Section 3: License to be Obtained to Carry on Foreign Exchange Transaction

1) A person, firm, company or body that intends to carry on the foreign exchange transaction shall obtain a license from the Bank.

2) A person, firm, company or body who intends to carry on the foreign exchange transaction shall make an application, accompanied by the details specified by the Bank, to the Bank to obtain the license.

3) If an application is made pursuant to sub-section (1), the Bank shall make necessary inquiry into the matter on the basis of the specified criteria and may, if it is considered appropriate, issue the license to the concerned person, firm, company or body to carry on the foreign exchange transaction. In issuing the license, the Bank may also specify the type and amount of foreign exchange to be transacted, the period for carrying out the transaction, and other necessary terms.

4) The Bank may, from time to time, give necessary orders or directives to the licensee in relation to the regularisation and management of the foreign exchange transactions. It shall be the duty of the licensee to abide by such an order or directive.

5) The licensee bank shall pay to the Bank such annual fees and deposits as may be prescribed by the Bank. The Bank may cancel or suspend the license of the licensee who fails to pay the annual fees and deposits so prescribed.

6) If any person, firm, company or body applies for a provisional (Patake) license to carry on the foreign exchange transaction, the Bank may issue the provisional license to such a person, subject to this Section.