Banks update systems to log int'l credit card spend

Plea for review of issue still pending with government

- AATHIRA VARIER & MANOJIT SAHA

Commercial banks are gearing up to capture overseas credit card spends under the liberalised remittance scheme (LRS) from April 1, even though their plea for a review of the issue is still pending with the government.

Last year, the government announced that credit card spends in a foreign currency would be a part of LRS' annual limit of $250,000. Additionally, cardholders also have to pay tax collected at source (TCS) of up to 20 per cent for foreign transactions made through a credit card. The implementation of the scheme was deferred following representations from industry players.

Even as banks await a response from the government, they have put a system in place to capture such transactions under LRS.