A notification allowing an Indian to spend $ 2.5 lakh abroad in a year, has been issued by the Finance Ministry. Reserve Bank of India has done the same three months back.. A higher limit has been notified compared to the previous limit of $ 1.25 lakh per year because of forex reserves getting stronger at $ 353 billion.
- The higher limit can be used by an individual for private trip to any country except Nepal and Bhutan, gift or donations, going abroad for employment or emigration.
- It also includes maintenance of close relatives abroad, business travel trips, conference attending trips or any training, studying abroad, medical expenses etc.
- In 2013, Reserve Bank of India, reduced the eligibility limit for foreign exchange remittances under the Liberalised Remitances Schemes LRS to $ 75,000.
- This limit was increased to $ 1.25 lakh dollars as there was stability in the foreign exchange market without any end-use restrictions ecept for lotteries,margin trading etc.
- If any individual remits any amount LRS in a financial year , then the applicable limit for those would be reduced from 2.5 lakh by the amount remitted by them.
- A person who is a resident but not a permanent resident of India can make use of this facility.
- Also all foreign nationals except those from Pakistan, also to Indian citizen on deputation to office or branch of foreign firm or joint venture in India of such foreign firm or a subsidiary.
Reserve Bank of India – RBI
- RBI is India’s central banking institution which controls Monetary Policy of Indian Rupee.
- Established on 1st April 1935.
- Present Governor is Raghuram Rajan.
- RBI plays major part in the developmental strategy.
Forex– what it is??
- It is foreign exchange market or FOREX is decentralized market for currency trading.
- It is the largest market in the world.
- Foreign exchange market determines relative value of various currencies.