Brief Overview:
The RBI and IFSCA vide their circulars on Remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS) dated 10th July 2024 and 11th July 2024, respectively (“Circulars”) have allowed remittances for all permissible purposes under LRS to IFSCs.
Technical Details:
Pursuant to the Circulars, authorized persons may facilitate remittances for all permissible purposes under LRS to IFSCs for:
1) Availing financial services/products as per the IFSCA Act, 2019 within IFSCs; and
2) Current or capital account transactions outside IFSCs via Foreign Currency Account (“FCA”) held in IFSCs.
Resident individuals can open FCAs in IFSCs for these purposes.
Key Takeaways:
The new guidelines offer enhanced flexibility for individuals intending to engage in financial activities through IFSCs. However, this broader scope could present challenges in comprehending and adhering to the specific regulations of IFSCs, particularly for those who are not familiar with these specialized rules and requirements.
For further details, please see:
Reserve Bank of India – Notifications (rbi.org.in)
International Financial Services Centres Authority (ifsca.gov.in)
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