RBI permits residents to make remittances to IFSCs under LRS

By: |
February 16, 2021 9:11 PM

The decision of the RBI is aimed at deepening the financial markets in the IFSCs and providing an opportunity to resident individuals to diversify their portfolios.

RBIRBI. Representative image

The Reserve Bank on Tuesday permitted resident individuals to make remittances under the Liberalised Remittance Scheme (LRS) to International Financial Services Centres (IFSCs) in the country.

The decision of the RBI is aimed at deepening the financial markets in the IFSCs and providing an opportunity to resident individuals to diversify their portfolios.

The RBI, in a notification, said it has reviewed the extant guidelines on LRS and decided to permit resident individuals to make remittances under LRS to IFSCs set up in India under the Special Economic Zone Act, 2005.

“The remittance shall be made only for making investments in IFSCs in securities, other than those issued by entities/companies resident (outside IFSC) in India,” the central bank said.

Further, resident individuals may also open a non-interest bearing Foreign Currency Account (FCA) in IFSCs, for making the above permissible investments under LRS.

“Any funds lying idle in the account for a period upto 15 days from the date of its receipt into the account shall be immediately repatriated to domestic INR account of the investor in India,” RBI said.

However, resident individuals cannot settle any domestic transactions with other residents through these FCAs held in IFSCs.

The RBI further said that banks, while allowing the remittances, should ensure compliance with all other terms and conditions, including reporting requirements prescribed under the scheme.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1PMC Plan: BharatPe and CFS will collectively infuse between Rs 500-3,000 crore in SFB
2Centrum-Bharatpe JV to pump Rs 1,800 cr into PMC on merger
3Bank of Maharashtra tops PSU bank chart in MSME loan growth in FY21