Liberalised Remittance Scheme : RBI
The Reserve Bank of India (RBI) in a notification issued recently allowed resident individuals to open Foreign Currency Accounts (FCAs) in International Financial Services Centres (IFSCs) at GIFT City in Gujarat under the Liberalised Remittance Scheme (LRS).
- Liberalised Remittance Scheme (LRS) is a foreign exchange policy initiative introduced by the RBI in 2004.
- It is intended to simplify and streamline the process of remitting funds outside India.
- This scheme helped Indians overcome international fund transfer restrictions as set by the FEMA (Foreign Exchange Management Act), 1999.
- Under LRS, all resident individuals, including minors, are allowed to freely remit up to USD 250,000 per financial year (April–March).
- Only individual Indian residents are permitted to remit funds under LRS. Corporates, partnership firms, HUFs, trusts, etc. are excluded from its ambit.
- This can be for any permissible current or capital account transaction or a combination of both.
- The remittances can be made in any freely convertible foreign currency.
