The Reserve Bank of
India (RBI) recently increased the amount Indians can remit in foreign exchange
without end-use restrictions.
The limit under the
liberalised remittance scheme has been increased to $ 1,25,000 from the current
level of $ 75,000 per year. The RBI had in August last year (2013) had cut the
limit to $ 75,000 from $ 2,00,000 as the Indian rupee hurtled towards its
all-time lows of 68 levels per dollar. Now, the rupee has strengthened to about
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 RBI. Individuals can also open,
maintain and hold foreign currency accounts with banks outside India for
carrying out transactions permitted under the scheme.
"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.
Many 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.
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