New RBI Guidelines for Foreign Exchange Transactions

Indians need foreign currencies to travel abroad and transfer funds across countries. The Reserve Bank of India governs the foreign exchange (Forex) transactions via the Foreign Exchange Management Act (FEMA). The outward remittance limits, TCS on foreign remittance and guidelines for different entities/ organizations are defined under the various schemes and regulations of the FEMA Act. Hence it is important to know the RBI guidelines for foreign exchange transactions.

New RBI Guidelines for Foreign Exchange Transactions
New RBI Guidelines for Foreign Exchange Transactions

Highlights of RBI Guidelines for Foreign Exchange Transactions

  • As per the RBI guidelines, up to USD 25,000 remittance is allowed during a calendar year.
  • You are allowed to remit in a foreign currency for any permissible transactions.
  • Resident Indians can buy FOREX up to USD 25,000.
  • If you bring FOREX over and above the prescribed limit to India, you must declare it.
  • You can keep a maximum of USD 2,000 or its equivalent in cash notes or tarveller’s cheques. 

RBI Guidelines for Outward Remittances

Listed below are the FEMA guidelines under the Liberalized Remittance Scheme (LRS) for money transfer abroad from India: 

Maximum Limit

Indian residents are allowed to remit funds up to the LRS limit of USD 25,000 each calendar year for any RBI-approved current or capital account transactions, or a combination of both. 

Authorized Institutions

The Reserve Bank of India grants permission to two kinds of institutions, or authorized persons, for transferring money abroad from India.

1. AD Banks (Authorized Dealer – I)

2. Currency Exchange Service providers having AD-II category license (Authorized Dealer – II)

Mandatory Requirements

For FOREX transactions conducted as per RBI guidelines for the same, you must fulfill requirements set by the Reserve Bank of India. You have to submit your KYC (Know Your Customer) documents and send funds for approved purposes. 

RBI Guidelines for Foreign Exchange Transactions (on currency exchange)

  • You need to submit the required KYC documents to purchase foreign currency.
  • You can’t buy the forex before 60 days of your travel date mentioned on your air ticket.
  • As per RBI guidelines, you can buy forex of up to USD 25,000, or its equivalent in any currency. Out of USD 25,000, you can get cash of up to USD 2,000.
  • You can get a Forex card or traveler’s cheque to carry the remaining amount.
  • You can make transactions not exceeding Rs. 50,000, whether cash or online. 

RBI Rules for Selling Foreign Currency

You need to follow the below mentioned RBI guidelines for foreign exchange transactions to sell forex:

  • You need to submit the KYC documents required for selling foreign currency.
  • You must surrender the balance of Forex kept in the forex card, traveler’s cheque or cash, within 180 days of returning to India. You are only allowed to keep foreign exchange up to USD 2,000, or its equivalent in other currencies, in foreign currency notes or traveler’s cheques.
  • Although you can bring back any amount of forex to India, you must declare the same through a currency declaration form (CDF) if you have currency notes of more than USD 5,000, or currency notes and traveler’s cheques more than USD 10,000.  

You can get preferential rates on currency conversion and a host of benefits when remitting from India to abroad for your loved ones by contacting SBNRI experts. At SBNRI, we keep an eye on the exchange rate on a regular basis to help NRIs with their remittances and investment. You can download SBNRI App to connect with our experts. They will help you evaluate the optimal time for remitting money to India from Australia. 

You can also click on the button below to ask any questions. Visit our blog and YouTube Channel for more details.

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Who can have International Credit Card (ICC) and International Debit Card (IDC) for undertaking foreign exchange transactions?

Resident Indians traveling on a private/ business visit abroad can hold International Debit Cards (IDCs) and International Credit Cards (ICCs) for drawing cash or making payment to merchant establishments overseas during their visit abroad. The usage of IDCs shall be within the LRS limit.  

Where can I get an International Debit Card (IDC)? 

Banks authorized to deal in foreign exchange can issue international Debit Cards (IDCs) to Indians traveling abroad or for making international financial transactions in a foreign currency.

Is prior permission from RBI required for issuing such international debit cards (IDCs)?

No prior permission from the Reserve Bank of India is required for the issuance of such cards. However, the use of the cards are limited to RBI-approved current account transactions and subject to the LRS limit.

For what purpose can I use ICCs/ IDCs?

You can use ICCs/ IDCs for traveling abroad for various purposes and for making personal payments like subscription to foreign journals, internet subscription, etc. 
ICCs/ IDCs can’t be used for financial transactions mentioned in Schedule 1 of FEM (CAT) Amendment Rules 2015, including purchase of lottery tickets, sweepstakes, banned magazines, etc.
Use of these financial instruments is prohibited for payment in foreign exchange in Nepal and Bhutan.

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