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As against the liberal provisions for current account transactions, the capital account
transactions are still restricted.  Section 6 provided that Reserve Bank may, in consultation with the Central Government, specify the classes of and the limits for capital account transactions which are permissible.  Reserve Bank has been empowered to frame regulations in respect of:
Capital Account Transactions

1 issue or transfer of any foreign security by a resident;

2 issue or transfer of any security by a non-resident;

3 any lending or borrowing in foreign exchange;

4 any lending or borrowing in rupees between a non-resident and resident;

5 deposits between non-residents and residents;

6 export, import or holding of currency notes or currency;

7 transfer of immovable property outside India, other than a lease not exceeding 5 years by a non-resident.

Reserve Bank has issued regulations specifying the capital transactions permitted.  The transactions permitted generally fall under the categories of non-resident deposits and investments.


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