Norms Eased For Issue Of Travellers Cheques By Local Dealers

The Reserve Bank of India (RBI) has freed the issue of guarantees by local authorised dealers to overseas organisations which sell travellers cheques (TC), including American Express, Visa, Mastercard and Citibank.

Earlier, the issue of guarantees had to be specifically cleared by the RBI. If the guarantee was triggered, the apex bank had to okay the remittance of funds abroad. However, these requirements have now been waived.

Authorised dealers will also be permitted to give guarantees on behalf of their constituents who are full-fledged money changers holding valid licenses, subject to suitable counter-guarantees being issued by them. In case of invocation of guarantees, authorised dealers may effect the remittance but must report it later to the RBI.