RBI raises trade remittance limit under Rupee Drawing Arrangement
Current · Source: Reserve Bank of India · RBI/2013-14/516 · issued 13 Mar 2014 · ~1 min read
Quick answerRBI has increased the per-transaction trade remittance limit under Rupee Drawing Arrangements from Rs 2 lakh to Rs 5 lakh, effective immediately. This applies to transactions routed through vostro accounts of non-resident exchange houses.
The rule, in the simplest words
The RBI increased the per-transaction trade remittance limit under Rupee Drawing Arrangements from Rs 2 lakh to Rs 5 lakh.
This change applies to transactions routed through vostro accounts of non-resident exchange houses.
Banks can now process larger individual trade remittances through RDA channels without needing separate approvals.
How it plays out — a real example
A forex & trade-finance officer in Indore can now process a trade remittance of up to Rs 5 lakh for a local business importing goods from a foreign supplier, without needing additional approvals. This will help reduce operational friction and ease cross-border trade for smaller businesses in the region.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/516
A. P. (DIR Series) Circular No. 111
March 13, 2014
To,
All Authorised Dealer Category - I Banks
Madam / Sir,
Rupee Drawing Arrangement - Increase in trade related remittance limit
Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to Part (B) of Annex-I to the A.P. (DIR Series) Circular No. 28 [A. P. (FL/RL Series) Circular No. 02] dated February 6, 2008 on Memorandum of Instructions for Opening and Maintenance of Rupee/ Foreign Currency Vostro Accounts of Non-resident Exchange Houses, as amended from time to time.
2. On a review of the Permitted Transactions under the Rupee Drawing Arrangements (RDAs), it has been decided to increase the limit of trade transactions from the existing Rs 2,00,000/- (Rupees Two Lakh only) per transaction to Rs 5,00,000/- (Rupees Five Lakh only) per transaction, with immediate effect.
3. All other instructions issued vide A.P. (DIR Series) Circular No. 28 [A. P. (FL/RL Series) Circular No. 02] dated February 6, 2008, as amended from time to time, will remain unchanged.
4. AD Category - I banks may bring the contents of this circular to the notice of their constituents concerned.
5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully
(Rudra Narayan Kar)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/516 · issued 13 Mar 2014. The plain-English explanation above is BankPulse’s own independent summary.
Communicate the revised limit to all relevant branches and constituents dealing with Rupee Drawing Arrangements.
⚙️ Operations
Review vostro account operations to handle increased transaction sizes without breaching regulatory caps.
💻 IT / Systems
Update internal systems and procedures to reflect the new per-transaction limit of Rs 5,00,000 for trade remittances under RDAs.
📜 Compliance
Ensure that all other instructions from the February 6, 2008 circular remain in force and are complied with.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (AD Category-I banks, Non-resident exchange houses, Importers and exporters using RDA channels, Bank branches handling trade remittances), your first concrete step on “RBI raises trade remittance limit under Rupee Drawing Arrangement” is: “Update internal systems and procedures to reflect the new per-transaction limit of Rs 5,00,000 for trade remittances under RDAs.” (RBI issued this 13 Mar 2014).
Action required: Update internal systems and procedures to reflect the new per-transaction limit of Rs 5,00,000 for trade remittances under RDAs.
Action required: Communicate the revised limit to all relevant branches and constituents dealing with Rupee Drawing Arrangements.
Action required: Ensure that all other instructions from the February 6, 2008 circular remain in force and are complied with.
Action required: Review vostro account operations to handle increased transaction sizes without breaching regulatory caps.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8768&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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