The Reserve Bank of India (RBI) has raised the limit for advance remittance for import of services from $100,000 to $500,000 without bank guarantee. According to RBI, the liberalized policy is aimed to facilitate payment to overseas companies. The new policy will help the domestic companies to import services from overseas entities.

  

RBI in its statement said that it has been decided to raise the limit of $100,000 for advance remittance for all admissible current account transactions for import of services without bank guarantee to $5,00,000. Further, in case of remittances beyond $5, 00,000, the companies would have to obtain guarantee from an international bank of repute before the release of the funds by the authorized dealer banks.

 

RBI has explained that banks would be required to ensure that the beneficiary of the advance remittance fulfils his obligation under the contract or agreement with the remitter in India. However, in case the obligations are not fulfilled, RBI statement said that, the amount would have to be repatriated to the country.