Important RMA Circular is Offline Only

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The rupee crunch is the current topic du jour in the Kingdom. It affects citizens, FDIs, and both resident and non-resident foreigners. When searching for "rupee crunch bhutan" on Google News, it seems that only the local media is covering this issue. The foreign media has not picked up the story (yet).

In today's Kuensel, RMA has published a large notification regarding new rules pertaining to bank accounts and foreign currency (which includes Indian rupees). I expected RMA's website, which otherwise has plently of information, including announcements, daily rates, annual reports, and tenders, to contain the same important notification. However, I could not find that information online.

Thus, as a service to our readers who have not seen today's paper, we are duplicating the information here.

PUBLIC NOTIFICATION

ROYAL MONETARY AUTHORITY OF BHUTAN

RMA/FED/CIRCULAR/2011-12/3227

CIRCULAR ON FOREIGN CURRENCY

1. Indian Rupee is a Foreign Currency
2. Access to Indian Rupee
   i) Cash from the Commercial Banks
   Release of Indian Rupees (INR) in cash to Bhutanese nationals by commercial banks shall be limited to INR 10,000 (ten Thousand) per day with a maximum monthly limit of INR 50,000 (fifty thousand) per person on production of citizenship identity card;
   OR
   ii) Credit card/debit card and pre-paid card transactions. The INR withdrawal shall be permitted up to 10,000 (ten Thousand) per instance subject to a maximum limit of INR 50,000 (fifty thousand) per month.
3. Non-resident Foreigners’ Accounts
   i) Banks shall not open any deposit accounts in the name of nonresident foreigners from 9th March 2012.
   ii) All existing deposit accounts shall be closed by 15th March, 2012 under the following conditions.
       a) All accounts closed on or before 9th March, 2012 may be paid in INR/BTN.
       b) Term deposit accounts which mature after 9th March, 2012 has the option to pre mature by 9th March, 2012 or continue till maturity with no further renewals. For those term deposits opting for the premature, payments may be paid in INR/BTN. However, for those term deposits opting for full maturity shall be paid only in BTN.
4. Bank Accounts held by Resident Foreigners
   The following resident foreigners shall be eligible to hold Ngultrum Accounts in banks in Bhutan:
   i) Holding valid Bhutanese business licence
   ii) Holding valid Bhutanese work permits.
   The permissible INR limit shall be the same as under Sl. No. (2). However, in case of account closure, the balance amount shall be repatriated only through the banking channel. These accounts shall be closed upon the expiry of the permit and must be informed by the employer to the Bank.
5. Resident Foreigners without bank accountsResident foreigners holding valid Bhutanese work permits but without a bank account shall be permitted to remit/pay INR subject to validation from their concerned Employers.
6. The following INR denominated transaction shall be permitted subject to submission of documentary evidence (including but not limited to Proforma invoice/ invoice tax receipts etc.) until further notice.i) Payments related to government and public sector corporations.
   ii) Payments for import of capital goods, spares, raw materials and other inputs for industries (manufacturing and services). Goods to be received within 91 days after the date of payment and invoice to be verified by the Banks in collaboration with the Custom Authority.
   iii) Payments for import of oil and fuel products.
   iv) Payments for medical supplies and equipment.
   v) Payment for the import of construction materials for approved housing constructions (by the Dzongkhag Authorities and Municipalities) as on 8th March, 2012, by individuals/business entities.
   vi) Payments for the import of goods excluding transport/vehicle goods (except for public transport buses) by individuals/business entities etc.
   vii) Payments for education/training and medical treatment expensese in India.
7. All export proceeds must be brought in by the exporters through the banking channel within 91 days from the date of export. The Custom Authority, the Commercial Banks and the RMA shall jointly review and monitor through exchange of information. In the event the export proceeds are not received within the above time frame the authorities will jointly investigate and take necessary action accordingly.

All financial institutions are hereby directed to strictly implement and

abide by the above provisions. Non-compliance or misuse of any of

the provisions shall result in suspension of the facility or imposition of

appropriate penalties. This circular will supersede all earlier circulars

related to INR.

Governor