Reserve Bank of India (RBI) has announced two measures that would enable higher remittances and also ease the process of raising funds through external commercial borrowings (ECB). The central bank has trebled the limit on trade-linked remittances to Rs15 lakh from the earlier Rs 5 lakh and said banks can regularise payments exceeding the limit if they are satisfied with the bonafide of the transaction.
RBI has also allowed overseas banks to enter into swaps with other overseas banks besides domestic banks to facilitate disbursals of rupee loans by overseas lenders. Though, the central bank has said that the continuation of the swap shall be subject to the existence of the underlying ECB at all times. On the due date, settlement may be done through the Vostro account of the overseas bank maintained with its counterpart in India.
The RBI further said a KYC certification on the end client should also be taken by the bank in India as a one-time document from the overseas bank. RBI Deputy Governor H R Khan said that the central bank is working with the government to simplify and liberalise procedures related to foreign exchange regulations to facilitate ease of doing business in the country.