Remittances to International Financial Services Centres (IFSCs) in India under the Liberalised Remittance Scheme (LRS)

Last updated: 17 February 2021

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The Reserve Bank of India has updated the Liberalised Remittance Scheme (LRS) to allow resident individuals to make remittances to International Financial Services Centres (IFSCs) in India. This move aims to deepen financial markets and offer portfolio diversification opportunities. These remittances can be used for investments in IFSC securities, excluding those from Indian resident entities outside the IFSC. Additionally, individuals can open a non-interest-bearing Foreign Currency Account (FCA) in IFSCs for these investments, with specific rules on fund repatriation.

Reserve Bank of India Mumbai 400 001 February 16, 2021 RBI/2020-21/99 A.P. (DIR Series) Circular No. 11 To All Category-I Authorised Dealer Banks Madam / Sir Remittances to International Financial Services Centres (IFSCs) in India under the Liberalised Remittance Scheme (LRS)

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FAQ :

The Liberalised Remittance Scheme (LRS) is a facility that allows resident individuals to send money abroad for permitted current and capital account transactions.

Yes, resident individuals can now make remittances under LRS to International Financial Services Centres (IFSCs) set up in India.

Remittances can be used for making investments in IFSCs in securities, provided these are not issued by entities or companies resident in India (outside the IFSC).

Yes, resident individuals can open a non-interest-bearing Foreign Currency Account (FCA) in IFSCs for making permissible investments under LRS.

Funds lying idle in the FCA for more than 15 days from the date of receipt must be immediately repatriated to the investor's domestic INR account in India. Also, domestic transactions with other residents cannot be settled through these FCAs.

AD Category-I banks should bring the contents of this circular to the notice of their constituents and customers.

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Notification No : A.P. (DIR Series) Circular No. 11
Published in Community & General
Source : https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=12029&Mode=0

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