RBI Guidelines for Foreign Exchange Transactions

Key Takeaways

• RBI allow remittance of up to USD 25,000 per calendar year.

• You can remit in foreign currency for an RBI-approved purpose.

• You can buy FOREX up to USD 25,000 only.

• If you bring FOREX beyond a specified limit to India, you must declare it.

• You may keep a maximum of USD 2,000 (or equivalent) in cash notes or Traveller’s Cheques.

Whether you wish to travel abroad or make international money transfers, you may need foreign currencies from time to time. In India, the foreign exchange (Forex) transactions are governed by the Reserve Bank of India (RBI) via the Foreign Exchange Management Act (FEMA). As someone with access to foreign currency, you should know RBI guidelines for Foreign Exchange Transactions. Read on.

RBI Guidelines for Outward Remittance

For outward remittance transfers conducted by resident individuals, the FEMA guidelines are listed under the Liberalized Remittance Scheme (LRS).

Maximum Limit

According to the LRS, a Person Resident in India can transfer funds up to the LRS limit of USD 25,000 per calendar year for any permissible current or capital account transactions or a combination of both.

Approved Institutions

RBI approves two kinds of institutions, or authorised persons, which can facilitate sending of money abroad:

1. AD Banks (Authorised Dealer – I)

2. Money changers having AD-II category licence (Authorised Dealer – II).

Mandatory Requirements

For successful FOREX transactions undertaken per RBI guidelines for foreign exchange transactions, you must comply with RBI requirements. You should send funds according to RBI-approved purposes and submit the Know Your Customer (KYC) documents.

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