Indian rupee is witnessing sharper depreciation in the ongoing Covid-19 pandemic situation. The rupee traded in the range of 75.27 to 75.50 per US dollar on Friday and finally settled at 75.46 per US dollar. Experts forecast that it could breach over 80 mark to a dollar if the Covid-19 related disruptions are prolonged till June end.
An analysis by credit rating agency, Acuite Ratings and Research, indicates that if the impact of the pandemic is particularly severe with a lockdown in India for the whole of April-June quarter along with global oil prices averaging at $40 per barrel, the rupee may inch up to the band Rs. 81-83 per dollar during this period.
The depreciation in rupee is always an expensive affair for those who are planning a foreign trip or have to make some transactions in dollars. The other side of the story is that mostly persons fall short of knowledge about the rules governing the remittances in foreign currency.
How much to carry foreign currency while on tour to abroad? How to buy the foreign currency? How to carry the currency?
These are some questions which usually hit the minds of a common man while planning a travel to foreign country.
Basically, one of the readers posted a query to know if permission is needed from the Reserve Bank of India for buying foreign exchange for medical treatment abroad. Some parents want to know the permissible limit of foreign exchange for study abroad? And where they can buy the foreign currency?
Let’s first understand the Reserve Bank of India’s Liberalised Remittance Scheme (LRS). Under the Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.
How much foreign currency one can carry?
As envisaged in the Liberalized Remittance Scheme (LRS), you are allowed to freely remit up to $250,000 (around Rs.1.89crore as on 13 May) per financial year for any permissible transactions through banking channels. You can carry Indian currency (in cash) up to Rs.25,000 and foreign currency notes or coins up to $3,000 per foreign trip. The balance amount can be carried in the form of store value cards, traveller’s cheque or banker’s draft. Notably, these limits apply when you travel to almost all countries in the world, barring a few, including Nepal, Bhutan, Libya, Iraq, Iran and the Russian Federation, among others.
What are the areas broadly covered under the scheme?
You can avail foreign exchange facility for studies abroad, travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up. You can also avail the facility to make donations. Private visits to any country (except Nepal and Bhutan), going abroad for employment, expenses in connection with medical treatment abroad etc. also are covered under the scheme.
Notably, the banks won’t require any RBI permission for such transactions. It’s for the bank to satisfy themselves about the genuineness of the transactions
Is there any particular time for buying the foreign exchange before the travel date?
There is no specific time limit to obtain foreign exchange. Usually, you can buy it six months before your travel date from an authorized dealer. As per the law, you can exchange forex equivalent to up to Rs.50,000 if you want it in cash. If the amount of forex you want to buy is equivalent to or more than Rs.50,000, the payment has to be made by way of a crossed cheque, banker’s cheque, pay order, demand draft, debit card, credit card or prepaid card only. And, it’s mandatory to have a valid passport and visa (if required for travel to that country) while seeking foreign exchange facility.
What is the convenient way to carry foreign currency?
Don’t carry currency only in one medium. A combination of forex cards and a little amount of currency works well. You should also activate debt or credit cards for international use when travelling abroad, but avoid using them since there’s a high transaction fee associated with them.
Experts say that one should always be prepared in advance, and never exchange at the airports as the person will have to shell out a 5-10% more when you buy or sell currency there. Prefer to buy the foreign exchange from authorized dealers and banks.
How much unspent foreign currency can be brought back to India?
There is no limit to bringing back unspent foreign exchange while returning from a foreign trip. But if the aggregate value of the foreign exchange exceeds $10,000 or its equivalent and/or the value of foreign currency alone exceeds $5,000 or its equivalent, it should be declared to the customs authorities at the airport in the Currency Declaration Form (CDF), on arrival in India.
You have to surrender any unspent foreign money if held in the form of currency notes and travellers’ cheques within 6 months of your return. However, you can retain foreign exchange up to $2,000 in the form of foreign currency notes or traveller’s cheque for future use.