RBI Increases Individuals' Spending Limit Abroad

The Reserve Bank of India today increased the amount Indians can remit in foreign exchange without end-use restrictions. The limit under the liberalised remittance scheme has been increased to $125,000, from the current level of $75,000 per year. The Reserve Bank had in August last year had cut the limit to $75,000 from $200,000 as the Indian rupee hurtled towards its all-time lows of 68 levels per dollar. Now, the rupee has strengthened to around 59 levels per dollar. Under the current liberalised remittance scheme, all resident individuals, including minors, are allowed to freely remit up to $75,000 per financial year for any permissible current or capital account transaction or a combination of both. Under the scheme, resident individuals can acquire and hold shares or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the scheme. "Most Indians generally remit abroad for the purpose of funding stock and mutual fund investments, purchasing gifts, donations or medical expenses. This new development can be positive for individuals to diversify their assets and bring down risk in their portfolio of investments," said Ashwin Shetty, vice president of global treasury at UAE Exchange, a firm that deals with primarily in remittance, currency exchange and bill payment solutions. "In view of the recent stability in the foreign exchange market, it has been decided to enhance the eligible limit to US$ 125,000 without end use restrictions except for prohibited foreign exchange transactions such as margin trading, lottery and the like," the RBI said in a statement. In another move, the Reserve Bank also increased the amount of Indian currency notes Indians and non-residents can take out of the country. The limit has been hiked to Rs 25,000. At present, only Indian residents are allowed to take Indian currency notes up to Rs 10,000 out of the country. Non-residents visiting India are not permitted to take out any Indian currency notes while leaving the country. In a statement the RBI said, "With a view to facilitating travel requirements of non-residents visiting India, it has been decided to allow all residents and non-residents except citizens of Pakistan and Bangladesh to take out Indian currency notes up to Rs 25,000 while leaving the country."

RBI Increases Individuals' Spending Limit Abroad

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