Legal Question in Banking Law in India

Hi,

We are a web hosting / SaaS company who have several vendors in the US.

We currently use wire transfer to make outward payments. The average monthly value is over 25,000$ USD outward wire.

My question is

1. Are Indian Citizens allowed to use Credit / Debit cards to make these outward international business payments?

2. Is there any maximum amount ceiling prescribed by RBI ?

3. Is it ok to use credit card / debit card on international sites to make payments over 100,000$ usd a month.

If it is allowed, it would be more convenient to use a credit card to make payment than a wire transfer.

I've gone through the RBIs master circular and as far as i can see, RBI says, ICC/IBC are allowed to be used to make foreign exchange current account payments without any maximum limit.

But some of the RBI circular says that the maximum limit would be 10,000$ in a year for a card holder.

Please clarify on the facts.

Please note that the outward payment is for business. The recipient are US Data centers / Software providers.


Asked on 3/05/14, 5:43 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

24.03.2014

Dear Sir / Madam,

You are required to adhere to all RBI directives and guidelines issued from time to time, for making remittances from your A/c to any other party located outside the country. To the best of my knowledge the maximum limit for ICC/IBC is restricted to US Dollars 10,000 per year.

I recommend you obtain pre-sanctioned limits from RBI for outward remittances in excess of US $ 10,000/- per year.

Regards,

Read more
Answered on 3/23/14, 9:30 pm


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