More than two months after its announcement, the Reserve Bank of India (RBI) and the government are yet to formally notify norms allowing Indians to send upto $250,000 abroad annually, raising questions whether authorities were having a re-look at the proposed rule.
At its February monetary policy review, the RBI 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 so far, the annual ceiling remains stuck at the earlier $125,000.
Typically, in such cases, the RBI sends its proposal to the finance ministry which then notifies the step via the official gazette, detailing the schedule of the scheme including the date from which it will be implemented. But there has been no such communication from the finance ministry.
When contacted, the RBI’s spokesperson said: “The notification is pending with the government and banks can allow higher remittances only after the circular/notification is issued. In the meantime any urgent cases get referred to RBI, which are considered on merit.”
A finance ministry official said that the notification was expected soon.
Under LRS, individuals are allowed to send a certain amount of money to another country.
The amount can be invested in shares, debt instruments, and used to buy property or spent on travelling, medical treatment or on education.
The limit under LRS was reduced to $75,000 from $200,000 in 2013 as part of a broad strategy to stem dollar outflow and arrest the slide in rupee, which had hit a record 68.85 to a dollar in August 2013. It was later raised to $125,000 a year in June 2014.
According to RBI data, outward remittances under LRS in financial year 2013-14 were $1.09 billion.