The Reserve Bank of India on Tuesday increased the amount Indians can invest or spend abroad in foreign exchange without seeking its permission. Individuals can now buy property abroad, hold shares or debt instruments, or any other assets or purchase gifts up to limit of $250,000 (Rs 1.5 crore) per person per year.
The earlier limit under the liberalised remittance scheme (LRS) was $125,000 (Rs 75 lakh). Under this scheme, individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions, without permission from the RBI.
The RBI had reduced the limit for foreign exchange remittances under this scheme to $75,000 (Rs 45 lakh) in 2013 as the rupee came under strong pressure. Later, in June 2014, the central bank raised the limit to $125,000 (Rs 75 lakh).
“On a review of the external sector outlook and as a further exercise in macro prudential management, it has been decided to enhance the limit under the liberalised remittance scheme to $250,000 (Rs 1.5 crore) per person per year,” the RBI said in a statement today. The central bank also eased norms for transactions under the remittance scheme.
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 today said that the lower inflation has helped keep the rupee stable and macro-economic environment of the country has also improved. The current account deficit is likely to be 1.3 per cent this year and perhaps could be even lower next year, he added.
The Reserve Bank of India (RBI) today held interest rates steady at 7.75 per cent on Tuesday after easing monetary policy just three weeks ago, leaving its next move probably until after the government presents its annual budget at the end of this month. ($1 = Rs 60)