The Reserve Bank of India (RBI) on Friday raised the limit on the number of foreign remittances an individual can receive from 12 to 30 per calendar year. However, the cap on the amount of each transaction has been kept unchanged at $2,500 per person.
Market participants said the need for foreign funds to support the rupee would have triggered the move. “More remittances will certainly help in the current conditions when we need to attract more foreign fund inflows,” said a senior treasury official from a large public sector bank. The official added people would also wish to take advantage of the weak rupee levels.
The measure is expected to benefit people who have more than one source of receiving money from abroad. Also, senders who need to remit money more frequently are set to benefit. “A number of people using this facility are employed in blue-collar jobs and have a multiple pay calendar. In such cases, this relaxation will surely be of help,” said Kiran Shetty, managing director of Western Union in India.
This had been a long-standing demand from money transfer agents who had received such requests from customers.
According to experts, India is the largest receiver of remittances from other countries. A report released by the World Bank suggested remittances to India would be $64 billion in 2011, marginally higher than those to China. The World Bank had revised the estimates from $58 billion on the basis of the view that a weak rupee and robust economic activities in the Gulf countries would lead to a surge in remittances.