RBI Extends LRS Guidelines to Include Investments by Resident Individuals in IFSCs

The Reserve Bank of India (‘RBI’) has, by its Circular dated February 16, 2021, permitted resident individuals to make remittances under the liberalised remittance scheme (‘LRS’) to International Financial Services Centres (‘IFSCs’) set up under the Special Economic Zone Act, 2005, subject to: (i) the remittance being made only for investments in securities issued by entities resident in IFSCs; and (ii) a non-interest bearing foreign currency account (‘FCA’) being opened in IFSCs for making investments under LRS. Funds lying idle in the FCA for a period of 15 days must be repatriated to domestic INR account of the investor; and (iii) FCAs in IFSCs cannot be used to settle any domestic transactions with other residents.

Published In:Inter Alia - Quarterly Edition - March 2021 [ English Chinese japanese ]
Date: March 31, 2021