RBI may pin sunset clause to current, capital a/c measures

The Reserve Bank of India (RBI), as part of its foreign exchange policy, is considering a proposal to attach a sunset clause on all forthcoming current account and capital account measures for individuals.

The clause will require such norms to be valid up to a year, beyond which it should lapse if there is no further notification.

The proposal is line with the Tarapore Committee recommendations, as per which it has been decided to review annually the $25,000 limit for individuals to be spent abroad annually.

At present, all such norms announced by the central bank are open ended with no such clause for annual review.

The standing committee on procedures and peformance audit on public services headed by former deputy governor, S S Tarapore had suggested a slew of measures for facilitating easier procedures for customer service in various departments. These departments include foreign exchange, banking operations and government business.

Among other things, he has also suggested simplification of tax forms for declaration by non-resident Indians and exporters for their remittances.

For non-resident accounts, which do not allow joint accounts, the committee has suggested operating on the account through power of attorney.

The central bank is also mulling over proposing an ordinance to the Public Debt Act and Banking Regulation Act for allowing nomination facility, in joint holding in RBI savings bonds as per the suggestions.

Moreover, there is a proposal to enable tradability in these bonds and availing loans against pledge of these bonds. For most of the small savings instruments retailed by the RBI, there will one standardised application.

The Reserve Bank of India has set up a committee on procedures and performance audit on public services as per the proposal mooted in the mid-term review of monetary and credit policy for 2003-2004.

One-year rider

• The clause will require current and capital account measures for individuals to be valid up to a year, beyond which it should lapse if there are no further notifications.
• The RBI proposal is line with the Tarapore panel recommendations based on which it has been decided to review annually the $25,000 limit for individuals to be spent abroad annually.
• At present, all such norms announced by the central bank are open ended with no annual review rider.