Residents can open foreign currency a/cs at GIFT City under LRS
July 11, 2024
Synopsis
Resident Indians can now open foreign currency accounts (FCAs) at Gift City under the liberalized remittances scheme (LRS) for a wider range of purposes. This includes sending gifts to friends abroad, buying property overseas, purchasing insurance, making fixed deposits, paying for education loans, and funding international travel. The Reserve Bank of India (RBI) has expanded the LRS rules at International Financial Services Centres (IFSCs) like Gift City, aligning them with global financial centers.
Resident Indians can open foreign currency accounts (FCA) at Gift City under the liberalized remittances scheme (LRS) even for sending gifts to friends abroad, buy property abroad, buy insurance, make fixed deposits, education loan payments, and also fund for overseas travel.
The Reserve Bank of India has further liberalized rules for opening an foreign currency account by a resident Indian at the International Financial Services Centres (IFSCs) under the LRS.
“ 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" said Tapan Ray, MD and Group CEO, GIFT City. " 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."
"The RBI has expanded the LRS for GIFT City IFSC, allowing resident individuals to use funds for broader financial services/products from IFSC. Now, insurance and fixed deposits in foreign currency are permitted, benefiting IFSC banks and life insurance companies in GIFT IFSC while providing more international investment opportunities for Indian residents.".. Jaimin Patel, partner, EY.
In a notifcation posted on its website, RBI has said that " it has been decided that Authorised Persons may facilitate remittances for all permissible purposes under LRS to IFSCs for All current or capital account transactions, in any other foreign jurisdiction (other than IFSCs) through an FCA held in IFSCs Availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019 within IFSCs".
Permissible purposed under LRS includes money spent overseas on acquisition of immovable property abroad, overseas portfolio investment, private visits abroad, gifts/donations, maintenance of relatives abroad, overseas education and medical treatment. Prior to today's notification such accpunts were allowed only for investing in foreign securities at IFSCs and for payment of fees for education to foreign universities or foreign institutions in IFSCs.
[The Economic Times]
