Diamond Dollar Account Quiz
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Questions and Answers

Who is eligible to open a Diamond Dollar Account?

  • Companies with an average annual turnover of Rs. 1 crore
  • Firms with a track record of at least 2 years and average annual turnover of Rs. 3 crores or above (correct)
  • Individuals with no previous track record
  • Firms with less than 2 years of operation

    • What is the maximum number of Diamond Dollar Accounts a firm can open?

  • Ten
  • Unlimited
  • Five (correct)
  • Three

    • What type of account is the Exchange Earners’ Foreign Currency (EEFC) Account?

  • Joint savings account
  • Time deposit account
  • Interest-bearing savings account
  • Non-interest bearing current account (correct)

    • Who can be included as a joint holder in an EEFC Account?

    <p>Resident close relatives</p> Signup and view all the answers

    What has been removed concerning the reporting of DDA accounts?

    <p>Submission of fortnightly and quarterly reports to RBI</p> Signup and view all the answers

    What is the regulatory framework for a resident individual to open an EEFC Account?

    <p>Regulation 4 (D) of Foreign Exchange Management</p> Signup and view all the answers

    What is a requirement for firms intending to open a Diamond Dollar Account?

    <p>A track record of import/export for at least 2 years</p> Signup and view all the answers

    What triggers eligibility for a firm to apply for a Diamond Dollar Account?

    <p>Annual turnover exceeding Rs. 3 crores</p> Signup and view all the answers

    What is the maximum percentage of foreign exchange earnings that can be credited to EEFC accounts?

    <p>100%</p> Signup and view all the answers

    What must be done with the accruals in the EEFC account during a calendar month?

    <p>They must be converted into Rupees by the end of the succeeding month.</p> Signup and view all the answers

    Which of the following is NOT an eligible credit to an EEFC account?

    <p>Foreign currency loans from outside India.</p> Signup and view all the answers

    Which facility is intended to enable exchange earners to save on transaction costs?

    <p>EEFC scheme.</p> Signup and view all the answers

    What is one of the main restrictions regarding credit facilities against EEFC account balances?

    <p>They are not allowed against EEFC balances.</p> Signup and view all the answers

    Who may AD Category – I banks permit to extend trade-related loans from their EEFC balances?

    <p>Exporter constituents.</p> Signup and view all the answers

    What type of payments are included as eligible credits for EEFC accounts from units in SEZ?

    <p>Payments for goods supplied to a unit in Domestic Tariff Area.</p> Signup and view all the answers

    Which of the following is a requirement for the EEFC facility regarding asset maintenance in foreign currency?

    <p>It restricts maintenance of foreign currency assets.</p> Signup and view all the answers

    What has been withdrawn regarding the inter-project transfer of machinery?

    <p>The stipulation regarding recovery of market value from the transferee project</p> Signup and view all the answers

    What limitation has been removed concerning the repatriation of funds for on-site software contracts?

    <p>The requirement to repatriate 30% of contract value</p> Signup and view all the answers

    What is the rating required for short-term investments made by exporters with temporary cash surpluses?

    <p>At least A-1/AAA by Standard &amp; Poor’s</p> Signup and view all the answers

    Where can exporters maintain foreign currency accounts?

    <p>In any currency or country of their choice</p> Signup and view all the answers

    What is required from the AD Category – I banks or Exim Bank before deploying temporary cash surpluses?

    <p>Monitoring by the AD Category – I banks or Exim Bank</p> Signup and view all the answers

    What approval is required for exporting machinery on lease?

    <p>Reserve Bank approval</p> Signup and view all the answers

    What purpose does the inter-project transfer of funds serve?

    <p>To allow for flexibility in fund management across projects</p> Signup and view all the answers

    What must software exporter firms do after completing their on-site contracts?

    <p>Repatriate the profits of on-site contracts</p> Signup and view all the answers

    What is the maximum value of goods that an exporter can gift at a trade fair/exhibition?

    <p>USD 5000</p> Signup and view all the answers

    What is the maximum percentage of average annual sales that can be remitted for setting up an overseas office?

    <p>15%</p> Signup and view all the answers

    What is required from the exporter after re-importing unsold items from abroad?

    <p>Bill of Entry</p> Signup and view all the answers

    What is one condition that an overseas branch must adhere to?

    <p>It should not invest surplus funds abroad without prior approval.</p> Signup and view all the answers

    Which bank category can approve EDF for display or display-cum-sale at trade fairs/exhibitions?

    <p>AD Category – I banks</p> Signup and view all the answers

    What is the limitation on remittances for recurring expenses for an overseas office?

    <p>10% of average annual sales.</p> Signup and view all the answers

    What happens if goods exported for testing are destroyed during the process?

    <p>A certificate from the testing agency is needed</p> Signup and view all the answers

    What must the details of overseas bank accounts opened by Indian entities be reported to?

    <p>The AD Bank.</p> Signup and view all the answers

    Can unsold exhibit items be sold outside the exhibition/trade fair?

    <p>Yes, in the same country or a third country</p> Signup and view all the answers

    What document is required for the re-export of unsold rough diamonds from the Special Notified Zone?

    <p>Packing list with notional value</p> Signup and view all the answers

    What is the condition for AD banks to allow remittance for acquiring immovable property outside India?

    <p>For business and residential purposes of staff.</p> Signup and view all the answers

    What type of diamonds is prohibited from entering the DTA?

    <p>Rough diamonds.</p> Signup and view all the answers

    What is a requirement for AD Category – I banks when handling transactions?

    <p>Transactions are subject to 100 percent audit</p> Signup and view all the answers

    How much of the contract value can an overseas office of a software exporter repatriate to India for each off-site contract?

    <p>100%</p> Signup and view all the answers

    What happens if items are exported for re-import after repairs?

    <p>A relative Bill of Entry is needed after re-import</p> Signup and view all the answers

    What is allowed after the AD bank is satisfied with the bona-fides of a transaction?

    <p>Import payments.</p> Signup and view all the answers

    Under the Foreign Trade Policy, what is required for a write-off of export proceeds?

    <p>Certificate from the Foreign Mission of India</p> Signup and view all the answers

    Which parties can engage in set-off of export receivables against import payables?

    <p>Exporter/importer constituents and their overseas buyers/suppliers</p> Signup and view all the answers

    Which of the following is NOT a condition for set-off of export receivables?

    <p>Confirmation of export volumes</p> Signup and view all the answers

    What type of companies can exporters use for set-off of export receivables?

    <p>Group or associate companies overseas</p> Signup and view all the answers

    Regarding the write-off for export realization, which of the following is true?

    <p>Reserve Bank or AD Category – I bank approval is necessary</p> Signup and view all the answers

    Which transactions cannot be included in the set-off arrangement?

    <p>Import of services against export of goods</p> Signup and view all the answers

    What should an AD Category – I bank ensure regarding the invoices for set-off?

    <p>They are not under investigation by authorities</p> Signup and view all the answers

    What is the implication of ECGC and private insurance claims settled in rupees?

    <p>They do not count towards export realization in foreign exchange</p> Signup and view all the answers

    Study Notes

    Master Direction - Export of Goods and Services

    • Export of goods and services from India is governed by Section 7 of the Foreign Exchange Management Act 1999 (42 of 1999), along with Notification No. G.S.R. 381(E) dated May 3, 2000.
    • The Foreign Exchange Management (Current Account Transactions) Rules, 2000 also apply.
    • These regulations are amended periodically to reflect changes in the regulatory framework.
    • Authorised Persons (APs) must follow directions issued by the Reserve Bank of India (RBI) under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA) 1999. This ensures compliance with regulations.
    • This Master Direction compiles instructions on exports of goods and services from India. Reporting instructions are detailed in Master Direction No. 18 (January 1, 2016).
    • RBI may issue additional directions to Authorised Persons via circulars, if necessary, to adapt to changes in regulations or transaction conduct.

    Index

    • Part A - General: Includes introduction, procedure for receipt & repatriation of proceeds from exports.
    • Part B - EDF/SOFTEX Procedure: Covers export of goods through Customs ports and procedures for EDI ports and post.
    • Part C - Obligations of Authorised Dealers: Includes grants of EDF waiver, issues related to the export of goods with specific identification numbers, and related procedures.
    • Part D - Remittances Connected with Export: Covers the procedures of agency commission, refund of export proceeds.

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    Related Documents

    RBI/FED/2015-16/11 Export of Goods and Services PDF

    Description

    Test your knowledge on the eligibility criteria and features of Diamond Dollar Accounts. This quiz covers who can open an account, the maximum number a firm can have, and the specifics of Exchange Earners’ Foreign Currency Accounts. Get ready to enhance your understanding of foreign currency accounts!

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