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Card use subject to forex laws, says RBI

India's central bank reiterated on Tuesday that credit, automated teller machine and debit cards were subject to the Foreign Exchange Management Act, 1999, which governs how Indians can use foreign exchange.

The Reserve Bank of India clarified in a statement that international credit cards can be used to shop overseas through the Internet only for products allowed by the country's export-import policy.

They cannot be used to buy prohibited items such as lottery tickets and for paying for call-back services.

It reiterated that there was no separate foreign exchange ceiling for international credit card spending through the Internet.

The central bank said the different types of cards were only different modes of payments, and therefore subject to the same set of rules applicable to cash or cheque payments.

It said debit and ATM cards can be used for any purpose for which foreign exchange can be purchased from authorised dealers.

These dealers can also accept payment by debit or credit cards for exports made out of India, it said.

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