The Reserve Bank of India (RBI) on Tuesday increased the foreign spending limit, which is the amount Indians can spend or invest abroad in foreign exchange without seeking its permission. Individuals can now buy property abroad, hold shares or debt instruments, or any other asset or purchase gifts up to a limit of $250,000 (Rs 1.5 crore) per person per year.
The earlier limit under the liberalized remittance scheme (LRS) was $125,000 (Rs 75 lakh). Under this scheme, individuals can even open and maintain and hold foreign currency accounts with banks outside India and use them for carrying out transactions, without permission from the RBI.
The limit for foreign exchange under this scheme was reduced to $75,000 (Rs 45 lakh) in 2013 as the rupee fell against the dollar and came under strong pressure. Later, in June 2014, the central bank raised the limit to $125,000 (Rs 75 lakh). And now in Feb 2015 the limit is further increased.
Now, with the higher limit on liberalized remittance, schemes can also be used for purposes like foreign travel, studies, medical treatment, The Interest Rates were kept unchanged at 7.75 % until the government presents the annual budget.
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