Govt yet to notify new overseas remittance ceiling
SOME RECENT DEALS: Total value of M&As (inbound and outbound) in 2014 — highest in 10 years — involving 1,177 deals
No. of cases earlier
IN FEBUARY, RBI HAD DOUBLED THE CEILING UNDER THE LIBERALISED REMITTANCE SCHEME TO $250,000 PER YEAR
The government is yet to formally notify norms allowing Indians to send up to $250,000 abroad annually, raising questions whether authorities were having a re-look at the proposed rule.
The delay notifying the easier rules comes at a time when the Reserve Bank of India (RBI) has said that India was “fairly” open on capital movements and hoped that there would be full capital account convertibility in a short period.
“The only place today that we have some restrictions is inflows into debt, especially very shortterm debt. I think that most people would agree that opening up to short-term debt flows is usually not very clever for reasons of financial stability. My hope is that we will get to full capital account convertibility in a short number of years,” RBI governor Raghuram Rajan said recently while responding to questions posed by students at the Gokhale Institute of Politics and Economics in Pune.
Full capital account convertibility typically implies no restrictions on the amount on cross-border movement of currencies.
At its February monetary policy review, RBI had doubled the ceiling under the so-called Liberalised Remittance Scheme (LRS) that allows people to remit money overseas without specific approval to $250,000 annually.
However, in the absence of any notification by the finance ministry so far, the annual ceiling remains stuck at the earlier $125,000.
“The issue is being looked into and would soon be sorted,” an official source said.