EASE OF FOREIGN EXCHANGE FOR MISCELLANEOUS REMITTANCES – LIMIT RAISED FROM USD 5000 TO USD 25000

A.P. (DIR SERIES 2011-12) CIRCULAR NO. 118, DATED 7-5-2012
As per current provisions, upto USD 5000 or its equivalent, can be released BY AD, for all permissible transactions on the basis of a simple letter from the applicant containing the basic information, viz., names and the addresses of the applicant and the beneficiary, amount to be remitted and the purpose of remittance. It was clarified in the circular that Authorised Dealers need not insist upon submission of A2 Forms in such cases. (A.P.(DIR Series) Circular No. 55 dated December 23, 2003.)
With a view to further liberalizing the documentation requirements, the limit for foreign exchange remittance for miscellaneous purposes without documentation formalities, has been raised from USD 5000 to USD 25000 with immediate effect.
It is clarified that Authorised Dealers need not obtain any document, including Form A-2, except a simple letter as stated above as long as the foreign exchange is being purchased for a current account transaction (not included in the Schedules I and II of Government Notification on Current Account Transactions), and the amount does not exceed USD 25000 or its equivalent and the payment is made by a cheque drawn on the applicant’s bank account or by a Demand Draft. AD banks shall prepare dummy A-2 so as to enable them to provide purpose of remittance for statistical inputs for Balance of Payment