The Reserve Bank of India has
taken fresh measures to suck
out excess foreign capital,
by allowing resident Indians
to open accounts abroad and
transfer up to USD 100,000 without
seeking its approval under the
Liberalised Remittance Scheme
(LRS).
This measure follows the restriction
imposed by the Central Government
on the External Commercial Borrowings
(ECBs) to check the rupee’s
appreciation. Alongside, the
RBI and the Centre have been
encouraging overseas investments
to flush out excess foreign
capital.
Foreign exchange reserves touched
USD 229 billion in the week
ending August 3, 2007 Resident
Indians can remit up to USD
100,000 to acquire assets like
property and invest in mutual
funds, venture funds, unrated
debt securities and promissory
notes without going through
the RBI route. The Liberalised
Remittance Scheme was introduced
in 2004 to facilitate overseas
investments by resident individuals.
Under the scheme, the RBI permitted
upto USD 5000 as gifts and donations.
The LRS permits resident Indians
to purchase employee stock options
of foreign companies if they
are not linked to American Depository
Receipts and Global Depository
Receipts.
For non-resident Indians who
have unpaid overseas loans at
the time they return to India,
the LRS scheme can be used up
to the extent of USD 100,000
per financial year.
The scheme does not permit
overseas remittance to the following
categories:
· Margins and margin
calls to overseas stock exchanges.
· Investments in the
countries of Bhutan, Nepal,
Mauritius and Pakistan
· Remittance to suspect
individuals and organisations
linked to terrorism
· Lottery, sweepstakes
tickets, proscribed magazines
and items prohibited under Schedule
II of Foreign Exchange Management
(Current Account Transactions)
Rules, 2000.
Source: NRI
Realty News
|
