India to tighten remittance rules, bar offshore time deposits, sources say
By Shubham Batra
MUMBAI (Reuters) -India's central bank plans to tighten rules for overseas remittances by resident Indians, barring them from holding foreign currency deposits with lock-in periods, two government sources said.
The Reserve Bank of India (RBI) will amend regulations to prevent overseas transfers from being used to park money in time deposits or other interest-bearing accounts abroad, one of the sources said.
"This is akin to passive wealth shifting, which is a red flag for the RBI in a still-controlled capital regime," the first source familiar with the thinking of the central bank said.
The proposed changes reflect India's cautious stance on a rise in outward remittances and full convertibility of the rupee, as authorities strive to safeguard foreign exchange reserves and manage currency volatility, the sources said.
Overseas investments by individuals fall under the central bank's Liberalised Remittance Scheme (LRS) — which allows resident Indians to remit up to $250,000 in a single year — for purposes ranging from foreign education, travel, equity and debt investments to medical treatments.
While discussions with the government are ongoing, the RBI aims to ensure such deposits cannot be made even under alternate names, the second source said.
Both sources declined to be identified due to the confidentiality of the talks. The finance ministry and the RBI did not respond to emailed requests for comment.
The move is part of a comprehensive review of the legal framework governing the scheme to simplify the regulations, a priority highlighted by the central bank in its annual report.
RBI data showed that deposits under outward remittances by resident individuals rose sharply to $173.2 million in March from $51.62 million in February.
Outward remittances typically spike in March as it allows residents to maximise their annual limits and optimise taxes, making it the busiest month under LRS but the RBI is concerned that a portion of this may be getting passively parked.
For financial year 2024/25, total annual outward remittances under the scheme dipped but remained high at nearly $30 billion compared with $31 billion a year ago.
The sources did not disclose the amount currently held in foreign currency deposit accounts, but said the move is "preventative".
India's outward remittances under the scheme have steadily increased, particularly as fintech platforms and private banks have made global investing easier for retail investors.
"The move addresses a growing misuse of the scheme as a vehicle for passive capital export," the second source said.
"It also aligns the scheme more closely with India's calibrated approach to capital account convertibility."
India has remained cautious on allowing unrestricted outflows, partly to preserve its foreign exchange reserves and manage currency volatility.
The revised rules will not affect permissible foreign investments in equities, mutual funds or property under the LRS, the second source said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
an hour ago
- Miami Herald
Hopes Of Lower Tariffs Against European Cars Are Fading Fast
One of the biggest promises of President Donald J. Trump's electoral race was to impose tariffs on foreign imports, and shortly after he was inaugurated for the second time, "tariffs" quickly became one of the buzzwords of his presidency. When it comes to cars, just about anything produced outside of American borders is going to get a lot more expensive, and due to vastly complex international supply chains, even domestically produced products could be impacted. But there was a glimmer of hope that the president would change - or at least soften - his stance against America's allies in Europe. European Union leaders had publicly expressed this expectation, citing a history of cooperation. However, as the July 9 deadline for tariffs to be further increased approaches, hope is fading, reports Reuters. The publication spoke to an anonymous official who reportedly noted that hopes of relief are fading faster now that tariffs have come into effect: "10% is a sticky issue. We are pressing them, but now they are getting revenues." A second source reportedly said the EU still would not accept the baseline rate but acknowledged that it would be difficult to change or abolish the measure. The European Union has also publicly declared that it would not accept double-digit tariffs as the United Kingdom has, but U.S. Commerce Secretary Howard Lutnick has ruled out the idea of any tariffs being lowered under the 10 percent baseline. What makes this worse is that the tariffs don't only apply to finished products; steel and aluminum from Europe face a 50 percent tariff, and that doesn't even include the standalone 25 percent tariff on foreign cars. The good news is that Europe, with a trade surplus of $236 billion with the U.S., needs to continue doing business with the largest economy in the world, so your local BMW dealer isn't closing up shop anytime soon. An EU official is quoted by Reuters as saying that the 10% baseline rate would "not massively erode competitive positions, especially if others receive the same treatment." And although hope of a compromise is fading, it hasn't been extinguished just yet. As noted by CarScoops, European Commission President Ursula von der Leyen has confirmed that negotiations are still underway, despite President Trump's assertion earlier this week that the EU hadn't been fair thus far. "We're talking, but I don't feel that they're offering a fair deal yet," said President Trump. "They're either going to make a good deal or they'll just pay whatever we say they have to pay." Von der Leyen said, "It's complex, but we are advancing - that is good - and I push hard to pick up more speed. So we are mixed in the negotiations, and we will see what the end brings." The United States government is adamant that its long-standing partners are benefitting more from the status quo than America is, and that mindset means that any price increases as a result of tariffs on EU imports will likely not be small. That said, automakers are working to find ways of absorbing as much of the financial strain as possible, and one way of doing that is by pushing sales of existing inventory with incentives and employee pricing offers. Related: Mercedes CEO Has a Trump Tariff Deal That Could Reshape US-EU Auto Trade Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Miami Herald
an hour ago
- Miami Herald
Report: Maserati Under Threat of Being Sold by Parent Company
According to a new report published by Reuters, the storied Italian performance powerhouse, Maserati, may be headed toward an uncertain future. The newswire states that "two sources familiar with the matter" told them that parent company Stellantis is exploring a potential sale of the Trident as part of a broader review of its massive portfolio of 14 distinct automotive brands. Discussions regarding Maserati began before Antonio Filosa was named the automaker's new CEO last month. Filosa's first day as CEO of Stellantis is Monday, June 23, where he will take the helm as Carlos Tavares's formal successor. Tavares, who led Stellantis from its inception, stepped down in December amid disappointing U.S. sales and inventory struggles and growing internal and external pressure to reassess the company's direction. Stellantis Chairman John Elkann has a plate and a half full when it comes to overseeing the company's wide range of global brands, which include the likes of Jeep, Dodge, Ram, Peugeot, and Alfa Romeo. The company is under pressure to streamline its operations and invest wisely. Stellantis is a publicly traded company listed on the stock exchanges of New York, Paris, and Milan, and financially savvy investors and analysts think that trimming down the 14-brand lineup could boost Stellantis' margins. Back in April, they brought in McKinsey & Co., a consulting firm based in New York, to examine the impact of new U.S. tariffs and explore options for Maserati and Alfa Romeo. According to the sources cited by Reuters, selling one or both brands is on the table, but any decisions are still in the early phases. In an emailed statement to Autoblog, a Maserati spokesperson provided the following statement: "A spokesperson for Stellantis stated: 'Respectfully, Maserati is not for sale.'" Additionally, a McKinsey spokesperson told Autoblog in a separate emailed statement that they "have no comment for this story." The timing of the Trident's review coincides with its efforts to position itself to navigate some significant industry challenges. Chinese brands and their affordable, tech-forward offerings are eating into the European market share. Like other European automakers, Stellantis is also trying to navigate the steep U.S. import tariffs recently imposed by President Donald Trump, which can greatly impact import brands like Maserati and the expensive motors it imports in smaller numbers. Unlike Stellantis brands like Dodge, Jeep, and Chrysler, no Maserati comes from a production facility in North America; all of Maserati's U.S. lineup is exclusively imported from Italy. Maserati's performance has been underwhelming, as it faces tough ground in its key markets. According to Maserati Chief Executive Officer Santo Ficili, about 35% to 40% of its customers are American. In 2024, Maserati posted an adjusted operating loss of €260 million ($298 million) as it sold just 11,300 units, with 4,819 of those cars reaching drivers in the United States. One of the sources who talked to Reuters said that Stellantis is starting to realize it has more brands than it can really focus on, adding that it needs to "set priorities" with the matter. They also report that some board members are split on this scenario: some think selling Maserati is the best move, while others worry that getting rid of its only luxury brand would hurt the company's reputation. This is not the first time that Maserati has been speculated to be sold. Notably, last year, comments from former Stellantis CFO Natalie Knight suggested that the Trident may be on the way out at the 14-brand automaker, which has sincebeen refuted. However, what we solidly know is that Maserati and Alfa Romeo's brand CEO said that it has a turnaround plan as soon as Filosa takes the helm on Monday, the 23rd. In a June 5 interview with Reuters, he not only denied that Stellantis was selling Maserati, but he also expressed optimism over the future of the Trident and that Filosa will back potential plans, which include new products on the horizon. "We have clear ideas about what we want to do, and we hope we can be ready very soon. Let's wait for Antonio to take up his job," Ficili told the newswire. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Yahoo
3 hours ago
- Yahoo
Trading Day: On weekend war-watch again
ORLANDO, Florida (Reuters) - - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'd love to hear from you, so please reach out to me with comments at . You can also follow me at @ReutersJamie and @ Cautious optimism around a possible de-escalation in the week-long war between Israel and Iran helped foster a relatively positive tone across world markets on Friday, lifting most stock markets and sealing oil's biggest decline in over a month. You'll note a high degree of equivocation there. President Donald Trump taking up to two weeks to decide on America's involvement offers no immediate clarity, even if he is open to direct talks, and negotiations between Iran's foreign minister and his European counterparts in Geneva are at the early stage. However, Wall Street didn't feel much of the earlier optimism on Friday. Tehran insists it will not talk directly to Washington about a new nuclear deal until Israel ceases its attacks. The bombing and retaliatory strikes continue. It's a fluid and fragile situation, but compared to a week ago when the conflict started, it's perhaps less bleak, which explains why many markets have regained their footing. It's worth remembering that Wall Street and world stocks earlier this week were a whisker away from their record highs. Developments in the war and on the diplomatic field over the weekend will go a long way to setting the tone for markets on Monday. And investors will continue to digest what was, in many ways, a pretty monumental week for central banks. To recap, the Federal Reserve took a hawkish turn in its projected interest rate path even though Chair Jerome Powell signaled policymakers are flying blind, while the Bank of Japan took a dovish turn in its balance sheet reduction plans. The Swiss National Bank cut rates to zero and admitted, albeit reluctantly, that rates could go negative, Norway's central bank delivered a surprise rate cut, and Brazil's central bank defied expectations by raising rates to the highest since 2006 and signaling it could tighten policy further. A raft of Fed officials are on the stump next week, and investors will be looking through the blizzard of headlines to see how the consensus stacks up against the new, less dovish 'dot plots'. Top of the bill will be Powell's semi-annual testimony to Congress on Tuesday and Wednesday. Fed Governor Christopher Waller told CNBC on Friday that a rate cut should be on the table next month because inflation is tame and unlikely to be boosted on a lasting basis by import tariffs. But Richmond Fed President Thomas Barkin told Reuters in an interview there's no rush to cut rates because tariffs could indeed fuel inflation. What's more, the economy and labor market are holding up well right now. It's gone pretty quiet on the trade front, an indication that the Trump administration is finding it harder than it imagined to secure the dozens of trade deals it promised - Trump himself has said that China and Japan are "tough" in their negotiations. China is not blinking, and why should it? As CIBC economists point out, China holds all the cards when it comes to global rare earths and pharmaceuticals supply, the U.S. is a much smaller market for its exports than it used to be, and Beijing has a wider array of retaliatory tools at its disposal than it did in 2018. Last but not least, "the tolerance to pain in autocratic China is notably higher than in the (still) democratic US," they note. The next few weeks will be pivotal for markets as investors eye the half-year point, the July 9 expiry of Trump's pause on 'reciprocal' tariffs, and Trump's two-week window to decide on the level of U.S. involvement in the Iran-Israel war. This Week's Key Market Moves * European stocks underperform. The pan-euro zone STOXX 50slides nearly 2%, Britain's FTSE 100 loses nearly 1%, for theirworst weeks in two months. * The Japanese yen slides more than 1% against the dollarafter the BOJ's dovish tilt on its balance sheet reduction andgovernment's plan to cut super-long bond sales. That's the yen'sworst week of the year. * The Norwegian crown falls 2.5% vs the dollar, one of itsbiggest weekly declines in the last few years, after NorgesBank's surprise rate cut reverses oil-related gains. The crownhit a two and a half year high last week. * A rollercoaster week for oil, with Brent crude trading ina $10 range of around $70-$80/bbl. Friday's slide cuts theweekly gain to 3.5%, but Brent is still up 20% this month, whichwould be its biggest monthly gain since November 2020. * Platinum rises 3%, not a huge move but intra-week ithits its highest level since September 2014 at $1,348/oz on hugeChinese demand. It's up 20% this month, putting June on trackfor the third-best month on record. Chart of the Week Two charts again, and they are related. The first is from Goldman Sachs and shows wage pressures in the developed G10 countries noticeably cooling (admittedly from elevated levels). This helps explain the second, from economist Phil Suttle, which shows developed and emerging market interest rate paths are diverging sharply - interest rates are coming down in DM, not so in EM. How long will that divergence last? Here are some of the best things I read this week: 1. The economic consequences of the second Trumpadministration: A preliminary assessment 2. Should We Have Faith in Markets? 3. The Sources of Global Economic Uncertainty 4. Disentangling trade policy uncertainty and equity marketperformance 5. Trump's economic 'golden age' meets Fed's brass tacks What could move markets on Monday? * Israel-Iran conflict * Singapore inflation (May) * June flash PMIs from Australia, Japan, India, euro zone,UK, and U.S. * Chicago Fed President Austan Goolsbee speaks Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here. (Writing by Jamie McGeever; Editing by Nia Williams) Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
