Application Assignment 1 1. Please identify whether the following transactions will be classified as Current or Capital account. Transactions and state the reason: a) Monetary Authority of Singapore (MAS) is holding 2.3% of HDFC Ltd Shares. This transaction will be considered as: b) When you had gone to Munich on your company's assignment you are using your travel card issued by State Bank of India, Hyderabad branch for booking hotel accommodation. c) One of the foreigners who has come to India for Ayurveda treatment will be staying in India for 4 months. For his convenience he is opening a Rupee account with Federal Bank, Kochi with whatever foreign exchange he has brought into India Opening and maintaining of this Rupee account in India by this foreigner will be treated as: d) One of the leading pharma company is engaging one foreign consultant for getting approval for certain formulations under FDA approval. Consultancy fees will be around USD 1mn. Payment of this consultancy fees will be treated as e) Mitsubishi Tokyo and L & T Ltd is having a joint venture in India. After finalising the financial statement for the recent financial year, Mitsubishi Tokyo wants to transfer its dividend earned in this joint venture to its parent company in Tokyo. Transfer of dividend by this foreign investor from India to its country will be treated as: f) Cummins India has taken a project in Sri Lanka for construction of oil well for Ceylon Petroleum Corporation, Colombo. For this purpose, Cummins India has opened USD account with State Bank of India, Colombo branch. This transaction will be classified as: n to Commercial Bank g) Exim Bank India has sanctioned a line of credit loan of Ethiopia for a project. This transaction will be classified as: h) Balance of Trade figure released by Reserve Bank of India represents the difference between: i) An Indian exporter has to bring back export payment to India within........ months from date of shipment. j) India can allow INR to become fully convertible if the foreign exchange reserve should be equivalent to a minimum of months import payments. (one of the conditions). Application Assignment 1 1. Please identify whether the following transactions will be classified as Current or Capital account. Transactions and state the reason: a) Monetary Authority of Singapore (MAS) is holding 2.3% of HDFC Ltd Shares. This transaction will be considered as: b) When you had gone to Munich on your company's assignment you are using your travel card issued by State Bank of India, Hyderabad branch for booking hotel accommodation. c) One of the foreigners who has come to India for Ayurveda treatment will be staying in India for 4 months. For his convenience he is opening a Rupee account with Federal Bank, Kochi with whatever foreign exchange he has brought into India Opening and maintaining of this Rupee account in India by this foreigner will be treated as: d) One of the leading pharma company is engaging one foreign consultant for getting approval for certain formulations under FDA approval. Consultancy fees will be around USD 1mn. Payment of this consultancy fees will be treated as e) Mitsubishi Tokyo and L & T Ltd is having a joint venture in India. After finalising the financial statement for the recent financial year, Mitsubishi Tokyo wants to transfer its dividend earned in this joint venture to its parent company in Tokyo. Transfer of dividend by this foreign investor from India to its country will be treated as: f) Cummins India has taken a project in Sri Lanka for construction of oil well for Ceylon Petroleum Corporation, Colombo. For this purpose, Cummins India has opened USD account with State Bank of India, Colombo branch. This transaction will be classified as: n to Commercial Bank g) Exim Bank India has sanctioned a line of credit loan of Ethiopia for a project. This transaction will be classified as: h) Balance of Trade figure released by Reserve Bank of India represents the difference between: i) An Indian exporter has to bring back export payment to India within........ months from date of shipment. j) India can allow INR to become fully convertible if the foreign exchange reserve should be equivalent to a minimum of months import payments. (one of the conditions)
