What changed
The per-transaction limit for trade-related remittances under Rupee Drawing Arrangements (RDAs) has been raised from Rs 2,00,000 to Rs 5,00,000. This revision is effective immediately and applies to transactions covered under Part (B) of Annex-I to the earlier circular dated February 6, 2008. All other existing instructions remain unchanged.
What it means for you
Banks can now process larger individual trade remittances through RDA channels without needing separate approvals, easing cross-border trade for smaller businesses. This reduces operational friction for AD Category-I banks handling remittances from non-resident exchange houses. The higher limit may increase transaction volumes through vostro accounts, requiring banks to update their internal systems and compliance checks.
What you must do
- Update internal systems and procedures to reflect the new per-transaction limit of Rs 5,00,000 for trade remittances under RDAs.
- Communicate the revised limit to all relevant branches and constituents dealing with Rupee Drawing Arrangements.
- Ensure that all other instructions from the February 6, 2008 circular remain in force and are complied with.
- Review vostro account operations to handle increased transaction sizes without breaching regulatory caps.
Who it affects
AD Category-I banks, Non-resident exchange houses, Importers and exporters using RDA channels, Bank branches handling trade remittances
What is the new trade remittance limit under Rupee Drawing Arrangements?
The limit has been increased from Rs 2,00,000 to Rs 5,00,000 per transaction, effective immediately.
Does this circular change any other instructions related to RDAs?
No, all other instructions from the earlier circular dated February 6, 2008 remain unchanged.
Which legal provisions empower this circular?
It is issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999.