The Hindu Business Line : Resident Indians can remit up to $25,000 annually

FOLLOWING the announcements made last month by the Finance Minister, Mr Jaswant Singh, the Reserve Bank of India (RBI) has formulated a scheme whereby resident Indians can, with immediate effect, remit an amount of up to $25,000 per calendar year for any purpose without any distinction between the transaction being on the current account or capital account.

"All resident individuals are eligible to avail of the facility under the scheme. This facility is available for making remittance up to $25,000 per calendar year for any current or capital account transaction or a combination of both," said an RBI release.

Under this facility, resident individuals will be free to acquire and hold immovable property or shares or any other asset outside India without prior approval of the RBI.

Individuals will also be able to open, maintain and hold foreign currency accounts with a bank outside India for making remittances under the scheme without prior approval.

The foreign currency account may be used for putting through all transactions connected with or arising from remittances eligible under this scheme. This facility is in addition to those already available for private travel, business travel, gift remittances, donations, studies, medical treatment, etc. The apex bank has emphasised that the remittance under this facility cannot be used for remittances for any current account transactions specifically prohibited or restricted under the FEMA such as purchase of lottery, sweepstakes, proscribed magazines, etc. Remittances cannot be made directly or indirectly under this scheme to Bhutan, Nepal, Mauritius or Pakistan as well as to countries identified by the financial action task force (FATF) as non co-operative countries and territories, or to those high-risk individuals and entities advised separately by the RBI to the banks. Applicants must furnish PAN number and confirm to the bank that the funds being remitted belong to them.

Banks are expected to carry out due diligence including know your customer norms (KYC) and comply with anti-money laundering rules while allowing this facility, the release said.