With a view to simplifying the procedures and providing greater flexibility in foreign exchange transactions, the Liberalised Remittance Scheme of USD 25,000 (the Scheme) is liberalised further by enhancing the limit of USD 25,000 per calendar year to USD 50,000 per financial year (April- March) for any current or capital account transactions or a combination of both. In addition, as a measure of rationalization, it has also been decided that

• limit of USD 50,000 under the Scheme would also include remittances towards gift and donation by a resident individual.
• investment by resident individual in overseas companies would be subsumed under the Scheme of USD 50,000. The requirement of 10 per cent reciprocal shareholding in the listed Indian companies by such overseas companies has been dispensed with.

Accordingly, AD - Category I banks may allow remittance of USD 50,000 per financial year (April- March) by a resident individual under the revised Scheme. The other terms and conditions as stipulated in the A. P. (DIR Series) Circulars No. 64 dated February 4, 2004 and No. 80 dated March 18, 2004 would continue as hitherto.

In addition, the existing facility of release of exchange by Authorised Persons up to USD 10,000 or its equivalent in one calendar year on a declaration basis for one or more private visits to any country (except Nepal and Bhutan) will continue to be available on a self-declaration basis. However, the facility would be now available on a financial year (April-March) basis.

As indicated in A.P (DIR Series) Circular No.80 dated March 18, 2004, soliciting of deposits etc. under the Scheme by entities which do not have an operational presence in India, gives rise to supervisory concerns. It is therefore clarified that all banks, both Indian and foreign, including those not having an operational presence in India should seek prior approval from the Reserve Bank for the schemes being marketed by them in India to residents either for soliciting foreign currency deposits for their foreign/overseas branches or for acting as agents for overseas mutual funds or any other foreign financial services company.

The resident individual seeking to make the remittance should furnish an Application -cum- Declaration in the revised format as at Annex-1.

AD - Category I banks may arrange to furnish information on the number of applicants and total amount remitted under the Scheme, on a quarterly basis, in the Format at Annex-2, to the Chief General Manager-in-Charge, Foreign Exchange Department, Foreign Investments Division (EPD), Reserve Bank of India, Central Office, Mumbai-400001 within 10 days of the reporting quarter. A soft copy of the statement (in Excel format) may also be sent by e-mail.

Necessary amendments to (i) Foreign Exchange Management (Current Account Transactions) Rules, 2000 (ii) Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 and (iii) Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2000 are being notified separately.