# Schedule I — Prohibited Current Account Transactions
Schedule I lists transactions that are absolutely prohibited — they cannot be drawn from foreign exchange at all, not even with RBI/CG approval.
## The eight prohibited heads
| # | Transaction | Rationale |
|---|---|---|
| 1 | Remittance out of lottery winnings | Discourages gambling outflows |
| 2 | Remittance out of racing/riding income or any other hobby (e.g. camel race) | Same |
| 3 | Remittance for purchase of lottery tickets, football pools, sweepstakes, banned/prescribed magazines | Bars outward gambling spends |
| 4 | Payment of dividend by a company where dividend balancing applies | Dividend outflow capped at forex inflows earned |
| 5 | Payment of commission on exports towards equity investment in JV/WOS abroad | Anti-round-tripping |
| 6 | Payment of commission on exports under Rupee State Credit Route (except tea & tobacco up to 10% of invoice value) | No real forex receipt |
| 7 | Payment under Call-Back Services of telephones | Bypasses Indian telecom |
| 8 | Remittance of interest on NRSR (Non-Resident Special Rupee) Account | Policy bar |
## Notes on key heads
### Dividend balancing (#4)
Dividend payable to foreign partners is limited to foreign exchange earnings of the Indian company. The prohibition kicks in only where dividend balancing is required.
> Clarification: In the absence of any information that dividend balancing applies, dividend can be paid freely.
### Rupee State Credit Route (#6)
Under this route, India supplies goods (e.g. grains to Russia); Russia reduces its INR debt; the Indian Government pays the Indian farmer in INR. No forex actually comes in. So paying commission in forex is prohibited.
> Exception: Tea and tobacco exports — commission allowed up to 10% of invoice value.
### Call-back services (#7)
International call-back arrangements that bypass licensed telecom operators — outward forex payment is prohibited.
## Memory hook
"Lotteries, Hobbies, Bans, Balancing, Round-tripping, Rupee-Credit, Call-back, NRSR" — eight items.