Firms get nod for granting forex loans to overseas staff

India Inc can now offer foreign currency loans to its employees working overseas freely without seeking the permission of the Reserve Bank of India (RBI).

Till now, any such loan granted by the Indian companies to the employees of their branches outside the country required RBI clearance since such loans have been treated as loans by a resident to a non-resident.

This notification is good for all those firms which have overseas ventures as they can now take care of their employees in a better way.

The RBI said Indian firms may grant loans in foreign currency to the staff of their branches outside India provided that the loan shall be granted for personal purposes in accordance with the lender's staff welfare scheme/loan rules and other terms and conditions as applicable to its staff resident in India and abroad.

The central bank has also raised the limit for exporting goods by way of gift to Rs 5 lakh per annum from Rs 1 lakh at present. This relaxation is in line with the government's liberalisation policy, said Rajeev Bhargav, senior trade services manager, HSBC Bank.