RBI PUTS CURBS ON OVERSEAS SPECULATION

The Reserve bank of India (RBI) has restricted individuals from utilizing the facility of the $ 100,000 scheme for maintaining any kind of speculative positions in overseas markets. RBI has clarified that individuals cannot remit any amount under this scheme for margins or margin calls to overseas exchanges or overseas counter parties. Banks have also been instructed not to extend any kind of credit facilities to resident individuals to facilitate remittances under the scheme. The facility will be only for permissible current and capital account transactions specified under the Foreign Exchange Management Act. Earlier the RBI had specified that this facility could be used for remittance towards gift, donation and for investing in overseas companies listed on recognized stock exchanges overseas. The scheme had originally permitted remittance of $ 25,000 in 2004 which later was revised upward to $ 50,000 in 2006.