MANU/APDR/0003/2021

Ministry : Reserve Bank of India

Department/Board : Financial Markets Regulation Department

Circular No. : A. P. (DIR Series) Circular No. 11
                   RBI/2020-2021/99

Date : 16.02.2021

To

All Category-I Authorised Dealer Banks

Madam/Sir

Remittances to International Financial Services Centres in India under the Liberalised Remittance Scheme

Please refer to the Statement on Development and Regulatory Polices announced as part of the Bi-monthly Monetary Policy Statement dated February 05, 2021 on the above subject.

2. With a view to deepen the financial markets in International Financial Services Centres (IFSCs) and provide an opportunity to resident individuals to diversify their portfolio, the extant guidelines on Liberalised Remittance Scheme (LRS) have been reviewed and it has been decided to permit resident individuals to make remittances under LRS to IFSCs set up in India under the Special Economic Zone Act, 2005, as amended from time to time. Accordingly, AD Category - I banks may allow resident individuals to make remittances under LRS to IFSCs in India, subject to 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.

Resident Individuals may also open a non interest bearing Foreign Currency Account (FCA) in IFSCs, for making the above permissible investments under LRS. Any funds lying idle in the account for a period upto 15 days from the date of its receipt into the account shall be immediately repatriated to domestic INR account of the investor in India.

Resident Individuals shall not settle any domestic transactions with other residents through these FCAs held in IFSC.