RBI makes it easier for Indians to invest abroad

India is already on the path to make complete convertibility on capital account. Currently, we are fully convertible on current account involving export & import of goods and services. However, we are cautilously moving towards the capital account convertibility so that we can achieve it in a phased manner as it will not have any impact on our financial system especially on capital out flows and in turn, the valuation of our rupee vis-a-vis international currencies.

In this direction, RBI has now made it easier for Indian residents to invest abroad by liberalising the remittance scheme of $50,000 for resident individuals. These changes are as follows:

-> Now Resident individuals can invest in stocks of foreign companies, foreign mutual funds or foreign currency deposits in international banks with no Indian presence. previously, inviduals could invest in overseas companies that are listed on a recognised stock exchange and hold at least 10% stake in a listed Indian enterprise i.e you could not buy shares like Google or Bank of New York.

-> Resident individuals can also gift or donate upto $50,000 in a financial year.

-> For all remittances, individuals will have to disclose their PAN number and source of funds along with the beneficiary's name, address and account number.

->With these changes in policy, foreign banks - even those with no branches in India - can sell deposits and other financial services products to residents while Indian banks can act as agents, subject to RBI approval.