New Delhi: Buying that dream home abroad has just got easier as the Reserve Bank of India (RBI) on Tuesday doubled the annual overseas investment ceiling for individuals to $2,50,000 from $1,25,000 as India's foreign exchange reserves have scaled an all-time high.
It means that a family of four can remit up to 1 million dollars overseas and buy assets there. "On a review of the external sector outlook and as a further exercise in macro-prudential management, it has been decided to enhance the limit under the Liberalised Remittance Scheme (LRS) to $2,50,000 per person per year," the RBI said in its Bi-Monthly Monetary Policy Statement.
However, RBI clarified that all current account transactions like medical treatment, purchase of journals, and repayment of student loans and credit card dues would be included under the $250,000 cap.
RBI governor Raghuram Rajan has said that the following decision was taken after analyzing several factors of the economy. He said that an improvement in country's foreign exchange reserves has helped RBI to take this decision.
He further stated that the dip in international crude oil prices and the condition of current account deficit has helped RBI to take this decision. The funds in overseas can be used for any activities excluding a few like funding terror groups or for remittances to Bhutan, Nepal, Mauritius and Pakistan.
RBI will also ask the central government to include under this limit various subsistence that an individual is permitted under Foreign Exchange Management Act (FEMA) which includes donations and gifts as well.
