Forex dealers told to take unlimited currency

The RBI has also asked authorised foreign exchange dealers to accept cash payment to the extent of US $1,000 or its equivalent per transaction in major towns. However, for smaller towns, the authorised dealers can accept upto US $ 500 or its equivalent.

"While accepting cash payments, authorised dealers can take normal safeguard which they take against tender of forged or stolen traveller cheques," the release said.

The central bank has alsoindicated that the banks can fix higher limits than those prescribed by RBI for such cash payments.

The central bank has asked banks to ensure that the latest exchange rates are available at their branches. "No encashment should be refused on account of non-availability of current rates of conversion," it said.

RBI has asked bank branches authorised to deal in foreign exchange to prominently display the rates and other charges along with rules for encashment and brand name of travellers cheques accepted.

"The banks are free to load into the rates the cost of funds that would be required to be deployed in offering such services," it said. The central bank has also directed the authorised dealers to freely accept for encashment foreign currency notes or travellers cheques tendered by residents who come into possession of these from tourists for services rendered or in settlement of lawful obligations.

The Reserve Bank has issued these instructions to authorised dealers after reviewing the entireprocedure in consultation with Foreign Exchange Dealers Association of India (FEDIA). The central bank had premitted residents in 1994 to receive payment in foreign currency notes and travellers cheques.