The RBI scheme under which foreign exchange remittances of individuals have become easier is called the Liberalised Remittance Scheme, started in 2004 to simplify overseas investment avenues available to Indians.
In 2013-14, outward remittances under this scheme amounted to close to $1,100 million. Over $660 million have been remitted in the seven months till October 2014 of the financial year 2014-15.
Apart from investments in equities and debt, this channel is used toward gifts, maintenance of close relatives and education.
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Analyst reports on Tuesday pointed to the RBI move being one of the measures to curtail the strength of the rupee. Nilanjan Banik, Associate Professor, Mahindra Ecole Centrale, said it reflected RBI’s confidence, given healthy foreign exchange reserves (over $320 billion).
He said, “The move by RBI to relax the limit should not be a worrisome factor. Individuals invest a very small amount in relation to the corporates.”