RBI liberalises procedures for conduct of forex business
Mumbai, Apr 18 (UNI) Reserve Bank of India (RBI) today announced several initiatives to liberalise and simplify procedures for conduct of foreign exchange business that includes granting extension of time limit to realised export proceeds upto USD 1 million beyond the prescribed period of six months.
In its annual policy statement, RBI further allowed the banks and authorised forex dealers to remit initial and recurring expenses of the branch office of an indian entity abroad upto 10 and 5 per cent of the average annual sales and income or turnover during the last two accounting years respectively. At present, the limit is upto 2 per cent and 1 per cent respectively.
While examining the various cost structure for Indians remitting small amount of money into India, RBI said that an advisory group under the chairmanship of Mohandas Pai has been constituted to review all foreign exchange regulations relating to services and make appropriate suggestions for further clarification or simplication and prepare a compendium of all foreign exchange regulations that apply to the services sector.
To provide greater access of foreign exchange to individuals, RBI said that more entities were being allowed to handle non-trade current account transactions to enable individuals to have easy access to foreign exchange as well as to enhance competition among the service providers.
Select full-fledged money-changers, urban co-operative banks and regional rural banks are permitted torelease and remit foreign exchange for a range of curent account transaction such as private visit, business travel, free for participation in global conferences and international events like film shooting, medical treatment and imigration consultancyfee.
Subsequently, scheduled commercial banks holding full-fledged authorised dealer licence are designated as authorised category 1 and those undertaking non-trade current account transaction as category II.
BI informed that the anti-money laundering guidelines required authorised money-changers to put in place a policy framework on KYC (know your customers).
UNI GC PP AW1807