Clarification !!! Foreign Remittances – RBI ups limit of inward remittance to 30 in a year

Clarification

I have received lot of queries related to the RBI Circular regarding the Money Transfer from abroad.   The clarification for the same is given below.

Money Transfer Service Scheme (MTSS ) is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India. Only personal remittances such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible. Remittance in the nature of donations or charity is not permitted under this scheme. The system envisages a tie-up between reputed money transfer companies abroad (Eg. Western Union, UAE Exchange Company etc)  and agents in India (Eg. Indian Post Office, Muthoot, other NBFCs, etc) who would disburse the funds to the beneficiaries at ongoing exchange rates. The system does not envisage the repatriation of such inward remittances so this money is not eligible to credited in the NRE account. The Indian agent is also not allowed to remit any amount on account of exchange loss to the overseas principal.

This MTSS system of remittance of money from abroad is basically operated by agents of  Non-banking money exchange companies like Western Union, UAE Exchange Company etc and this rule is not applicable for money remitted through normal banking channels to your NRE account.   Also the limit of USD. 2,500/- per remittance is applicable to only the money transfer made through these money exchange companies.   Also, this money is non-repairable hence not eligible to be credited in your NRE/FCNR accounts.  



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Foreign Remittances – RBI ups limit of inward remittance to 30 in a year

The Reserve Bank of India (RBI) on Friday raised the limit on the number of foreign remittances an individual can receive from 12 to 30 per calendar year. However, the cap on the amount of each transaction has been kept unchanged at $2,500 per person.  This had been a long-standing demand from money transfer agents who had received such requests from customers.

According to experts, India is the largest receiver of remittances from other countries. A report released by the World Bank suggested remittances to India would be $64 billion in 2011, marginally higher than those to China. The World Bank had revised the estimates from $58 billion on the basis of the view that a weak rupee and robust economic activities in the Gulf countries would lead to a surge in remittances

 

RBI/2011-12/596
A. P. (DIR Series) Circular No. 132

June 8, 2012

To,

All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme.

Madam/ Sir,

Money Transfer Service Scheme

Attention of all Authorised Persons (APs), who are Indian Agents under the Money Transfer Service Scheme (MTSS) is invited to paragraph 5 © of the Notification dated June 4, 2003 on MTSS and the specific permission accorded to them under FEMA, 1999 by the Reserve Bank to undertake inward cross-border money transfer activities in India, through tie-up arrangements with Overseas Principals.

2. It has been decided to increase the number of remittances from 12 to 30 to be received by a single individual beneficiary in a calendar year.

3. All other instructions contained in the said Notification ibid, as amended from time to time remain unchanged.

4. These guidelines would also be applicable mutatis mutandis to all Sub Agents of the Indian Agents under MTSS and it will be the sole responsibility of the APs (Indian Agents) to ensure that their Sub Agents also adhere to these guidelines.

5. Authorised Persons (Indian Agents) may bring the contents of this circular to the notice of their constituents concerned.

6. The directions contained in this Circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management  Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals if any, required under any other law.

Yours faithfully,

(Rudra Narayan Kar)
Chief General Manager

Hope, I clarified your quires. So I am not going to respond to your individual queries.  Please treat this as my reply to your quires related to the above subject.