MUMBAI, Dec 7: The Reserve Bank of India (RBI) has allowed Indian residents to use international credit cards (ICC) for buying personal articles when travelling abroad. Purchases are, however, limited within the foreign exchange limits prescribed by the central bank for personal use abroad.

The central bank has relaxed the restriction on the issue of international credit cards. It has permitted authorised dealers (ADs) to issue international credit cards to residents availing their basic travel quota (BTQ) up to $3000 per annum. Banking industry has interpreted the move as yet another step towards capital account convertibility.

At present, the use of international credit cards by resident Indians going abroad is permitted for business visits, participation in seminars/conferences, study tours, specialised training and medical treatment and for payment of hotel bills, car rentals, telex/telephone charges, secretarial services, medical expenses, purchase of tickets for travel to other counties in contingencies.

In addition, residents are allowed to use credit cards for payment of subscriptions to foreign magazines/journals and for payment of access fees for interner related services at actuals without any monetary ceiling.

"This has made it clear that the Reserve Bank is unfazed about the recent developments in the forex market and there is no significant change in its commitment to usher in capital account convertibility in due course," a senior banker pointed out.

The Reserve Bank has also permitted residents to use these credit cards for all bona fide purposes, including making payments for purchase of articles for personal use within the foreign exchange entitlement, said an RBI release. Import of goods purchased through credit cards into India will, however, be governed by the baggage rules, the RBI release clariried.ICCs cannot be used for purposes of going abroad for employment or emigration.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.