RBI News
The Reserve Bank of India (RBI) has broadened the scope of remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS), allowing Indian residents to open foreign currency accounts in GIFT City.
On Wednesday, the RBI announced that authorised persons can now facilitate remittances for availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019, within IFSCs.
The apex bank has also permitted all current or capital account transactions in any other foreign jurisdiction (other than IFSCs) through a Foreign Currency Account (FCA) held in IFSCs. Resident individuals can open an FCA in IFSCs for these permissible purposes, the RBI stated in a release.
Currently, remittances under LRS to IFSCs can be made only for investments in securities in IFSCs, except those issued by entities/companies resident in India (outside IFSC), and for payment of fees for education to foreign universities or institutions in IFSCs for certain courses.
The latest move by the central bank will allow resident Indians to open fixed deposits in foreign currency, such as dollars, in a bank account in GIFT City.
“This decisive move aligns GIFT IFSC with other global financial centers, allowing resident investors to leverage our platform for a wider range of overseas investments and expenditures. By clarifying the use of LRS for investments and enabling transactions like insurance and education loan payments in foreign currency, the RBI has significantly enhanced the attractiveness and utility of GIFT IFSC,” said Tapan Ray, MD and Group CEO, GIFT City.
