Leisure Travellers Passports Exempted From Forex Endorsement

Travellers going abroad now need not have their passports endorsed for the foreign exchange taken by them. The Reserve Bank of India (RBI) has decided that authorised dealers (ADs) need not endorse on passport the foreign exchange released to persons travelling abroad as tourists.

Late last year, this facility was provided for businessmen and this has now been extended to the travellers. Market observers feel the RBI move is in keeping with the spirit of Foreign Exchange Management Act (FEMA) and liberalisation measures initiated by the regulator on the foreign exchange front.

The RBI had recently increased the limit of foreign exchange that a person can carry in notes and coins from $500 to $2000. The basic travel quota (BTQ) for the leisure traveller is at present $5,000, while for the business traveller it is $25,000 a trip. Travellers, therefore, can carry upto $2000 in notes with the remaining as travellers cheques.

However, in recent times there has been an increase of travellers using global credit cards. Passports, in this case, are endorsed on return of the traveller. The new rules could, however, lead to an increased use of these credit cards.

"There has been a surge in the use of global credit cards. The new rules, however, will cut down the bureaucratic procedure for credit card users as the passports need not be endorsed," said a banker.

Observers feel the new rule is one of the steps taken to ease the bureaucratic hurdles. Travellers will, nevertheless, have to fill up the mandatory forms while purchasing foreign currency. "Unless and until the BTQ level is changed, there will be no significant changes. The RBI and the Income Tax department will however maintain their checks on whether a person exceeds his quota for the year, though the passport is not endorsed," said an observer.

He pointed out that travellers having the Schengen Visa, issued by some of the European countries, still require the forex to be endorsed by the domestic ADs.