V-Net Banking, is available to all our importer customers. The facility will enable the customers to view all their accounts through internet. Our customer can also make payment towards various utilities, taxes etc., in addition to transferring of funds from their operative accounts through RTGS/NEFT.
 
Pay-Roll Account facility
 
Pay-Roll account facility is also available to our customers which will enable them to effectively manage their burden of disbursing salary to their employees every month. The customer who has availed V-Net Banking facility can upload the salary data directly into our system and transfer the salary to the account of the employee, from the comfort of their home/office.
 
Vijaya Global Debit cum ATM Card facility
 
All our exporter customers can avail ‘Vijaya Global Debit-cum-ATM Card’ facility subject to the Bank’s rules framed in this behalf.
 
Advisory/counseling facility
 
Advising/counseling facility is available to all our importer customers on matters relating to foreign exchange in general and facilities available for importers in particular. The customer may contact International Banking Division, Head Office, or the nearest B – Category branches for any clarification in this regard.
 
Vijaya Forex Resident Loan
Corporate customers can now avail foreign currency denominated term loans, known as ‘ Vijaya Forex Resident Loan (VFRL)’ in any of the major currencies, namely USD, GBP or EUR. The loan is extended for a period from 3 months to 10 years depending on the customer’s requirement with flexible repayment terms. The rate of interest on VFRL is linked to LIBOR rate of the currency concerned. The loan will benefit those corporate customers who are having earnings in foreign exchange, and are looking for cheaper funds for their expansion program. The VFRL is extended subject to fulfillment of the Bank’s lending policy criteria. The facility can be availed from any of our B – Category branches.
  
Remittance facilities for Residents
 

Travel abroad on private visit

For private visits abroad, other than to Nepal and Bhutan, any resident individual can obtain foreign exchange up to an aggregate amount of USD 2,50,000,  in any one financial year, irrespective of the number of visits undertaken during the year. The foreign currency, for this purpose, can be drawn maximum of 60 days in advance of the journey date. The customers who wish to draw foreign exchange is required to submit the following documents, in duplicate, to the branch where he/she is having their account: -

  

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of the passport.

4.        Copy of the travel ticket.

5.        Copy of PAN [for transactions exceeding USD.25000]

 

 

           Travel abroad for business purpose  

Visits by individuals in connection with attending of an international conference, seminar, specialised training, apprentice training, etc., are treated as business visits. For business trips to foreign countries, resident individuals can avail of foreign exchange up to USD 2,50,000  in a FY irrespective of the number of visits undertaken during the year.

However, if an employee is being deputed by an entity for any of the above and the expenses are borne by the latter, such expenses shall be treated as residual current account transactions outside LRS and may be permitted by the AD without any limit, subject to verifying the bonafides of the transaction.

The foreign exchange can be drawn maximum of 60 days in advance of the journey date. The customers who wish to draw foreign exchange is required to submit the following documents, in duplicate, to the branch where he/she is having their account: -

  

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of the passport.

4.        Copy of the travel ticket.

5.        Copy of PAN [for transactions exceeding USD.25000]

 

 

           Medical treatment abroad

With a view to enable resident individuals to avail of foreign exchange for medical treatment abroad without any hassles and any loss of time, Applicants  may draw foreign exchange up to an amount of USD 2,50,000 or its equivalent, on the basis of self-declaration in Form A2 and ‘Application cum declaration for purchase of foreign exchange under LRS of USD 250,000’ without insisting on any estimate from a hospital/doctor.

For amount exceeding the above limit, estimate from the doctor in India or hospital/ doctor abroad, is required to be submitted to the Authorised Dealers.

A person who has fallen sick after proceeding abroad may also be released foreign exchange by an Authorised Dealer for medical treatment outside India.

In addition to the above, an amount up to USD 250,000 per financial year is allowed to a person for accompanying as attendant to a patient going abroad for medical treatment/check-up.

The foreign exchange can be drawn maximum of 60 days in advance of the journey date. The customers who wish to draw foreign exchange is required to submit the following documents, in duplicate, to the branch where he/she is having their account: -

  

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of the passport.

4.        Copy of the travel ticket.

5.        Copy of PAN [for transactions exceeding USD.25000]

 

 

           Facilities available to students for pursuing their studies abroad.

 

Applicants can draw  foreign exchange up to USD 2,50,000 or its equivalent for studies abroad on self-declaration basis in Form A2 and ‘Application cum declaration for purchase of foreign exchange under LRS of USD 250,000’, without any estimate from the foreign University. However, remittances exceeding USD 250,000 may be requested, based on the estimate received from the institution abroad.

 

Students going abroad for studies are treated as Non-Resident Indians (NRIs) and are eligible for all the facilities available to NRIs under FEMA, 1999. Educational and other loans availed of by students as residents in India can be allowed to continue. A student holding NRO account may withdraw and repatriate up to USD 1 million per financial year from his NRO account. USD 3000 or its equivalent may be carried by the student in the form of foreign currency (which shall be within the overall limit of USD 2,50,000 or the estimate received from the institution abroad) while going for study abroad.

 

The amount can be drawn towards tuition fee, maintenance expense, boarding and lodging, settling-in expenses, books, study materials, computers etc., The amount can be drawn in the form of TT, draft, Travellers’ Cheques and/or currency notes (subject to country specific ceiling on currency note component as per RBI directions). In case of first drawal (i.e., before proceeding abroad) the foreign exchange can be drawn maximum of 60 days in advance of the journey date. The customers who wish to draw foreign exchange is required to submit the following documents, in duplicate, to the branch where he/she is maintaining account: -

 

 

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of the passport.

4.        Copy of the travel ticket.

5.        Copy of PAN [for transactions exceeding USD.25000]

6.        Copy of the Letter of Admission issued by the overseas institution.

7.        Application in Form TRS*

8.        Form A-2*

9.        Copy of the estimate given by the overseas institution. *

           [*for transactions  beyond USD.250000]

 

 

           Employment Abroad

 

A person going abroad for employment can draw foreign exchange up to USD 2,50,000 per financial year on the basis of self-declaration in Form A2 and ‘Application cum declaration for purchase of foreign exchange under LRS of USD 250,000’. If an individual remits any amount under the Liberalised Remittance Scheme in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 by the amount so remitted.

The foreign exchange can be drawn maximum of 60 days in advance of the journey date. The customers who wish to draw foreign exchange is required to submit the following documents, in duplicate, to the branch where he/she is having their account: -

   

 

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of the passport.

4.        Copy of the travel ticket.

5.        Copy of the employment letter.

6.        Copy of PAN [for transactions exceeding USD.25000]

 

 

 

          Gift/donation

 

Any resident individual/entity (trust; company; partnership firm, etc.), may remit up-to USD 2,50,000 in one financial year as gift to a person residing outside India or as donation to an organization outside India. Remittances exceeding the limit of USD 2,50,000 will require prior permission from the Reserve Bank. If an individual remits any amount under the Liberalised Remittance Scheme in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 by the amount so remitted. Customers who wish to make remittances, should submit the following documents to the branch where they are having the account: -

 

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of PAN [for transactions exceeding USD.25000]

 

 

 

           Emigration

 

A person going abroad on emigration can draw foreign exchange up to the amount prescribed by the country of emigration or USD 250,000. This amount is only to meet the incidental expenses in the country of emigration. Further, this remittance is not for undertaking any capital account transactions such as overseas investment in government bonds; land; commercial enterprise; etc. No amount of foreign exchange can be remitted outside India to become eligible or for earning points or credits for immigration.

 

The foreign exchange can be drawn maximum of 60 days in advance of the journey date. The customers who wish to draw foreign exchange is required to submit the following documents, in duplicate, to the branch where he/she is having their account: -

 

1.         Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of the passport.

4.        Copy of the travel ticket.

5.        Copy of the emigration letter.

6.        Copy of PAN [for transactions exceeding USD.25000]

7.        Declaration cum Undertaking in Form 15-CB duly supported by Chartered Accountant’s certificate in Form 15-CA, u/s 195 of the Income Tax Act, where the remittance is to be made in favour of non-resident beneficiary.

 

 

           Maintenance of close relative abroad

 

A resident individual can remit up-to USD 250,000 per financial year towards maintenance of close relatives [‘relative’ as defined in Section 6 of the Indian Companies Act, 1956] abroad.  If an individual remits any amount under the Liberalised Remittance Scheme in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 by the amount so remitted.

 

The customers who wish to draw foreign exchange for this purpose is required to submit the following documents, in duplicate, to the branch where he/she is having their account: -

    

1.       Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of PAN [for transactions exceeding USD.25000]

 

 

            Liberalised Remittance Scheme (LRS)

 

Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 250,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.

 

Customers, who wish to make remittances under the LRS should submit the following documents to the branch where they are having the account :

 

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of PAN [for remittances  exceeding USD.25000 and for all capital account transactions]

 
Liberalised Remittance Scheme (LRS)
 

Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 250,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.

 

Customers, who wish to make remittances under the LRS should submit the following documents to the branch where they are having the account :

 

1.        Application cum declaration for purchase of foreign exchange under LRS of USD 250,000 [Form A-2]

2.        Form – 2 (Declaration u/s 10 [5] of FEMA)

3.        Copy of PAN [for remittances  exceeding USD.25000 and for all capital account transactions]

Capital Account Transactions
 
Remittances in foreign exchange on account of Capital Account transactions are subject to the provisions contained in various Notifications issued by RBI in terms of Section 6 (1) of FEMA. All transactions undertaken by a resident which alter his / her assets or liabilities, including contingent liabilities, outside India are Capital Account transactions. Customers who wish to make remittances under the LRS should submit the following documents to the branch where they are having the account: -
 
1.        Form A-2 .
3.        Declaration cum Undertaking in Form 15-CB duly supported by Chartered Accountant’s certificate in Form 15-CA, u/s 195 of the Income Tax Act, where the remittance is to be made in favour of non-resident beneficiary.
4.        Copies of the documents in support of the underlying transaction to the satisfaction of the Bank.
5.        Copies of any other documents that may be prescribed under relevant FEMA Notifications/Regulations issued by RBI.
 
 
 Click here for List of designated branches
 
Contact us
For any clarifications regarding forex transactions our customers may contact the nearest B – Category branch or contact us at the following address: -
 
VIJAYA BANK
International Banking Division
Head Office
41/2, M. G. Road
Bangalore – 560 001
 
Tel: +91-80-2558 4066
Fax: +91-80-2558 4142
 Email: ibd@vijayabank.co.in

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