Forex Remittance Limits Jacked Up

Another step towards current account liberalisation

Buoyed by the strong build-up in foreign exchange reserves, the Reserve Bank of India (RBI) today took yet another step on the road to current account liberalisation.

It raised the limits for remittance of foreign exchange by 3-20 times for various purposes, ranging from education to employment abroad.

The limits on remittance of foreign exchange have been raised by 20 times, from $5,000 to $100,000 for those going overseas for employment, for those emigrating and for the maintenance of close relatives abroad. For those who are studying overseas, the limit has been raised from $30,000 to $100,000.

 

For medical treatment abroad, the foreign exchange remittance limit has been doubled to $100,000. The limit on remittances for consultancy services procured from outside India has been raised to $1 million per project, from $ 100,000.

Banks may allow remittances for amounts up to the new limits for each category without insisting on supporting documents but on the basis of a self-declaration incorporating the basic details of the transaction and the submission of an application.

The RBI said banks could henceforth release foreign exchange up to $100,000 or its equivalent to resident Indians for medical treatment abroad, without insisting on any estimate from a hospital or doctor in India or abroad.

Hitherto, foreign exchange up to $50,000 could be released for medical treatment abroad, without insisting on any estimate from a hospital or doctor.

Banks should allow up to $1 million to be remitted for consultancy services procured from outside India subject to the applicant submitting documents to their satisfaction, it said.

The market feels that the relaxation is because of India's comfortable foreign exchange reserves of $82.774 billion. In the current financial year, some $7 billion have been added to the reserves.