Overseas remittance limits for individuals doubled to $50,000

MONETARY POLICY MID-TERM REVIEW 2006-07/ CONVERTIBILITY ROADMAP

The limit will include gifts, donations and investment by resident individuals in overseas companies.

Keeping with the spirit of the fuller capital account convertibility report, the Reserve Bank of India today in its mid-term review announced a slew of measures to liberalise overseas investment by individuals.

The limit for overseas remittance by resident individuals has been doubled from $25,000 at present to $50,000 per financial year. The amount could be used either for current or capital account transactions or for a combination of both.

The limit will include gifts, donations and investment by resident individuals in overseas companies. Moreover, the existing facility for private travel up to $10,000 per financial year will continue to be available on self declaration basis.

On the other hand, the RBI has removed the lock-in period for remittance of sale proceeds of immovable property in India by non-resident Indians (NRIs) and persons of Indian origins (PIO). However, the lock-in is eliminated provided the amount being remitted does not exceed $1 million in any financial year.

Under the existing guidelines, NRIs and PIOs are permitted to remit up to $1 million per calendar year for any bonafide purpose out of the balances in their non-resident ordinary (NRO) accounts.

Meanwhile, the group on cost of NRI remittance has proposed to dispense with existing restrictions on the number of number of tie-ups by banks with exchange houses and number of drawee branches for rupee drawing arrangements.

However these relaxations could be extended to banks with sound risk management systems. Moreover, public sector banks could study the feasibility of setting up centralised remittance receiving centres, extending the scope of real time gross settlement between banks in India and sensitise NRIs on options to minimise cost of remittance.

It has also been clarified that all categories of foreign exchange earners may, henceforth, retain up to 100 per cent of their foreign exchange earnings in their exchange earners' foreign currency accounts to provide the facility uniformly to all eligible residents.

---

The amount could be used either for current or capital account transactions or for a combination of both

The limit will include gifts, donations and investment by resident individuals in overseas companies

The existing facility for private travel up to $10,000 per financial year will continue to be available on self declaration basis