Module: | MODULE A: INTERNATIONAL BANKING
Q41: Consider the following statements regarding the retention and surrender of foreign currency cash and coins by resident individuals:
Statement 1: A resident individual is legally permitted to hold and retain foreign currency notes or travelers cheques up to a maximum limit of 2,000 US Dollars or its equivalent indefinitely.
Statement 2: Any unspent foreign exchange in the form of currency notes exceeding the retention limit must be surrendered to an Authorised Dealer bank within 180 days of returning to India.
Statement 3: There is a strict quantitative limit of 5,000 US Dollars on the value of foreign coins that a resident individual can hold in India at any given time.
Which of the statements given above are correct?
Statement 2: Any unspent foreign exchange in the form of currency notes exceeding the retention limit must be surrendered to an Authorised Dealer bank within 180 days of returning to India.
Statement 3: There is a strict quantitative limit of 5,000 US Dollars on the value of foreign coins that a resident individual can hold in India at any given time.
Which of the statements given above are correct?
✅ Correct Answer: A
The correct answer is A. Statements 1 and 2 are correct, while Statement 3 is incorrect.
The foreign exchange regulations dictate how much physical foreign currency a resident citizen can keep after returning from an overseas trip.
Structurally, to accommodate frequent travelers and numismatic collectors without encouraging illegal currency hoarding, the central bank allows any resident individual to indefinitely retain foreign currency notes and travelers cheques up to an aggregate value of 2,000 US Dollars or its equivalent in other currencies.
This validates Statement 1. If the unspent foreign cash exceeds this 2,000 US Dollars threshold, the excess amount legally must be surrendered to an Authorised Dealer bank within 180 days of the traveler's return to India, making Statement 2 accurate.
Historically and currently, the central bank completely exempts foreign coins from these retention limits.
A resident individual is permitted to hold an unlimited amount of foreign coins indefinitely without any requirement to surrender them, making Statement 3 fundamentally false.
The foreign exchange regulations dictate how much physical foreign currency a resident citizen can keep after returning from an overseas trip.
Structurally, to accommodate frequent travelers and numismatic collectors without encouraging illegal currency hoarding, the central bank allows any resident individual to indefinitely retain foreign currency notes and travelers cheques up to an aggregate value of 2,000 US Dollars or its equivalent in other currencies.
This validates Statement 1. If the unspent foreign cash exceeds this 2,000 US Dollars threshold, the excess amount legally must be surrendered to an Authorised Dealer bank within 180 days of the traveler's return to India, making Statement 2 accurate.
Historically and currently, the central bank completely exempts foreign coins from these retention limits.
A resident individual is permitted to hold an unlimited amount of foreign coins indefinitely without any requirement to surrender them, making Statement 3 fundamentally false.