RBI has decided to facilitate remittances to persons authorised to avail financial services or financial products within IFSCs as per the International Financial Services Centres Authority Act, 2019.
The Reserve Bank of India (RBI) has extended the scope of remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS) which allows Indian residents to open foreign currency accounts in Gujarat International Finance Tech-City (GIFT City).
On Wednesday, the RBI decided to facilitate remittances to persons authorised to avail financial services or financial products within IFSCs as per the International Financial Services Centres Authority Act, 2019.
The apex bank also permitted all current or capital account transactions in any other foreign jurisdiction (other than IFSCs) through Foreign Currency Account (FCA) maintained in IFSCs.
For these permissible purposes, resident individuals can open Foreign Currency Account (FCA) in IFSCs, RBI said in a release.
Currently, remittances can be made under IFSCs under LRS for investment in securities issued by institutions/companies resident in India (outside IFSCs) and other than payment of fees for education to foreign universities or foreign institutions in IFSCs. Courses
The central bank’s latest move will allow resident Indians to open fixed deposits in foreign currencies like dollars in bank accounts in GIFT City. This is likely to provide greater flexibility to Indian residents to manage their foreign exchange transactions and facilitate seamless remittances.
“This crucial step aligns GIFT IFSC with other global financial centres, allowing resident investors to leverage our platform for a wide range of overseas investments and spending. By clarifying the use of LRS for investments and enabling transactions such as insurance and education loan payments in foreign currencies, RBI has significantly enhanced the attractiveness and usability of GIFT City IFSC,” said Tapan Ray, MD and Group CEO, GIFT City.
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