Are you planning to travel abroad? Your sojourns abroad are going to be smoother and easier if you’re a credit card holder.With foreign exchange reserves soaring and now crossing the $73 billion mark, the Central Bank has been announcing a host of liberal measures, slowly opening up the closely monitored dollar kitty. The latest Reserve Bank of India measure—after a series of decontrols—is to exclude expenses through international credit cards from the basic travel quota (BTQ) for private and business travel.“This not only effectively increases the annual foreign exchange limit for overseas travellers, it will make life easier for foreign travellers as they don’t have to run around for traveller’s cheques or dollars before they embark upon the journey,” said Avinash Pande, a Mumbai-based travel agent.On the other hand, experts and analysts are viewing this latest RBI measure as part of the central bank’s ongoing exercise to liberalise exchange controls and inch towards full convertibility on the capital account. “Full float of the rupee may be a distant dream. after a few more steps like this, we’ll reach there,” said a banker.Currently, the foreign exchange ceiling for private travel is $10,000 a year, while for business travel it is $25,000 per trip. But now the RBI says that “This facility is available to all residents, subject to their credit limit as may be fixed by the card issuer.” RBI late last year doubled the basic travel quota from $5,000 to $10,000. However, it kept the ceiling on business travel unchanged at $25,000 per trip. It also kept unchanged the limit of $2,000 that travellers can carry in notes and coins while going abroad.There are sceptics who say that the latest measure doesn’t mean anything. “Most of the international credit card holders in India have credit limits. Banks have put a limit of Rs 50,000 or Rs 70,000 on most of the card holders. As a result, the relaxation is not really significant. Moreover, most overseas travellers don’t take more than $2,000 or $3,000 when they travel abroad. As you cannot use more than what the banks have allowed, there is a limit for credit card use abroad,” said a fund manager with a foreign investment firm who’s a frequent overseas traveller.However, credit card holders in the upper bracket who use gold and other premium cards will benefit from the RBI move. A businessman or a corporate executive holding two or three premium cards can increase the funds available at his disposal.The RBI had eased several controls on foreign exchange release recently. It allowed tour operators to sell tickets issued by overseas travel operators such as Eurorail and other rail/road and water transport operators in India, in rupees, without deducting the payment from the travellers’ BTQ. As forex reserves have been soaring of late, one can expect more such steps from the RBI in the near future. Full convertibility may be a distant dream, but definitely more liberalisation is in the offing. Watch out for more action from the Mint Road in Mumbai where the RBI headquarters is situated.
