RBI expands scope of remittances to International Financial Services Centres
RBI, through its notification RBI/2024-25/49 dated 10th July 2024, has expanded the scope of remittances to International Financial Services Centres under the Liberalised Remittance Scheme.
Presently , the remittances under LRS to International Financial Services Centres (IFSCs) are limited to
1) investments in securities within IFSCs and
2) payment of education fees to foreign universities or institutions in IFSCs, for pursuing specific courses notified by CG in this behalf.
As per the new notification, Authorised Persons may facilitate remittances to IFSCs for
i. Availing financial services or financial products within IFSCs (subject to provisions of International Financial Services Centres Authority Act, 2019
ii. All types of current or capital account transactions, in any foreign jurisdiction other than IFSCs but it should be through Foreign Currency Account held in IFSCs.
To explain with an example:
Availing financial products : With this, residents will now have the opportunity to open a FDs/ make investments/ raise loans (which are all financial product) in US dollars at banks located in GIFT IFSC.
transactions in jurisdictions other than IFSC but through FCA in IFSC:
With this, residents will be able to invest overseas provided it is done through FCA account with the IFSCs, as long as it does not exceed LR scheme upper ceiling of $250,000 per year.