RBI to bar offshore fixed deposits, limit remittance rules

The Reserve Bank of India (RBI) 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.

- Reuters

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 people said.

"This is akin to passive wealth shifting, which is a red flag for the RBI in a still-controlled capital regime," the first person familiar with the thinking of the apex bank said.