The Reserve Bank of India vide its notification dated 16th February 2021 has reviewed the guidelines on Liberalised Remittance Scheme and has decided to permit resident individuals to make remittances under LRS to IFSCs set up in India based on 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 and the Resident Individuals may also open a non interest bearing Foreign Currency Account (FCA) in IFSCs, for making the above permissible investments under LRS.
Further, the Resident Individuals shall not settle any domestic transactions with other residents through these FCAs held in IFSC.
The AD Category – I banks, while allowing such remittances, shall ensure compliance with all other terms and conditions, including reporting requirements prescribed under the Scheme. It may be noted that any person resident in India (outside IFSC) entering into any transaction with a person/entity in IFSC shall only be governed by regulations/directions and rules issued/notified by the Reserve Bank of India and the Government of India respectively under Foreign Exchange Management Act (FEMA), 1999.
