The Reserve Bank of India (RBI) today permitted banks to let firms draw foreign exchange for payment of royalty for technical know-how overseas without government's prior permission, a move that will encourage technological collaborations.
With this, the RBI has operationalised the government's decision to do away with the requirement of seeking its permission in this regard.
Earlier, the permission of Commerce and Industry Ministry was required for drawing foreign exchange to pay royalty for technical collaborations in case it exceeds 5 per cent of local sales and 8 per cent of exports.
Such permission was also required, if such payments exceed $2 million.
The RBI said in a notification, "...Banks may permit drawal of foreign exchange by persons for payment of royalty and lump-sum payment under technical collaboration agreements without the approval of ministry of commerce and industry."
