In a move to liberalise current account transactions, the Reserve Bank yesterday scrapped the ceiling on foreign exchange remittances overseas for 11 purposes. Earlier, monies remitted abroad above a prescribed ceiling had to be cleared by the apex bank.
The RBI said it did not fear capital flight on this count. The relaxation is expected to increase the remittances by 5-10 per cent. The RBI went ahead with the move after it found the outflow due to relaxation in the foreign exch-ange travel quotas was marginal.
Henceforth, RBI clearance is not required for remittances made abroad for the following: annual maintenance and service charges for imported machinery and software; actual cost of advertisements in print media abroad; initial expenses for opening of overseas non-trading offices/representative offices by eligible exporters; actual cost of imports of designs and drawings; actual cost of goods imported through post parcel; expenses incurred towards legal services relating to import transactions; amount of retainers fees payable to the overseas agents and remittances towards solicitors fees/average adjusters fees by Indian shipping companies.
The bank scrapped the $25,000 ceiling on initial expenses for opening non-trading offices by exporters overseas. Besides, the $10,000 cap on spending by Indian companies for posting representatives has also been lifted.
In case of legal expenses related to imports, the $10,000 limit has been removed. For amounts exceeding $100,000, the necessary details should be reported to the RBI on a quarterly basis.
The $5,000 limit on postal imports has been withdrawn. The remittances made for importing designs and drawings have been freed from the Rs 25 lakh ceiling subject to certain conditions.
Authorised dealers are now allowed to remit the actual amount of retainer fees payable to their overseas agents of Indian companies. Actual expenses incurred by journalists abroad can also be remitted. The eligibility criteria is a circulation of at least 50,000 copies.
The $10,000 ceiling on release of exchange by authorised dealers under electronic data base costs has also been removed. Authorised dealers may also allow remittances of the actual cost of advertisements in print media abroad. Currently dealers are permitted to allow remittances up to $10,000 towards solicitors fees and average adjusters fees in case of shipping companies. An adjuster fixes the cost to be brone by the shipowner and the shipper in case of a mishap. The ceiling here has also been scrapped.
