RBI increases cap on rupee drawing arrangements by 3 times

The Reserve Bank on Thursday increased the cap on rupee drawing arrangements in trade-related remittances by three times to Rs 15,00,000 per transaction, with immediate effect.

"It has been decided to increase the limit of rupee drawing arrangements (RDAs) for trade-related transactions from the existing Rs 5,00,000 to Rs 15,00,000 per transaction with immediate effect," the RBI said.

The central bank also permitted authorised dealer banks to regularise payments exceeding the prescribed limit under the RDA, provided they are satisfied with the bonafide of the transaction.

Authorised dealer banks, however, have to ensure that the remittances received under RDA are from FATF-(financial action task force)-compliant countries, KYC (know-your- customer)/AML (anti-money laundering)/CFT (combating financial terrorism) and other due diligence concerns.

It further said banks must review and report to RBI individual exchange houses which are frequently sending large value trade related remittances.