RBI May Hike Individual Spending Limit Abroad To $200,000 A Year
NEW DELHI: Individuals travelling abroad may soon be allowed to spend $200,000 overseas in a year as against the present ceiling of $75,000.
“The RBI may eventually reverse all measures taken to contain the current account deficit and currency fluctuation in July-August last year,” a finance ministry official said.
The Reserve Bank of India could raise the limit sometime this year based on its assessment of the external sector, the official said.
As part of restrictions imposed in August last year to contain the burgeoning current account deficit (CAD), the Reserve Bank of India had lowered the outward remittance limit to $75,000 in a financial year for any permitted current or capital account transaction or a combination of both.
The CAD had touched a record high of $88.2 billion or 4.8 per cent of GDP in FY13. It, however, is estimated to have come down to below $32 billion or 1.7 per cent of GDP in FY14.
The rupee has strengthened to sub-59 level against dollar from a high of nearly 68.85 in August 2013.
This remittance limit was allowed under the condition that the fund should not be used for acquisition of immovable property, directly or indirectly, outside India.
Resident individuals were allowed to use this limit for setting up joint ventures (JV) or wholly-owned subsidiaries outside India.
Last week, the central bank had eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.