Capital Account Convertibility:
To stay “future-ready” for India’s fast-growing economy, the Reserve Bank of India (RBI) has set aspirational goals: capital account liberalization, internationalization of the Indian rupee (INR), universalizing digital payments, and globalizing India’s financial sector over a multi-year timeframe.
Capital Account Convertibility:
- Balance of Payments Account: It is a statement of all transactions between a country and the outside world. It consists of two accounts:
- Current Account: Deals with the import and export of goods and services.
- Capital Account: Involves cross-border movement of capital via investments and loans.
- Current Account Convertibility: Freedom to convert rupees to other currencies for payments without restrictions.
Capital Account Convertibility: - Freedom to conduct investment transactions without constraints.
- No limits on converting rupees to foreign currency for asset acquisition.
- No limits on NRIs bringing in foreign currency to acquire assets in India.
