Basic Forex Travel Quota Hiked To $3,000

The Reserve Bank of India (RBI) yesterday increased the basic travel quota per individual to $ 3,000 an increase of $1,000 per year.

Besides, the apex bank has enhanced banks powers to release foreign exchange as part of the liberalisation package announced yesterday.

In a move aimed at liberalising foreign exchange control, RBI has enhanced banks powers to release foreign exchange for various trade-related activities, in particular, remittances made by airline and shipping companies for passage, freight, agents remuneration, insurance and operating expenses, among others.

Banks can now release foreign exchange per individual up to $3,000 towards basic travel quota (BTQ), $ 2,500 for employment overseas (in addition to the BTQ), $1,000 per year towards gifts to friends/relatives, $1,000 towards donations abroad and $ 3,000 for emigration.

 

The earlier limits per beneficiary were $2,000 towards BTQ, $500 per calendar year towards gifts, $500 towards donations and $500 per person or $ 1,000 per family for emigration. RBI has enhanced limits for banks to effect advance remittances towards import without a bank guarantee to $15,000 from $5,000.

With regard to tie-up arrangement for surface transportation, banks can release advance payment up to 10 per cent within an overall ceiling of $50,000 per tie-up arrangement. Banks will also be able to release exchange under tie-up arrangements between Indian agents and overseas principal for booking hotel accommodation abroad subject to certain terms and conditions.

Banks will no longer seek the RBI nod to remit surplus freight collection by off-line carrier and foreign shipping companies. With regard to remittances of break bulk agents remuneration on outward consolidation of air cargo, banks will allow remittances to the agent abroad, after the appointment of the break bulk agent is approved by the RBI.

Banks will also have to seek RBI approval for consolidation of outbound cargo by sea and remittance of freight prepaid on inward consolidation by sea. Operating expenses of Indian airlines and shipping companies can now be met with by banks as per the customers actual requirements.

The quarterly block allocation, which was in use so far for meeting of operating expenses, is no longer compulsory.

Banks will now be allowed to make remittances on the basis of the agreement as far as remuneration to agents abroad of Indian airlines and shipping companies is concerned.

For remittances of operational charges by Indian courier companies, RBI will grant renewal to the present no-objection certificate (NOC), or issue fresh NOC. The remittances will, thereafter, be allowed by the designated branch of the bank on a monthly basis.

Powers have also been delegated to banks to allow charter in respect of export/import cargo. The remittances, however, will be allowed through designated branch only.

However, remittances for advance payment of import cargo will continue to be handled by RBI. Banks are also allowed to make remittances by multimodal transport operators (MTOs) to their agents overseas, and remittance towards insurance premium to TT club by MTOs.

With respect to remittance of current income, powers are now delegated to banks to make such remittances without RBI clearance for applications.Up to $3,000 per person towards basic travel quota ($2,500)

Up to $2,500 per person in addition to basic travel quota

Up to $1,000 per person per year towards gifts to relatives/friends ($500)

Up to $1,000 towards donations to charitable/educational/religious/cultural organisations abroad ($500)

Figures in brackets indicate the earlier quota