Rbi forex remittance limit

Buoyed by the strong build-up in foreign exchange reserves, the Reserve Bank of India on Thursday 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.
NRE deposit rates capped.
The RBI also capped the interest rates on fresh Non-Resident (External) rupee (NRE) deposits for 1-3 years at 250 basis points above the London Inter-Bank Offered Rate (Libor).
The move is meant to kill the arbitrage opportunities that exist on account of the relatively higher interest rates Indian banks offer on NRE deposits.
Most commercial banks now offer 5 per cent interest on NRE term deposits in the 1-3 year maturity bucket and 5.25 per cent interest on deposits of over three years.
Since the one-year Libor is now hovering around 1.2 per cent, the banks will now pay NRE deposit holders about 3.70 per cent for deposits in the 1-3 year maturity bucket. The RBI's move will effectively an arbitrage opportunity.
ICICI Bank's rate of interest on a 1-2 year NRE deposit is 5.75 per cent while that of State Bank of India is 5 per cent. In contrast, the yield on investments overseas is between 1 per cent and 2 per cent.
In fact, the NRE deposit is the most favoured instrument for non-resident Indians to park their money in India since foreign currency non-resident (bank), or FCNR(B), deposits in foreign currency do not offer such high rates.
Flows into NRE deposits have been increasing over the past few months with the outstanding deposits under this scheme at $15.789 billion at the end of April 2003.
Flows into NRE deposits in April itself increased by $966 million.
"The measure is aimed at blocking an arbitrage opportunity and is totally justified. There will also be an appropriate effect, consequently, on the flow of this money into the country," said HDFC Bank Managing Director Aditya Puri.
But S A Bhat, general manager, Bank of India, pointed out: "Banks will face a problem in the sense that Libor changes every day. So it will be better if the central bank announces the reference Libor rate every fortnight for the purpose of calculating interest payable on NRE deposits."
At present, banks can offer FCNR(B) in foreign currency and NRE deposits in domestic currency to non-resident Indians.
NRE deposits are fully repatriable. The exchange risk in NRE deposits is borne by the depositor. In FCNR(B) accounts the risk is borne by the banks.
Interest rates on FCNR(B) deposits are subject to a ceiling of Libor/Swap rates for the corresponding maturities minus 25 basis points less than 1 per cent on the deposits.

Rbi forex remittance limit

Acknowledging the recent stability on the forex front, the Reserve Bank of India announced a few measures in its bi-monthly monetary policy today that signal a relaxation of some measures announced last year.
The RBI has relaxed the eligibility limit for foreign exchange remittances. It was earlier possible to remit up to $2 00,000 under the liberalised remittance scheme. This was reduced to $75,000 last year, as a prudential measure when the country was going through a sudden depreciation of its currency.
The RBI has decided to hike the eligible limit to $125,000. Guidelines will be issued shortly, the central bank said.
The recent stability in the foreign exchange market has prompted the central bank to relax this limit under the liberalised remittance scheme (LRS), RBI Governor Raghuram Rajan said in the RBI's second bi-monthlymonetary policy statement for 2014-15 issued today.
In another move, both residents and non-residents (except citizens of Pakistan and Bangladesh) will be allowed to take out Indian currency notes up to Rs 25,000 while leaving the country.
Currently, only Indian residents are allowed to take notes up to Rs 10,000 out of the country. Non-residents visiting India were not permitted to take out any Indian currency notes while leaving the country.
With a view to facilitating travel requirements of non-residents visiting India, the RBI has brought this rule change.
Further, with a view to improving the depth and liquidity in the domestic foreign exchange market, the RBI has decided to allow foreign portfolio investors to participate in the domestic exchange traded currency derivatives market to the extent of their underlying exposures plus an additional $10 million. Domestic entities will also be allowed similar access, the RBI said.

RBI relaxes rules on foreign exchange.
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Mumbai: The Reserve Bank of India (RBI) on Tuesday raised the amount of foreign exchange that individuals can take out of the country to $125,000 in a fiscal year from $75,000 earlier.
In its monetary policy review, the central bank said the limit has been hiked “in view of the recent stability in the foreign exchange market”. There are no restrictions with regard to the end-use of foreign exchange except for prohibited transactions such as margin trading and lottery, RBI said. The remittance limit was cut from $200,000 to $75,000 in August last year as RBI tried to restrict the outflow of dollars after a steep fall in the rupee, which hit a record low of 68.85 per dollar.
The central bank also allowed foreign portfolio investors to trade exchange-traded currency derivatives to the extent of their underlying exposures and an additional $10 million “with a view to improving the depth and liquidity in the domestic foreign exchange market”.
Domestic entities have been allowed similar access to currency derivatives, RBI said, adding that detailed operating guidelines will be issued separately.
Non-resident Indians who were so far not allowed to take any Indian currency notes out of the country have been allowed to take out up to Rs. 25,000.
However, citizens of Pakistan and Bangladesh will still not be allowed to take any Indian currency out of the country.
Indian residents who were so far only allowed to take out Rs. 10,000 have also been allowed a higher limit of Rs. 25,000.
The move has been made “with a view of facilitating travel requirements of non-residents visiting India”, RBI said.
“The increase in forex remittance and allowing derivatives are important because it indicates the central bank’s comfort level with the rupee, and though the derivative in itself is not material, it signals the RBI’s intention of bringing the NDF (non-deliverable forward) trade onshore from abroad,” said Naina Lal Kidwai , director (Asia-Pacific) at Hong Kong and Shanghai Banking Corp. Ltd ( HSBC ), and country head, HSBC India.

Rbi forex remittance limit

Golden dragon forex indicator Guaranteed money trading forex Forex anbieter deutschland Fxcm reviews Forex fms Emboldened by the surge in dollar inflows and a strengthening rupee, the Reserve Bank of India has raised the foreign currency limit on remittances for education, employment abroad, emigration, and maintenance of overseas relatives to $ The limit under liberalised remittance scheme is in addition to those already available for foreign travel, studies, medical treatment etc under Foreign Exchange Management Rules. Now, the higher limit on liberalised remittance scheme can also be used for these purposes. RBI governor Raghuram Rajan. Here's how to make the best use of the reduced remittance limit available to Indian investors.
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