Can Mr. Pandya, a resident of Canada, instruct his brother staying in Mumbai to make a payment of Rs.5,000 to Mr. Joshi, his close friend?
No, as such payment is not permitted under clause (b) of section 3 of the Act.
Clause (c) prohibits every person for receiving any payment from or on behalf of a person resident outside India without an Inward remittance from a place outside India through an authorized person.
Clause (d) prohibits a person to enter into any financial transaction in India as consideration for acquisition, creation or transfer of a right to acquire any asset outside India by any person. The clause would affect a transaction in the nature of “Hawala Transaction”.
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