2.1 Opening of Foreign Currency Account:

The concerned branch of the AD may open non-interest bearing Foreign Currency Account for Project Offices in India subject to the following:

a) The Project Office has been established in India, with the general/ specific permission of Reserve Bank, having the requisite approval from the concerned Project Sanctioning Authority,

b) The contract under which the project has been sanctioned, specifically provides for payment in foreign currency,

c) Each Project has only one Foreign Currency Account.

d) The permissible debits and credits in the account shall be as under:

• Debits:

• Payment of project related expenditure.

• Credits:

• Foreign currency receipts from the Project Sanctioning Authority, and
• Remittances from parent/group company abroad or bilateral/multilateral international financing agency.

e) The responsibility of ensuring that only the approved debits and credits are allowed in the Foriegn Currency Account shall rest solely with the concerned branch of the AD. Further, the Accounts shall be subject to 100 percent scrutiny by the Concurrent Auditor of the respective AD banks.

f) The Foreign Currency account may be closed at the completion of the Project.

2.2 Intermittent remittances:

AD branch may permit intermittent remittances by Project Offices pending winding up / completion of the project provided they are satisfied with the bonafides of the transaction and subject to the following:

• The Project Office submits an Auditors' /Chartered Accountants’ Certificate to the effect that sufficient provisions have been made to meet the liabilities in India including Income-Tax etc.
• An undertaking from the Project Office that the remittance will not, in any way, affect the completion of the Project in India and that any shortfall of funds for meeting any liability in India will be met by inward remittance from abroad.

2.3 Reporting requirements:

The foreign company establishing a Project Office in India is to furnish a report through the concerned AD branch, to the concerned Regional Office of Reserve Bank of India under whose jurisdiction the Project Office is set up, incorporating the following details :

a. Name and address of the Foreign Company,

b. Reference Number and date of letter awarding the contract referred to in clause (ii) of Regulation 5 of Notification No. FEMA 22/2000-RB dated May 3, 2000,

c. Particulars of the authority awarding the projects/contract,

d. The total amount of contract,

e. Address /e-mail address,/telephone number/fax number of the Project Office,

f. Tenure of Project Office ,

g. Brief details of the Project undertaken,

h. AD branch with whom the account has been opened and the foreign currency in which the account is opened,

i. An undertaking to the effect that the Project Office is eligible to avail of the General Permission under Regulation 5(ii) to RBI Notification No 22 / 2000- RB dated 3rd May, 2000 read with Notification No. FEMA 95 dated July 2, 2003 showing the reason thereof.

This Report shall be forwarded through the AD branch to the concerned Regional Office of the Reserve Bank of India within 2 months of establishment of the Project Office.

2.4 The Project Office shall also submit to the AD branch on an annual basis, a Certificate from a Chartered Accountant showing the Project Status and certifying that the accounts of the Project Office has been audited and the activities undertaken are in conformity with the General/Specific permission given by the Reserve Bank.