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The Reserve Bank of India (RBI) clarified on Monday that a foreign investor is free to remit funds through any bank of its choice for any transactions permitted under Foreign Exchange Management Act (FEMA).
The funds thus remitted can be transferred to the designated bank through the banking channel.
“Note should, however, be taken that Know Your Customer (KYC) in respect of the remitter, wherever required, is a joint responsibility of the bank that has received the remittance as well as the bank that ultimately receives the proceeds of the remittance,” said RBI.
The clarification was put up because RBI has been receiving references from market participants as to whether, along similar lines, it is possible for Foreign Institutional Investors (FIIs) and other foreign investors to effect remittances on cash /tom /spot basis to a bank other than the designated custodian bank.
