Reserve Bank of India has issued a notification regarding Remittances to International Financial Services Centres (IFSCs) in India under the Liberalised Remittance Scheme (LRS).
It states, with a view to deepen the financial markets in IFSCs and provide an opportunity to resident individuals to diversify their portfolio, it has been decided to permit resident individuals to make remittances under LRS to IFSCs set up in India under the Special Economic Zone Act, 2005.
Accordingly, Authorised Dealer (AD) Category – I bank may allow resident individuals to make remittances under LRS to IFSCs in India, subject to the following conditions:
- 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.
- 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 up to 15 days from the date of its receipt into the account shall be immediately repatriated to domestic INR account of the investor in India.
- Resident Individuals shall not settle any domestic transactions with other residents through these FCAs held in IFSC.
It further states that while allowing such remittances, bank shall ensure compliance with all other terms and conditions, including reporting requirements prescribed under the Scheme.