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No permission needed to use international credit cards abroad: RBI
January 30, 2003 16:30 IST
The Reserve Bank of India eased rules on Thursday governing foreign exchange payments that residents can make via international credit cards while travelling abroad, in another move relaxing the country's strict exchange controls.
Until now, residents had to seek permission from the Reserve Bank of India to make forex payments for more than $10,000 in a calendar year while on a private trip and more than $25,000 while travelling on business.
"This facility is available to all residents, subject to their credit limit as may be fixed by the card issuer," the RBI said in a statement.
"There is no separate ceiling prescribed by the Reserve Bank under Foreign Exchange Management Act on expenditure incurred through use of credit cards outside or within India."
This law governs all foreign exchange transactions undertaken by Indian citizens and companies doing business in the country.
But the RBI said that international credit cards could not be used on the Internet or otherwise to buy lottery tickets, banned magazines, take part in sweepstakes and pay for call-back services.
India, which is sitting on a record pile of foreign exchange reserves, totalling $72.4 billion, has been steadily liberalising its strict exchange controls over the past few months.
Indians can freely exchange rupees for other currencies and vice-versa for importing or exporting goods and services, but foreign exchange transactions involving the transfer of assets like shares and real estate are restricted.
Earlier in the month, India doubled the ceiling on mutual funds' investments in overseas stock exchanges to one billion dollars and allowed companies and individuals to invest in listed foreign firms holding a minimum stake of 10 per cent in an Indian company.
It also allowed remittances of up to one million dollars upon the sale of assets and removed the $20,000 ceiling on remittances via employee stock options.
In early November, it allowed overseas funds to hedge their entire foreign currency exposures arising from investments in Indian equities instead of just 15 percent earlier.
These measures followed moves earlier in November that allowed residents to deposit foreign currency obtained abroad -- through payments received for services provided, honorariums or gifts and residual travel money -- in domestic current accounts with no ceiling.