The Reserve Bank of India (RBI) has published a circular in relation to remittances to International Financial Services Centres (IFSCs) in India under the Liberalised Remittance Scheme (LRS) (RBI Circular). Pursuant to the RBI Circular, the RBI has decided to review and revise the permissible purposes for the remittances made under LRS to IFSCs in India.

Prior to the RBI Circular, remittances could be made under LRS to IFSCs only for: (i) making investments in IFSCs in securities except those issued by entities / companies resident in India (outside IFSC); and (ii) payment of fees for education to foreign universities or foreign institutions in IFSCs for pursuing courses mentioned in the gazette notification no. SO 2374(E) dated May 23, 2022, issued by the Central Government. For these permissible purposes, resident individuals were permitted to open Foreign Currency Account (FCA) in IFSCs in India.

Now, pursuant to the RBI Circular, the regulator has decided that Authorised Persons may facilitate remittances for all permissible purposes under LRS to IFSCs for:

  • Availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019 within IFSCs; and
  • All current or capital account transactions, in any other foreign jurisdiction (other than IFSCs) through an FCA held in IFSCs.

For these permissible purposes, resident individuals can open FCA in IFSCs.

For more details, kindly refer to the RBI Circular available by clicking on this link.

Authors & Contributors

Partner(s):

Vaibhav Kakkar

Snigdhaneel Satpathy

Sahil Arora

 

 

Associate(s):

Keshav Pareek

Ishaan Gupta